Warren Watch: Original ‘Ukulele Hero’ drawing to be auctioned

Attention, ukulele fans.

Or Warren Buffett fans.

Ted E. Bear Hollow, a charity that helps grieving children and teens, will auction an original drawing by World-Herald editorial cartoonist Jeff Koterba, autographed by Buffett. The cartoon portrays him as “Ukulele Hero” on a video game box.

The cartoon appeared in the newspaper after news stories about Buffett teaching the ukulele to members of Girls Inc. of Omaha. He has performed with the instrument publicly and touts it as his favorite — cheap, portable and useful for courting.

The live auction will take place at the charity’s $75-per-person Comfort Food Classic at 5 p.m. Oct. 4 at the Scott Conference Center. Tickets are available at the door or by calling 502-2773.

Diners will vote on the best gourmet potato among those prepared by a corps of Omaha’s top chefs and enjoy hors d’oeuvres, desserts and wine.

Detailed account

A year ago this week, Buffett played a role in the scramble to prevent a meltdown of the nation’s financial system but declined some proposals, according to a detailed account in the New Yorker magazine.

James B. Stewart wrote that Buffett was reluctant to intervene in the financial troubles of American International Group, the giant insurance company.

AIG’s CEO, Robert Willumstad, called Buffett on Sept. 12, a Friday, at the suggestion of Christopher Flowers, a private-equity fund founder. AIG’s troubles stemmed from its London-based Financial Products division, which was one of the largest issuers of credit-default swaps.

The insurancelike swaps promise reimbursement if securities default, and rising defaults in mortgage-backed securities threatened to cost AIG billions of dollars.

“Call Warren Buffett,” Flowers told Willumstad, according to Stewart’s account. “Don’t even wait one second.”

Flowers gave Buffett’s private phone number to Willumstad.

The story continued:

“Buffett answered, and Willumstad described the liquidity crisis. Buffett asked some questions and said he needed more time. Later, he called back to say that he might be interested in some of AIG’s businesses if they were for sale, but he didn’t want to get involved with the parent company. Always reluctant to invest in companies whose operations he didn’t thoroughly understand, Buffett said that AIG was too complicated.”

Buffett also was called the next day for help with Lehman Brothers, the investment banking company that was in deep trouble because of its mortgage-backed securities. Buffett said he would consider making $5 billion in guarantees while Barclays of London went through the process of acquiring Lehman.

But Barclays decided that with only a “piecemeal guarantee” by Buffett and others, investors wouldn’t be reassured and Lehman wouldn’t survive long enough to be acquired, Stewart reported.

Barclays officials “decided that it was pointless to pursue the matter,” the story said. Only a government could assume an unlimited exposure to losses, they reasoned. Although they believed that such a guarantee wouldn’t cost U.S. taxpayers anything, no such guarantee was forthcoming.

Lehman subsequently failed, a collapse that worsened the financial crisis.

(The New Yorker account may put to rest the recent discussion that Buffett might have saved Lehman if he had found a follow-up voice mail message that a Barclays official left on his cell phone.)

The next week, Buffett announced that he would invest $5 billion in Goldman Sachs Inc., which was a key step in building up Goldman’s capital. Morgan Stanley, another banking company caught up in the situation, received $9 billion from Mitsubishi bank of Japan.

“The moves staved off what had seemed the imminent collapse of the firms,” the story said.

‘Go green’

Buffett’s Berkshire Hathaway Inc. hopes to connect with the wind energy business in the United Kingdom, the Times of London reported, saying Buffett is “keen to go green.”

Berkshire’s MidAmerican Energy Holdings division qualified to bid on contracts to install and maintain hundreds of miles of undersea cable to bring electricity into Britain’s energy grid from offshore wind generators.

The 20-year contract would cover nine offshore wind farms that are built or planned.

Other potential bidders include: National Grid; Scottish and Southern Energy; RWE, owner of Npower; Norway’s state power company Statkraft; and Dong, the Danish energy group. The auction is to raise about $1.3 billion.

NoVo

One of Buffett’s sons, Peter, and his wife, Jennifer, say their NoVo Foundation, financed with $1 billion worth of Berkshire stock, is focused on community building and the advancement of women.

“When my father gave us that money, the only thing he expected from us was that we follow our own convictions, and when you are charged with that sort of responsibility you tend to respect it,” Peter Buffett told the South China Post while in Hong Kong recently.

He gave a talk on family philanthropy at a forum organized by the Zeshan Foundation, a local charity, and performed some of his music at an evening gathering sponsored by the Asia Society.

“It’s very useful to talk to wealthy families about philanthropy and how parents can pass on their values to their children,” Buffett said. “My father did a great job with all three of us (brother Howard and sister Susan), not one of us went off the rails. Three out of three is pretty good going.”

He said the three separate charities are working well.

“It’s better than all being on one board, having disagreements, or wondering if one is getting more attention than the other,” he said. “That’s not to say there is any sibling rivalry — we all get along very well — but it was just in case there was a tendency towards that.

“My father has always encouraged us to be distinct individuals. Yet even though we are all doing our own thing (with the money), we sometimes work together anyway. There is a natural synergy between us.”

The charitable responsibility “weighed heavily on me at first,” he said. “I had been following my own path, I had my music career and then suddenly I had a billion-dollar foundation to organize.”

The couple decided that helping girls and women would do the most good, he said, and to do that he follows his father’s investment style: “Consult experts, find great people and invest in them.”

Buffett also said he loved growing up in Omaha.

“Our house was two blocks from where my mother grew up, so we had a feeling of roots. Omaha was a typical Midwestern town, small-town America. We knew all our neighbors, we felt safe and secure. It was maybe a little bit boring, but I don’t think that’s a bad thing when you’re a kid.”

Of his father, he said:

“Dad still lives in the same house we grew up in, and when I visit him I sleep in the bedroom I had as a child. He still sits in the same armchair he’s had for 40 years, drives the same car he’s had for a long time to the same office along the same route he’s been taking every day for decades.

“The money doesn’t matter to him. Really. It’s his scorecard, but he’s not emotionally involved. He was, and remains, a person to whom material things mean very little.”

So why does the senior Buffett work so hard?

“Because he genuinely enjoys what he does in just the same way I enjoy making music,” Peter Buffett said.

Contact the writer:

444-1080, steve.jordon@owh.com

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