Meanwhile, General Electric has already received a cash infusion of $3 billion from Warren Buffett's Berkshire Hathaway. In a deal that mirrors his earlier $5 billion purchase of Goldman-Sachs shares, Buffett has agreed to purchase $3 billion in preferred shares from General Electric. The General Electric shares, like the Goldman Sachs shares Buffett purchased, will carry a 10% dividend. Between the two purchases, then Berkshire Hathaway will see $800 million in dividend payments annually.

With the resources at his command, Buffett seems to be both making very favorable investments and at the same time performing his own private bailout of key companies. The respect that Buffett has among investors translates to strong recommendations for General Electric and Goldman- Sachs, but it remains to be seen whether he is right again. Over the last decades, he has built a fortune of tens of billions of dollars with prudent investments. These latest moves could see that total rise substantially, or they could be the undoing of years and years of hard work and success.

Even after the announcement of Buffett's General Electric purchase, the company's shares continued to fall. Heading into the weekend, General Electric's share price ended at $21.27. Part of the Buffett deal gave him the option to purchase another $3 billion in common stock at $22.50 per share. On Wednesday, when the deal was made, that would have been a $2 per share discount, now it represents a premium. Can Warren Buffett and the financial might of Berkshire Hathaway protect General Electric and help it weather the storm? Or has Buffett finally made a big blunder? The smart money is still betting alongside Warren Buffett.

Buffett also voiced his strong support for immediate passage of the government bailout package last week, indicating that even his recent investments may not have been wise if the bill didn't pass. Fortunately, the bill did pass, after members of Congress asked Buffett for his opinion on the deal. Even with the bailout funds at the treasury's disposal, Buffett was quoted by MSNBC as saying that the economy will still worsen considerably in the coming months or even the coming years. Still, he says, the US taxpayer should eventually make a profit on the funds invested in the bailout package if they are used wisely.