Did Buffett Kill the Wells Fargo-Wachovia Deal?

Why did the Wells Fargo deal to buy Wachovia fall through at the last minute? The WSJ reports that Wells Fargo CEO chairman Dick Kovacevich blamed perceived weaknesses in a surprising area of Wachovia's loan portfolio:

Wachovia's advisers were surprised because the portfolio in question was smaller than many of its toxic mortgage portfolios and didn't have any obvious red flags.
For the next four hours, Wachovia's team tried to ease his concerns, but Mr. Kovacevich kept repeating: "It's not my call, it's our loan people."

Jeff Matthews has a very interesting take on all this. He points out that Kovacevich, a real buck-stops-here kind of guy, is not the kind of person to blame underlings. Could it be that "our loan people" weren't his underlings at all, but rather Warren Buffett?

Buffett, of course, had just taken on $10 billion of new exposure to Goldman Sachs. He owns 9% of Wells Fargo, which means that if Wells Fargo bought Wachovia, he'd essentially be taking on 9% of Wachovia's liabilities, including its $312 billion mortgage portfolio. It's easy to see that in the wake of the Goldman deal, he might not have been particularly excited about the Wachovia deal.

And it's almost unthinkable that Kovacevich wasn't talking to Buffett, his largest and most loyal shareholder.

But there's a conflict there: it's entirely conceivable that the deal would have been good for Wells Fargo even if it didn't fit into Berkshire Hathaway's broader risk strategy. If Kovacevich is taking marching orders from Buffett, that's kinda scandalous, especially now that Goldman Sachs, another core Buffett holding, is a bank and therefore a competitor.

But Buffett has rare and special powers. Just look at BRK-B: it rose on Monday, during the worst stock-market crash in years, and then fell on Tuesday when the rest of the market was up sharply. When things get really bad, it seems, people look to Berkshire Hathaway as a safe haven. Don't they know that it's extremely leveraged (like all insurance companies), doesn't pay any dividends, and is largely invested in the stock market?