Whatever you think of Buffet's politics, his insider analysis of our
current credit crisis is mandatory reading for anyone who wants an
informed opinion:
http://www.berkshirehathaway.com/letters/2008ltr.pdf
DRB, you'll be pleased to know that he is blunt about the risks of the
government bailout, and how it is skewing the economy. And has some
ungentle words for FM:
Putting people into homes, though a desirable goal, shouldn’t be our
country’s primary objective.
Keeping them in their homes should be the ambition.
Derivatives are dangerous. They have dramatically increased the
leverage and risks in our financial
system. They have made it almost impossible for investors to
understand and analyze our largest commercial
banks and investment banks. They allowed Fannie Mae and Freddie Mac to
engage in massive misstatements of
earnings for years. So indecipherable were Freddie and Fannie that
their federal regulator, OFHEO, whose more
than 100 employees had no job except the oversight of these two
institutions, totally missed their cooking of the
books.
I hope Obama listens to him. For all his progressivism, Buffet is a
hard-nosed businessperson who understands the value of money and the
nature of risk, something few academics do.
-- Ernie P.
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