The Fallible Mr. Buffett

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. For years, we’ve become accustomed to hearing how no one could have seen the unfolding subprime crisis… not even, according to Warren Buffett, the credit rating agencies. The very companies that paid millions to do efficient research could not foresee a problem of this magnitude? What is Buffett thinking? This is the guy that once stood up for the little guy, defending him from corporate madness. And now he’s defending credit rating agencies— some of the very companies that took us to the edge of financial ruin, all while holding stock? Advertisement The Samurai’s Secret that can Make You 2682% 700 years ago, the first true Samurai blade was born after a few grains of this metal was added. Today, that metal is indispensable to modern industry, and yet, we’re running short. Find out why the Chinese are now hoarding every ounce they can get their hands on… And how one company may have found the solution to a global crisis. Why is he now catering to the corporate elitists that helped foster the subprime meltdown? Why is he defending Goldman Sachs and its CEO Lloyd Blankfein— accused on fraud charges from the SEC and undergoing an alleged Justice Department investigation of criminal wrongdoing surrounding the structuring of ridiculous derivative contracts? And why is he fighting derivative legislation after calling derivatives “financial weapons of mass destruction,” “unattractive,” and comparing them to hell and to Hurricane Katrina? (In a note to investors, he once wrote: We are delighted that we hold the derivatives contracts that we do. To date we have significantly profited from the float they provide. We expect also to earn further investment income over the life of our contracts. ) It wreaks of hypocrisy. But what really sucks is his support of credit rating agencies, which shouldn’t be blamed because they couldn’t have seen the subprime crisis unfolding. And we all know that’s bull… How could they not have seen this coming? We did… because it was as clear as day. As I reported back in 2007: Subprime lenders could offer adjustable or teaser rates to those with bad credit. Loans like this made up 23% of the U.S. mortgage market in 2006 as compared to the 8% in 2001, according to Yahoo! News. And it’s a big problem, as one in five sub-prime mortgages…

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The Fallible Mr. Buffett

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