“Billionaire investor Warren Buffett on Wednesday defended credit rating agencies that gave overly positive grades to mortgage-related investments before the housing bust. He said the agencies were among many who missed warnings signs of the crisis.
“They made the wrong call,” Buffett acknowledged.
But he said he counted himself among those who failed to foresee the collapse of the housing bubble. Buffett called it the “greatest bubble” he had ever seen.
“The entire American public was caught up in a belief that housing prices could not fall dramatically,” Buffett told a congressionally chartered panel investigating the financial crisis. Had he known how bad it would get, Buffett said he would have sold his company’s stake in Moody’s.”
My Comment:
Dear Warren, how shall I count the ways that I can contradict thee?
1. You knew perfectly well that a crisis was round the corner. Didn’t you say, early on, that derivatives were weapons of mass destruction? Sounds like you knew well in advance what was in store for the economy.
2. The entire American public wasn’t fooled. By 2004, there were sites all over the internet calling a bubble. Sites not written by economic experts but by average Joes. I heard talk of a bubble on the streets in 2005.
3. You’re omitting the part where Alan Greenspan, the National Association of Realtors, and dozens of other industry lobbies as well as the major media went out to the public and pumped the housing market and the flimsy loans and securities built on them to the public.
(more later)