Why does Buffet keep getting a free pass?

"Derivatives are financial weapons of mass destruction" - Warren Buffet

http://news.bbc.co.uk/2/hi/2817995.stm - "Tuesday, 4 March, 2003, 13:32 GMT"

Lets blame the guy who predicted the downfall of CDOs.

1. His name is Warren Buffett, not Warren Buffet.

2. "he's not exactly a passive investor."

actually, that's exactly what he is. Gen Re, which he owned, is clearly a different story. But Moody's is a public traded company in which he was a shareholder like millions of others. His investment style is classic passive investing--he does not try to take control of boards, change management, etc. He's a passive investor.

3. "Big investor in Goldman"

Buffett made his big investment in Goldman after the mortgage/real estate collapse, not before. He can hardly be blamed for the activities of the company before he made his investment.

Buffett is not a saint, but at least get your facts right before you make your critique.

Whoops.. My bad. Buffett, I guess I read the title.

hr is absolutely right. printer is off... no surprise.

Lets blame the guy who predicted the downfall of CDOs.

so he's a 20% owner of the company that was an active participant in the creation of said CDOs and greatly profited from their wholesale, negligent mis-rating of those risks. But you're right, profiting by selling gasoline to arsonists is admirable.

Wouldn't the fairer analogy be profiting from rating the octane level of gasoline sold to arsonists?

Doesn't Warren Buffett sing that Cheeseburger in Paradise song? Oh wait...

lol. well done.

"3rd: Big investor in Goldman, though I doubt he knew the specifics of their trades, so not really an issue."

Why is this a problem for you?
Buy cheap, sell rich. Don't understand that this is a negative, This is a huge positive.

"so he's a 20% owner of the company that was an active participant in the creation of said CDOs and greatly profited from their wholesale, negligent mis-rating of those risks. But you're right, profiting by selling gasoline to arsonists is admirable."

No shame in this particular deal. Don't lose sight of the fact that no crime was committed.

So you and I decide to make a bet on the value of a used car. You pick some of the cars, I pick some of the cars. Then we bet...so what...has nothing to do with the production of cars in Detroit, who loses their jobs at the factory, or whether or not we bail out GM .

The actual better question that has yet to be raised, why was ABN and the German bank making such ridiculous side bets in the first place?

Remember, the only purpose of this SEC nonsense is to solidify the Washington view that all that ails the U.S. economy is the fault of Wall Street and that idiotic Washington policies in '90's, the consumer greed and dirty mortgage brokers had nothing to do with it. God forbid we focus on things like Iraq, bankrupting of the U.S. or lack of energy policy.

Warren buffet uses and trades derivatives all the time. You are a dummy if you take that quote out of context. Here is a GIANT derivitives bet Buffett did just recentlY:

http://www.cnbc.com/id/30808188/Warren_Buffett_s_S_P_Bet_Lower_Target_Less_Time

$2Billion.

patient - the goldman thing wasn't an issue for me, hence 'so not really an issue'. Just pointing out another example where one of the parties in the thick of the housing debt debacle had ties to Buffett.

and 'no crime being committed' is an awfully low bar - we all know how difficult it is to convict when the defendant has high-priced lawyers (see: Simpson, OJ; Roethlisberger, Ben). If you don't think that Moody's and S&P's actions during the debt-funded bubble were at or near the center of things, I don't know what to say to you. Buffett was warned by insiders at Moody's about what was going on, but he chose to wash his hands of it.

Yes, I agree with you completely about the lack of inquisition on what was going on at all of the lenders during this boom - IKB and ABN included. Not to mention all the unsecured lenders to Lehman, etc. who let those balance sheets get so out of control - you can only leverage yourself 30x if someone is willing to lend you the money. These 'sophisticated investors' had a fiduciary duty that to these laymen's eyes were clearly violated, but I have yet to see anyone investigating that.

> patient - the goldman thing wasn't an issue for me, hence 'so not really an issue'.

Funny, then why is it on your list of issues? Were you just padding it because it was short and meaningless?

"Just pointing out another example where one of the parties in the thick of the housing debt debacle had ties to Buffett."

Oh, so now its an issue again.

LOL. Extremely amusing. He uses the point to make a case. Then someone points out its not valid and he says "well, I'm not really using it to make my case". Then he proceeds to use it to make his case again.

Doesn't say much for the quality of his argument.

> and 'no crime being committed' is an awfully low bar - we all know how difficult it is to convict when the
> defendant has high-priced lawyers (see: Simpson, OJ; Roethlisberger, Ben).

You are confusing commission of a crime with conviction... so your analogy falls flat. OJ DID commit a crime. Goldman probably did. Buffett did not, hell noone has even inferred he did.

Look, I never said or inferred that Buffett committed any crimes. I'm saying that companies he owned or had very substantial stakes in had roles in this whole thing, and I'm curious as to why no one has really delved into that.

Insiders at Moodys contacted him, their biggest shareholder, to say that the board was asleep at the wheel while the company was handing out ridiculous ratings on various structured securities. He ignored them.
Gen Re entered into transactions that falsely inflated the earnings of ....AIG - remember them? They maybe had a thing or two mentioned about them during this crisis...

The press acts like he is god almighty and his sh*t don't stink. well, i smell it

because no one really cares, thats why. he personally has never overleveraged his balance sheet to cost the american people billions of dollars. he has taken small town companies and made them into successes. he has invested in the good ole U S of A. he has donated millions to basically every charity across the board. if you're going to make billions, you're going to be an asshole sometimes. but just do enough good to overshadow the bad. he has clearly done enough that being a passive investor in some of the most successful american companies, that he does not catch criticism.

When folks try to slam the good guys... is part of why its easy for the BAD GUYS to get away with it.

Yeah, Buffett never asks for special favors from the US gov't - right?

http://www.bloomberg.com/apps/news?pid=20601103&sid=aSYvNjrXciGc

But, in this case, Buffett is correct in asking for this grandfathering. How bout this, new rule, all homeowners need to insure that they put 30% down on their mortgage for all existing mortgages..that sounds fun. same idea.