Warren Buffett defends snake-oil sales

That’s my interpretation of this column, anyway.  The NYT‘s Andrew Ross Sorkin and all the other apologists for Goldman Sachs take a different view.

Buffett says the institutions who bought the reeking mortgage derivatives from Goldman have only themselves to blame.  They just got outsmarted.

Um, couldn’t we say the same about the lady who bought the kerosene-soaked sugar from the local grocer?

Why was Goldman selling toxic products in the first place?  If they knew they were toxic, isn’t that fraud?  Isn’t that the basis of the lawsuit?

I’d always liked Warren Buffett prior to reading this column, but now it’s hard not to conclude that he’s just like all the rest who would maintain that nobody on Wall Street bears any blame whatsoever for the financial crisis.  Buffett famously said a while back that derivatives were financial weapons of mass destruction.  Caveat emptor — said destruction can only be the buyer’s fault.

UPDATE, 7 May 2010:  Les Leopold, author of The Looting of America, says all this, and more, right here.

Obligatory song link:

Advertisements

Tags: , , , , , ,

One Response to “Warren Buffett defends snake-oil sales”

  1. Mark Eanes Says:

    I’m also a little take aback by Buffett’s comments. To date, everything I had heard from him seemed right on. I’d hate to think that underneath that plain speaking manner lies just another one-dimensional snake.

    I totally agree with his comment above regarding derivatives. They only seem to serve as a device for siphoning money from Main Street to Wall Street.

    As far as his recent opinion of Goldman Sachs goes, although despicably unethical in the extreme, they are doing what the are supposed to be doing: making as much many as they can.

    His comments suggesting that the buyers had all the info they needed to calculate the risk/reward assume that they are financial experts themselves. That is what we pay commissions for YOU to do sir.

    That is also why we have bond ratings. I think the biggest culprit was lax oversight, and I am being kind. That is why congress needs to listen to Elizabeth Warren.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: