Next weekend on the political talk shows, someone will say “nobody foresaw this crisis”. It’s the same excuse used for the morgage crisis; and just like the morgage crisis, it’s untrue.
“The practice is very different, as Warren Buffett worked out years ago. His 2002 letter to his Berkshire Hathaway shareholders made headlines by condemning derivatives as “financial weapons of mass destruction”. The passage comprised only a couple of pages of the lengthy letter but read it again today – it is the best guide to understanding how Wall Street has arrived at today’s mess.”
Wall Street crisis: Is this the death knell for derivatives? |Business |guardian.co.uk