via AlterNet:
Posted by LesLeopold at 7:52 am
May 8, 2010
Is Warren Buffett Main Street’s Benedict Arnold? The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal. (Berkshire Hathaway annual report, 2002)
Those were some wise words from Warren Buffett, the Will Rogers of the financial world. He used to say such things at his stockholder meetings, where tens of thousands come to savor his homilies and celebrate their own good fortune–a kind of Woodstock for people who dig money more than sex, drugs and rock n roll. His fans love to party with the iconic multi-billionaire from Omaha with the sparkle in his eyes. The guy makes people feel proud to be Americans and capitalists, big and small.
Buffett’s reputation is as a straight shooter. For years he had only contempt for fantasy finance securities that contain nothing but air and risk. He was among the first to see that if we let toxic securities like synthetic collateralized debt obligations run wild, we’d soon be engulfed in a financial crisis. (For an easy to read account of these “financial weapons of mass destruction” please see The Looting of America.)
But times have changed. Today, Buffett is all about the bottom line. He’s taken to defending the biggest shysters in the country–and argues that his own questionable derivatives should be shielded from government regulators.
If this were just about Warren Buffett, it wouldn’t be worth giving him more ink. But his betrayal comes at a time when Congress is finally realizing that most of us are truly upset with Wall Street’s looting of America. While big bank profits and bonuses are reaching record highs, April’s unemployment statistics show that there are over 29 million of us without work or forced into part-time jobs. The BLS U6 jobless rate is at 17.1 percent. ..........(more)
The complete piece is at:
http://blogs.alternet.org/speakeasy/2010/05/08/is-warren-buffett-main-streets-benedict-arnold/