Buffett blames banks for credit crisis
by Tom on May 27, 2008
in Uncategorized
Buffett blames banks for credit crisis: “Blame for the sub-prime crisis lies at the feet of banks who took too many risks in mortgage lending, U.S. billionaire investor Warren Buffett told newspaper El Pais in an interview published on Sunday.
‘The banks exposed themselves too much, they took on too much risk …. It’s their fault. There’s no need to blame anyone else,’ he said.”
It would be mighty presumptious of me to argue with Warren Buffett, but let me throw a couple of comments in on what he said:
1. If it’s the banks fault, then they should indeed be the ones to pay the price and that should be kept in mind as our government discusses bailout options. Someone who made a greedy and reckless financial endeavor shouldn’t be bailed out by our government.
2. Any bailout plans should determine a way to single out those who are truly are in bad straights (i.e.lost jobs etc.) compared to those who bought more house than they could afford and lied about their income, or those who speculated on real estate and got “caught.”
3. If it’s the banks fault, I think we need to look at who the accomplices to the crime are: The mortgage brokers who sold them the loans, the investment companies on Wall St. who packaged these loans, the ratings agencies who put lipstick on the pigs, the consumers who didn’t read what they were signing and didn’t work with someone they could trust…..
What do you think?
