It shouldn't come as a huge surprise that Warren Buffett is defending Goldman Sachs. Buffett has been unmasking himself for the fraud that he is ever since he bought into GS last year.
http://tradersutra.blogspot.com/2009/11/warren-buffett-is-not-good-guy.html
I really don't know what to make of his latest missive about the ratings agencies.
http://online.wsj.com/article/BT-CO-20100501-701232.html?mod=WSJ_latestheadlines
Is he just doing a Vinick by talking up Moody's because he wants to dump the piece of shit company?
It looks to me that Charles Munger has a better grip on reality than Buffett.
"Berkshire Vice Chairman Charlie Munger was characteristically more blunt. "What happened," he said, "is that they drifted with the stupidity of their times."
Munger took a swipe at the academic theories and quantitative formula's the ratings firms used to make their judgements. "I've yet to hear a single apology from business academia for its huge contribution to our present difficulties," he said, to rousing applause from the audience."
The ratings agencies to me are the biggest reason why the credit markets imploded. If they had the guts to call a spade a spade, hundreds of billions of worthless structured products would have never been sold to investors.
I can't be any clear on this. I will not mince words when I say the following:
These guys at the ratings agencies should be tarred, feathered, quartered, and hung out for public ridicule. Instead of doing the proper due diligence, they just willfully neglected to do their jobs and the tax payer is on the hook for their gross incompetence.
The fact that Buffett has the gall to give the preposterous ratings industry any props should grant him a one way train ticket to hell - hopefully on Burlington Northern!
He makes these statements about derivatives and the such to sucker the masses into thinking he is on their side, but he really is looking to loot the masses for the betterment of Berkshire Hathaway. His opposition to derivatives reforms borders on the criminal. He is 100% out for himself.
http://online.wsj.com/article/SB10001424052748703441404575206252252365076.html
http://www.huffingtonpost.com/2010/04/30/ben-nelson-denies-that-bu_n_558770.html
I simply can't take this guy any longer. He is no more a charlatan than Jim Cramer and the other parrots on CNBC. The quicker he makes his exit the better. It will a great day when they put this lowlife in the ground.
PIMCO's Bill Gross in his monthly letter has more to say about the ratings agencies.
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2010/Lovin+Spoonful+-+May+2010+IO.htm
In all of the hullabaloo over Goldman Sachs, a CQ analysis of the rating services – Moody’s, Standard and Poor’s and Fitch – has escaped front-page headlines. Not that a number of observers haven’t been on to them for a few years now, including yours truly. Back in July of 2007 some of you will remember my description of their role in the subprime crisis. “Many of these good-looking girls are not high-class assets worth 100 cents on the dollar. You were wooed, Mr. Moody’s and Mr. Poor’s, by the makeup, those six-inch hooker heels and a ‘tramp stamp.’” Now, it seems, I was a little long on humor and a little short on the reality. Tramp stamp and hooker heels do not begin to describe the sordid, nonsensical role that the rating services performed in perpetrating and perpetuating the subprime craze, as well as reflecting the general deterioration of investment common sense during the past several decades. Their warnings were more than tardy when it came to the Enrons and the Worldcoms of ten years past, and most recently their blind faith in sovereign solvency has led to egregious excess in Greece and their southern neighbors. The result has been the foisting of AAA ratings on an unsuspecting (and ignorant) investment public who bought the rating service Kool-Aid that housing prices could never really go down or that countries don’t go bankrupt. Their quantitative models appeared to have a Mensa-like IQ of at least 160, but their common sense rating was closer to 60, resembling an idiot savant with a full command of the mathematics, but no idea of how to apply them.
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