Another look at the fall of Warren Buffet

In Socionomics—The Fall of Warren Buffett, I looked at the municipal bond debt situation. Buffett has a municipal bond insurance operation and he's invested in a ratings agency, while at the same time saying there's a big problem and that the government will bail out the states and cities.

Over at Global Economic Analysis, Mish Shedlock has been criticizing comments by Buffett partner Charlie Munger.

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway. Here is Munger's quote:
“Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”
And here's Mish:
The one thing we desperately need is a culture change. Instead, we made too big to fail, too bigger to fail. We preserved a culture that benefits billionaires like Munger and greedy CEO's that helped cause this mess. That culture benefits no one else.

Yet Munger wants us to “suck it in and cope” and expect to be happy that he did not get wiped out.

You know what? It would have been a damn good thing if the culture died and assholes like Munger got wiped out. Munger just proved beyond a shadow of a doubt Wall Street's culture was not worth saving.
Mish received a lot of email and did a couple follow up posts. The latest is

Janet Tavakoli on the "Myth of the Amoral Debtor"; An email from a Charlie Munger student; "Business as Usual"

Here are a couple passages from reader emails to Mish:
While I knew that Buffett was a hypocrite, I never expected it from Munger who states that he lived on principles. I sold all my Berkshire shares today.
Dear Mr. Buffett:

I suppose if one lives long enough, they eventually see all their living, revered heroes let them down in some way. Some succeed in this fashion far more than others. And man let me say this, “you blew me away.”
There's more at Mish's site.

It remains to be seen what Buffett does over the course of the next few years. It is likely that, as a symbol of the bull market, he will fade from prominence as long as the social mood declines and the public turns against investing. Should he continue to take actions or make comments (in this case they weren't his, but his partner's) that draw more public ire, there's the potential for him to turn from investing hero to investing goat.

No comments:

Post a Comment