Think there's no connection?
Think again, sucka!
Here's the commonality, right from the lips of Berkshire Hathaway's Buffet and Munger:
Buffett said the media failed to adequately report on the housing bubble, and singled out regulators of mortgage companies Fannie Mae and Freddie Mac for missing the danger their loans would pose if home prices fell. Munger said the firms that packaged subprime mortgages into securities “were either delusional or flim-flam artists.”
“They were going to take a lot of sewage and mix it up in a different way and said it’s not sewage,” Munger said. “The laws of nature are such that it keeps its sewage-like qualities.”
And you know what? They are right.
Here's the question: did Bear, Fannie, Freddie (et al) learn from MMSD? Or did MMSD learn from Bear, Fannie, and Freddie?
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1 comment:
And what about the rating agencies who knew the stuff was still sewage but threw a little perfume on it and called it AAA?
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