Buffett and Munger share lessons of turmoil
Posted on 15. May, 2009 by Admin in Warren Buffett News
Via: Associated Press
Billionaires Warren Buffett and Charlie Munger said Sunday the most important lessons of the recent financial turmoil are that companies should borrow less and build a system that imposes severe disincentives for failure.
“I think the most important lesson is the world needs a whole lot less leverage,” said Buffett, who is Berkshire’s 78-year-old chief executive and chairman.We do not need insane accounting that rewards people that can’t handle the temptation,” Munger said.
But it still might be hard to get Congress to pass sensible rules for investment banks and derivatives, Munger said, because of the amount of lobbying investment banks have done.
“We’re going to have a hell of a time getting this fixed the way it should be fixed,” Munger said.
Buffett said he’s not sure how the government will handle the results of the stress tests officials are conducting on the 19 largest U.S. banks, but he doesn’t think the government should rule out the failure of most of the banks.
“These 19 banks are not too big to fail.” Buffett said.
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