Oct 12
Not for nothing did US billionaire Warren Buffett call them the real ‘weapons of mass destruction’
The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world’s output: it’s been called the “ticking time-bomb”.
It’s a market in which the lead protagonists - typically aggressive, highly educated, and now wealthy young men - have flourished in the derivatives boom. But it’s a market that is set to come to a crashing halt - the Great Unwind has begun. (Related articles)
Last week the beginning of the end started for many hedge funds with the combination of diving market values and worried investors pulling out their cash for safer climes.
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Tags: Banks, Ben Bernanke, Credit Crisis, credit crunch, Derivatives, Derivatives market, Economy, Fed, Federal Reserve, hedge funds, LTCM, Wall Street, Warren Buffet
Mar 14
Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen
ARROYO GRANDE, Calif. - “Charlie and I believe Berkshire should be a fortress of financial strength” wrote Warren Buffett. That was five years before the subprime-credit meltdown.
“We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” Continue reading »
Tags: Bank of International Settlements, BIS, bubble, China, credit, Derivatives, Dollar, Fed, LTCM, Meltdown, Oil, risk, subprime, Wall Street, Warren Buffett
