I have deep respect for Warren Buffett. I like it when a billionaire lives in his small house in Omaha, drives a domestic sedan with a license plate ‘thrifty’, and denounces the tax havens the rich enjoy.
But he’s lost it.
Moody recently downgraded MBIA from AAA+ to AAA+ (negative outlook). Critics argue that Moody is being easy on them in an effort to not be blamed if things fall apart. The same crooks who packaged the mortgage bundles are the same crooks who perform ‘due diligence’ on municipal bonds.
A case I’m familiar with involves an entering argument of, say, the revenue from seventy building permits per year, when the actual number in 2007 was 2. The same study never considered the possibility that real estate prices, and subsequent revenues, could go…down.
Municipal bonds are headed for a fall. Buffett’s out to insure them:
http://www.nypost.com/seven/12292007/business/bond_rescue_plan_713208.htm
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