The nudist beach on Wall Street

When you’re the richest man in the world, you can generally say what you think. Thus Warren Buffett reflected reality back in March, when he commented that ‘by any commonsense definition, the US is in recession’. Yesterday, he probably ruffled a few more feathers when he told CNBC that he thought the US economy was still in recession, and ‘could be worse’ at the end of the year.

He also remarked that a ‘financial crisis reveals which players have been swimming naked, because the tide goes out’. And, he added, ‘we (have) found out that Wall Street has been kind of a nudist beach’. As a result, he expects both the US mortgage giants, Fannie Mae and Freddie Mac, to require ‘federal government help’ to survive. He also expects more US banks to collapse as a result of ‘failures where the bankers were dumb in what they did’.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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One Response to The nudist beach on Wall Street

  1. subbanna balepur 31 August, 2008 at 11:01 am #

    It is time that someone in the financial industry took a holistic view and decided to take on rougues(trader)s /and incompetant and put them in their places . Warren Buffet certainly has credentials and stature for that. Many recent Chemical industry articles on risk assessment and loss control quote (hold responsible)failures in the financial industry for poor risk assessments/lack of focus on specific technical aspects of sigle failure. Come to think of it ENRON were the smartest guys in the room @ one time. It takes time for reality to check in !! Thank god process industry focus is better on risk and loss control.

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