The Oracle of Omaha......

[blogger]

The Oracle of Omaha......

About two years ago, Warren Buffet warned against Derivatives by commenting that he thought...(and I'm paraphrasing here) The Derivatives market had become so complex that he didn't think people trading in it knew exactly what they were buying anymore, and there was a greater than average risk of collapse and fiscal scandal.......

Until last month, I had rarely heard of MBIA and other Bond Insurers....But as we work through the last few days of the fourth quarter, when everyone writes down their losses for 2008.....That "toxic Sludge" everyone's been talking about may be in the bond insurers court......I'm just guessing here, but a Failure at a place like MBIA would be, at best.....costly.

Hang on to your balance sheets and your FICO Scores (for whatever they are worth, BTW) Although I called it a bottom in Hood River Last week, My caveat might come to fruition......

Values wont drop, but the ability to get credit might just vaporize for a bit.....This will drag on the market here, but there sure is alot of cash sloshing about, and since it can't go overseas.....well, let's just say we are seeing alot of it around here.

But my view of the impact will be that some sectors get hit, the one's where people are exposed and have to sell an asset in a hurry, at a discount. That's tract housing, and raw land. (the kind where the curbs and gutters are in and it's been platted)

Ruff. Ruff Ruff...

Maui

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