Econolypse Now: Buffet's Insurance Companies Seized by Regulators; Master of Float Sinks, World Financial System Follows
Tuesday, January 6, 2009 at 11:20AM 
I recently tried out the above thought experiment/scenario on the world's number one death spiral economist. He clearly had not seriously considered the worst-of-all-possible-worlds headline but he readily acknowledged Buffet's extraordinary appetite to take on catastrophic risk with his massive arsenal of cheap capital, known as float. (See Oracle of Omaha's balls-to-the-wall forward bet on S& P and other indices http://www.ft.com/cms/s/0/45446192-bbec-11dd-80e9-0000779fd18c.html) This famous economist's studied reaction was, well, stoic. I believe he was having a true Fruit of the Loom moment. Gotta watch out for those Black Swans!
So my friends (how could anyone ever expect to be elected president using that expression?) just contemplate the above hypothetical headline as you read the "Cheat, Love, Pray" article below that I have once again gone out of my way to make convenient for you by using my personal highlighter of truth. No thanks are necessary. Someone's gotta keeo an eye on of the world for you. Everyone else is out to lunch. But don't worry, I'm all over it. Get some sleep, but take good care of that mattress-- you may need it.
love, sticky ;)
p.s. started reading OoO's biography "Snowball"-- boy, was Warren a dork growing up! makes Bill Gates look like George Clooney-- the tome is 800 pages so I'll have to get back to you after he's made his first billion. How's this for weird-- he used to drive around in a hearse.
Cheat, Pray, Love
by James Surowiecki
January 12, 2009
Along with slashed payrolls, rising foreclosures, and plummeting stock prices, 2008 brought another unwelcome development: a surge in bank robberies, which were up more than fifty per cent in New York. This wasn’t shocking: we typically expect property crimes to rise in hard economic times. There is, though, one crime against property which bucks this trend: defrauding investors. On Wall Street, fraudulent schemes tend to thrive during economic booms, and to blow up when times turn tough. While bank robbers are getting busier, the Bernard Madoffs are starting to get caught.
Madoff is just the latest in a long line of fraudsters who took advantage of investor euphoria. Time and again, as asset markets have become frothier, fraud has flourished. During England’s South Sea Bubble, in 1720, a host of bogus joint-stock companies arose, including one that described its enterprise as “nitvender,” or the selling of nothing. The boom of the nineteen-twenties featured men like Arthur Montgomery, who ran a Ponzi scheme promising investors four-hundred-per-cent returns in sixty days, and the Match King, Ivar Kreuger, who sustained match monopolies all over the world with forged bonds and doctored books. More recently, the stock-market bubble of the late nineties gave rise to enormous frauds at companies like Enron and WorldCom.
Read Full Article at: http://www.newyorker.com/talk/financial/2009/01/12/090112ta_talk_surowiecki
Reader Comments (2)
can we do in red devil
can u add at end of sentence below : (see above)
I recently tried out the above thought experiment/scenario on the world's number one death spiral economist. He clearly had not seriously considered the worst-of-all-possible-worlds headline (see above)