Apocalypse is nigh, Buffett tells Berkshire faithful!

[Lopeover]

Apocalypse is nigh, Buffett tells Berkshire faithful
By Simon English in New York (Filed: 04/03/2003)


Warren Buffett is poised to issue his most doom-laden forecast for the state of the world economy yet, including a damning verdict on the derivatives industry he fears could cause a global financial crisis.

In the upcoming annual letter to shareholders of Berkshire Hathaway, Mr Buffett drops his usual folksy style to warn that banks do not understand the hidden risks lurking on their balance sheets.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2003/03/04/cnbuff04.xml&sSheet=/money/2003/03/04/ixcity.html/money/2003/03/04/cnbuff04.xml

[EagleTed]

I'm forced to agree with Buffett about derivitives, because frankly, I can't understand them. Best I can figure, they're leveraged calls, shorts, or puts on future prices of such mundane things as gold, oil, even interest rates. Why such folks as Citigroup, JP Morgan, and dozens of others would fool with them is beyond me. I avoid things I don't understand, which is why the only financial services company I own is MBNA Corp, which only does credit cards and other loans, things I can understand.

It probably is good advice to check your financial stocks and see how much deriviative business they do.