Click here to read the whole thing.
Stanford Law Review has a great interview with Warren Buffett's longstanding partner, Charlie Munger. Munger offers much less corn pone and more direct opinion than Buffett does.
The entire piece is very much worth reading, but I wanted to hone in on some key topics. One is the neglect of the role of what amounts to accounting fraud in this mess. Much of this is technically not fraud under the current regime but would be if the standards of 20 years ago were still in place. We now live in a world where everyone knows that the authorities simply will not take down any of the Big Four. Four is now deemed to be the minimum number of big accounting firms permissible. So we de facto have accounting firms "too big to fail", which means "too big to be asked to eat much liability, not matter how indefensible their conduct." So if they do something bad, they might have to fire a few partners and pay a moderate fine.
So effectively, we live in a world that echoes the Nixon Presidency. If the Big Four does it, it must be legal.
Thursday, May 14, 2009
Charlie Munger Being Charlie Munger
Thanks to Between The Hedges for poin6ing out this article at Naked Capitalism: