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Pastimes : True Confessions -- Admit it -- you bought that stock -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (417)	5/6/2007 10:55:10 AM
From: re3	Read Replies (1) \| Respond to of 990

borrowed from RW's blogs: ("we don't know when --- unpleasant things") Buffet Warns of Dangers of Derivatives By KAREN RICHARDSON May 5, 2007 2:38 p.m. OMAHA, Neb. — Billionaire Warren Buffett repeated his warning that the growth of derivatives and excessive borrowing by traders, investors and corporations will eventually lead to significant dislocation in the financial markets. In fielding a question about derivatives, which he once referred to as “financial weapons of mass destruction,” Mr. Buffett told some 27,000 shareholders at the annual meeting Saturday of his Berkshire Hathaway Inc. holding company in Omaha that he expects derivatives and borrowing, or leverage, would inevitably end in huge losses for many financial participants. “The introduction of derivatives has totally made any regulation of margin requirements a joke,” said Mr. Buffett, referring to the U.S. government’s rules limiting the amount of borrowed money an investor can apply to each trade. “I believe we may not know where exactly the danger begins and at what point it becomes a super danger. We don’t know when it will end precisely, but…at some point some very unpleasant things will happen in markets.”