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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Incitatus who wrote (71283)	11/16/2007 5:28:49 PM
From: Gemlaoshi	Read Replies (1) \| Respond to of 116555

Could Warren Buffett (General Re) be left holding the bag on the CDOs? I seriously doubt it because BH does P&C reinsurance. From the BH 2005 annual report chairman's letter: "We lost $104 million pre-tax last year in our continuing attempt to exit Gen Re’s derivative operation. Our aggregate losses since we began this endeavor total $404 million. Originally we had 23,218 contracts outstanding. By the start of 2005 we were down to 2,890. You might expect that our losses would have been stemmed by this point, but the blood has kept flowing. Reducing our inventory to 741 contracts last year cost us the $104 million mentioned above. I dwell on our experience in derivatives each year for two reasons. One is personal and unpleasant. The hard fact is that I have cost you a lot of money by not moving immediately to close down Gen Re’s trading operation..." It was in reference to the General Re derivative situation that Buffett and Munger coined the "weapons of mass financial destruction" term.