VIDEO: Lessons From Warren Buffett: Fixing the Economy
January 8, 2009

Bloomberg’s Peter Cook in Washington and author Janet Tavakoli discuss her new book: Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (John Wiley & Sons January 2009).

Excerpted highlights:

“Wall Street perpetrated a massive fraud on the American taxpayer. Wall Street was engaged in a massive Ponzi scheme with failed mortgage lenders” and engaged in “value destroying” transactions in “financial meth labs…Most of the [CDOs] that came to market in 2007 were designed to cover up losses that investment banks should have taken on their own balance sheet.”

“We’re bailing out a lot of bad guys…These were Black Barts [the highwayman who robbed Wells Fargo stagecoaches without firing a shot] not black swans. There were no outliers…there were only outright liars.”

“Wall Street knew the rating agencies’ models were wrong and exploited the weaknesses of the rating agencies to cover their losses. Wall Street weakened the economy. “We need to go after a long list of players.”

We have to deal with this before we can fix the economy by getting sound lending and prudent finance, whereas Congress has let us down and continues to support bad lending.


Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008), and
Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (John Wiley & Sons January 2009)

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