Warren Buffett, the billionaire chairman of Berkshire Hathaway, testified in front of the Financial Crisis Inquiry Commission on Wednesday. As the largest shareholder of the rating agency the Moody's, Mr.Buffett suggested that Moody " had a wrong call", however, the mistake was inevitable. He asserted that no one foresaw the crisis and everyone made a mistake including himself. He said he would sell all his stocks if he had known the consequences.
Mr. Buffett refused to attend the testimony first until he received a subpoena saying that his attendance is necessary. It is easy to guess why he did not want to appear in the testimony. The fact is that the FCIC asked the wrong person. Neither Mr McDaniel nor Mr. Buffett know what went wrong with the rating system. The ways which rating agencies rate financial assets are not transparent, which makes people unable to evaluate the credibility of the rating agencies. Only certain people in the Moody's and Fitch know the details of the rating process. Mr McDanile surely is not in this group.
From a perspective as a foreigner, all US hearings are useless. They either ask the wrong questions or they ask the wrong people. Just like in the Toyota's case, Akio Toyoda were being asked several technical problems. How could he know the details of the mechanic problem as a executive? Obviously, the hearing would be fruitless if you ask an non-expertise.
Anyway, here are the videos from CNBC on today's hearing. Enjoy!
Part 1
Part 2
Part 3
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