Warren Buffet’s Financial Crisis Warning (HBO)

When Lehman Brothers declared bankruptcy ten years ago on Friday, the question on everyone’s minds was simple: “Who’s next?”

If a pillar of Wall Street worth hundreds of billions of dollars just months before couldn’t be trusted with the public's money, then nowhere was safe. Panicked investors rushed for the door, banks refused to lend to each other, and money market funds began to collapse.

“I describe it as an economic Pearl Harbor,” Warren Buffett, the legendary investor of Berkshire Hathaway, told VICE News. “It was something we hadn’t seen before. Even the 1929 panic was nothing like this. I mean, the system stopped.“

Buffett had a front row seat to the global crisis even before the Bush Administration took up the struggle. He had been approached by Lehman’s CEO Dick Fuld for emergency capital earlier in the summer, and after it failed, he found himself courted by other teetering investment banks desperate for capital. His $5 billion investment in Goldman Sachs saved the firm, and netted him billions.

He credits the Bush administration, led by Treasury Secretary Hank Paulson, with helping to prevent a second Great Depression. “When they realized the gravity of what was happening, we were having a run on the United States, maybe a run on the world, they stepped up,” Buffett said.

He’s not convinced, however, that the financial community's takeaway from its brush with financial Armageddon will prevent future disaster. “Humans will continue to behave foolishly and sometimes en masse. And that doesn’t change. We get smarter but we don’t get wiser," Buffett said.

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[VICENews]

“Humans will continue to behave foolishly and sometimes en masse. And that doesn’t change. We get smarter, but we don’t get wiser, " Buffett said.

[GlobalPenguin]

“We get smarter, but we don’t get wiser” - buffet. I will remember that

[UltimateBargains]

In my humble opinion, the US government should have allowed the losers to lose and the winners to win. However, Wall Street had their "ace in the hole" (Secretary Paulson, the former head of Goldman Sachs) to privatize their profits and socialize their losses. Wall Street always has the best politicians that money can buy, on both sides of the political aisle.

[SlXkxmx]

They weren't laughing? They gave themselves huge bonuses while doing the same shady practices that led us to this point. That's why it's about to happen, again.

[wille]

This country is screwed no matter what. The people who need help won’t get it and the ones that deserve to fail will.

[corbinhughes]

Unfortunately no one went to jail for this crime but it's whatever

[XSpImmaLion]

"Humans will continue to behave foolishly, and sometimes en masse. That doesn't change. We get smarter, but we don't get wiser."
This here. Buffet nailed an entire host of problems we have faced and will continue to face throughout the entirety of human history. Short lived gains that have to be destroyed and rebuilt time and time again because of our relative short term memories and underappreciation of history.

[hmmm]

they had to bail out the banks but they should have broken them up afterwards

[Toubabou]

Warren Buffet had warned about the coming crisis long before it happened
However, he is also a major lender and then shareholder of Goldman Sachs who was spared the fate of Lehman and benefited from government loan
Too big too fail should be broken up, investment banking delisted and returned to partnerships where every partner can loose its shirt, not shareholders and taxpayers
We can’t privatize the profit and mutualize the losses. Too easy

[jack]

I was a Financial Advisor with UBS at the time. You could see the dominoes fall! I along with thousands was laid off several months later. If you think the people at the top are wiser, they are not!

[lottoaddict]

What bothers people the most, no serious time in the pen for the perpetrators. Lower and middle classes bore the brunt and paid the most.

[sylviasylvia]

I had been employed (graphics specialist/prepare booklets and presentations) with a contractor for Lehman Brothers, World Trade Center about 13 years ago. Those managers, directors and other account officials had really HUGE EXPENSE ACCOUNTS. Whatever they needed graphic artists, computer software specialists, cars given to the 2nd and 3rd shift workers no matter how far they lived (some actually lived in Connecticut); and the meals were also ordered by the companies executives for their work crews. Just seemed they were very overly generous and not being careful with the 'PERKS" that were handed out So, the management of funds for each department resources...I am sure had a lot to do with the overage and really generous perks that each department took advantage of. Also, many of the departmental heads lived in the states of New York, New Jersey and Connecticut and a few lived in Boston. They ALL used the car services after 8-9 pm, . So, there careless overspending continued even once the horrific 911 chaos had passed. Usually, it is the non-budget accounting that causes this type of eventual downfall. Not surprised at all.

[Techz]

More from this guy he’s the coolest grandpa billionaire

[jaym]

It now 2020, 12 yrs later and we are right back where we started.

[lingli]

Overpaid executives is another caused of this.Greedy

[billscott]

No they didn't laugh then, but they chuckled after the bailout, just like you are now Mr Buffet.

[bushidobrown]

"We get smarter but not wiser"
The ugly truth

[frankhoffman]

This is the guy whose philosophy I follow. He is a patriot. He has empathy toward poorer Americans. He believes both in wealth and in fair taxation. Unlike most wealthy, he is not consumed by greed. I've done pretty well using his principles. I hope I never come to imagining myself a higher form of life, which is a disease of the modern rich.

[Partizan-one]

Their stocks were tanking, he bought low, he knew the government would bail them out. He won large on that buy.

[bballplaya]

Wow, Vice actually got Warren Buffet to be in one of there videos.