2003-2004: that was the time of the below text I had wrote:
So, what did Buffett say about stocks a year ago? Here's an excerpt from his letter to shareholders, as was quoted on Fortune.com: "Despite three years of falling prices...we still find very few [stocks] that even mildly interest us. That dismal fact is testimony to the insanity of valuations reached during The Great Bubble. Unfortunately, the hangover may prove to be proportional to the binge."
Not very encouraging he was then. What about now?
Buffett went on to highlight even bigger dangers that could wipe out the whole financial system.
He called commonly-used derivatives
complains that they
"generate reported earnings that are often wildly overstated"...
"derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."
August - November 2008:
And finally we saw that happened - he was right.
If I would comment alongside of Buffett, that was a little sense at that time -2003-2004. So, I did kept silence not only because that was a good chance to wait and to see, but! My point was and is that those forecasts and models financial analysts have been using have a little ground if any even. This passage is based only on the facts, financial tools analysis and comparisons used in conventional quantitative finances. As they always referring to a physics, as the highest ruling God for the finance speculation improvements, that was and is the "theological" physics we might say now.
We mean by this - the very traditional orthodox specifics of physics, some of them (at the very bottom) are wrong and of some of those physicists themselves almost forgot already!
What do you expect after this - when those financial "outlets" didn't understand and believe and use those red flags, given by overheated power computers in their data crunching facilities. They were right - for what reason they needed to seek clues when the money flood got from all over the world?
The new mechanisms, the new tools, beyond derivatives and such second type of virtual money these days used, will be suggested soon. The new loop of money "squeezing" from markets outgunned by clever twisted ideas, those created by shear imaginations - not by realities of money movements, will be seen on horizon just after few Trillion dollars and euros be consumed by the same institutions who did this crisis.
The real contemporary monetary world peculiarities, laws, and models are to be created based on realities of global financial and goods transactions facts, and data fields. This is the Heterogeneous Finances world, and it is standing not on the Homogeneous physics based "laws". That will take some time to apprehend for.