Executive Producer
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Buffett concedes that "looking back," Moody's should have recognized there was a housing bubble and not given such good ratings to what turned out to be disasterous investment vehicles.
WARREN BUFFETT TO CNBC: MARKET DEMANDS 'BRAND NAME' CREDIT RATING AGENCIES
But, he says, almost everyone in the country got caught up in "the greatest bubble I ever saw." He includes himself in what he calls a mass delusion. "I was wrong on it, too."
He compared rising housing prices during the bubble as a "narcotic" that affected everyone's reasoning power "up and down the line."
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CNBC TV Warren Buffett is sworn in before testifying to the Financial Crisis Inquiry Commission in New York City on June 2, 2010 |
In contrast, Buffett says there should be a "huge downside" for the CEOs and directors of companies that need a government bailout to avoid collapse.
The chairman of the Financial Crisis Inquiry Commission, Phil Angelides, pointed out to Buffett that there were warnings from some observers and investors at the time, and he accused Moody's of not doing enough to understand the complexities of the structured products it was rating.
Buffett replied that while "the Casandras were there" during the housing bubble, most people didn't take them seriously.
Buffett's Berkshire Hathaway is Moody's largest shareholder, but Buffett says he has had virtually no contact with the company's management.
Current Berkshire stock prices:
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