The world's richest man told newspaper El Pais in an interview Sunday, that banks were to blame for the mortgage crisis who took too many risks in mortgage lending. He also said he believed the situation in financial markets would not deteriorate further.'I don't think the situation will get worse in financial markets. General conditions in the business world will get worse but it will only last a while,' he said, adding he had no idea when an upturn will come.
Just a day earlier in an interview published in a German magazine Der Spiegel he had predicted that the US recession will be deeper and last longer than many people think.
Now it appears as if he is saying that the economy will muddle along as it is doing presently. Buffett was also critical of derivatives trading, which is speculation. He blamed speculation for destroying the financial superstructure built around different sectors of the economy, while those sectors themselves continue to be healthy.
Interestingly he is beginning to sound like several high profile leaders before him who blamed speculators for economic upheavals in the past. Malaysian Prime Minister Mahathir Mohammad, at the height of the Asian financial crisis in the late 1990's had called currency speculation immoral and had responded aggressively by tightening state control. Hong Kong chief executive Tung Che Hwa had also vowed to defend the island's currency, and had done so successfully by using Hong Kong's large foreign currency reserves, a move which ultimately netted Hong Kong a tidy profit as well. Now is Buffett trying to say something?