Buffett Covers Butt, Denounces Derivatives as "Financial WMDs"

May 6 (EIRNS)--In an address to 27,000 people attending an annual shareholders meeting of his Berkshire Hathaway Inc. holding company in Omaha May 5, billionaire Warren Buffett went out of his way to warn that the "fool's game" of derivative and hedge-fund speculation was going to end in disaster, and called derivatives the financial equivalent of "weapons of mass destruction," according to an account in the Wall Street Journal.

Lyndon LaRouche noted that Buffett is just covering his butt, and trying to come out as the hero of the collapse--or he is contending for that position.

"'The introduction of derivatives has totally made any regulation of margin requirements a joke,' said Mr. Buffett, referring to the US government's rules limiting the amount of borrowed money an investor can apply to each trade. 'I believe we may not know where exactly the danger begins and at what point it becomes a super danger. We don't know when it will end precisely, but ... at some point some very unpleasant things will happen in markets.'" Buffett added, "There is an electronic herd of people around the world managing an amazing amount of money. I think it's a fool's game."

According to a Financial Times report on the same speech, Buffett also referred to the subprime market as "dumb lending and dumb borrowing," but added--dumbly--that he did not think the danger would spread to the rest of the economy.