Smart people still argue what caused the Great Depression, almost nine decades after it happened.That's the nature of deep recessions. The desire to assign blame to tragedy and the will to avoid being blamed makes these debates less scientific than we'd like.
One way to make sense of what happened is piecing together stories from those involved. The government tried this six years ago when it set up the Financial Crisis Inquiry Committee, interviewing dozens of bankers, regulators, top investors and politicians to try to figure out what happened.
One person the committee questioned was Warren Buffett. The interview took place in 2010, but the transcript wasn't public until last week.
You can readthe whole thing here.It's 103 pages and totally fascinating.
I pulled out a few of my favorite parts. The quotes are lightly edited for clarity.
On what caused the housing bubble:
On the nature of bubbles:
On debt and risk:
On the psychology of bull markets:
On companies promising results:
On the difference between investing, speculating, and gambling:
On calling the top of a market bubble:
On regulations preventing bubbles:
On high CEO compensation:
On fraud leading up to the crisis:
On the future:
The article Warren Buffett on Booms, Bubbles, and Busts originally appeared on Fool.com.
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