Q. what is the difference between derivatives and reinsurance?:: A. not a lot…


At least that is the view of a man who knows a thing or two about both…Warren Buffett! Of course this quote is, by now, well known:

“In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

But this isn’t all that he had to say and, until someone convinces me otherwise, his view lends further (substantial) weight to my argument that (re)insurance institutions ARE “globally systemically important” with the potential to act as “superspreaders” as/when the next stage of the ongoing financial crisis unfolds.

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Mobius Says Fresh Financial Crisis Around Corner…


Tree caricature from South Sea Bubble cards

Image via Wikipedia

In case anyone was in any doubt about where we are headed…”GET REAL!”. It was never a question of “if”, merely “when”.

   Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis”

via Mobius Says Fresh Financial Crisis Around Corner Amid Volatile Derivatives – Bloomberg.

The sheer scale of the gamble of pumping so much new money directly into markets that were shown to be (at very least) morally corrupt, had failed so spectacularly yet STILL remain little changed, unpunished and unbowed, will only be apparent when it explodes in the face of the Political and Financial elites.

They will be held accountable for their actions by the rest of society upon who the economic and social burden of TBTF has, well and truly, fallen.

It is not only the financial bubble that will burst