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.

Read more of this post