I don't want to make a habit of reciting the news but upon reading Warren Buffett's annual letter to Bershire Hathaway's shareholders today I felt obliged for its sense of reality is rather humorous.
He compared highly leveraged financial dealers seeking to avoid problems "to someone seeking to avoid venereal disease: its not just whom you sleep with, but also whom they are sleeping with. Sleeping around, can usually be useful for large derivatives dealers because it assures them government aid if trouble hits. In other words, only companies having problems that can infect the entire neighbourhood are certain to become a concern of the state. From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: modest incompetence simply won't do it; it's mind-boggling screw-ups that are required."
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