In my earlier post today, I neglected to mention one important facet of Warren Buffett's testimony before the FCIC.
To expect Buffett to have uttered one iota of criticism of Moodys, or the current government-sanctioned ratings oligopoly, is to overlook the salient feature of Buffett's appearance before the panel.
Buffett's Berkshire Hathaway is believed to hold a substantial portion of Moodys shares, and is reputed to be the latter's largest shareholder.
That, alone, tells you all you need to know about Buffett's remarks before he even approached the microphone.
Buffett wasn't ever going to say anything which could be construed to damn the current ratings oligopoly or Moodys. That would have likely caused a drop in Moodys' stock price, which would bring substantial loss to Berkshire.
Berkshire probably can't unload too much of its Moodys position now, either. Brokers would eventually leak the source of the sales, and the price would plummet.
As a steward of his shareholders' assets, Buffett was duty-bound to be upbeat, gentle and forgiving of Moodys. And the entire sector.
Don't be fooled by Buffett's aw shucks, grandfatherly demeanor. His main objective at the FCIC appearance was to avoid tanking the price of Moodys' equity. Period.
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