Buffett sees ‘poetic justice’

Big U.S. banks are getting what they deserve, according to master investor Warren Buffett, who pontificated in Toronto recently:

“It’s sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end”

Yet he sounds an optimistic tune about our economic future. According to Reuters:

He played down worries about a credit crunch by saying that recent interest rate cuts mean low-cost funds are readily available.

Instead, he said, the turmoil that has rocked the nation’s economy in recent months has imbued the markets with a healthy degree of caution, while the rate-cutting response from central bankers has ensured that cheap money remains available for borrowing.

“I wouldn’t quite call it a credit crunch. Funds are available,” Mr. Buffett said. “Money is available, and it’s really quite cheap because of the lowering of rates that has taken place.”

He added: “What has happened is a repricing of risk and an unavailability of what I might call ‘dumb money,’ of which there was plenty around a year ago.”

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