Ordinarily, the arrival of Warren Buffett�s annual report to Berkshire Hathaway shareholders is one of the most invigorating highlights of my year. Buffett is not just a great investor; he is a fine prose artist and one of the leading philosophers of capitalism. Insights explode like firecrackers in the pages of his annual letter to shareholders, and with the advent of the Internet, we can now all benefit from the wisdom once shared with a small circle of early adopters. These letters are now scrutinized as closely and passionately as the Septuagint.
In 2009, the sparkle is still there. Perhaps Buffett is merely stating the obvious when he explains that the mortgage business should never have gotten out of the habit of demanding down payments from buyers, in order to encourage them not to walk away from deals in the event of a sudden downturn in housing prices. But if it�s obvious, how did things ever go so wrong in the housing markets? And why do the New New Dealers continue to deny that government-facilitated overgenerous lending � with the aim of dragooning millions of marginal earners into some of America�s most expensive homes � was what lit the fuse?
