Dear Mr. Buffett

Janet Tavakoli takes you into the world of Warren Buffett by way of the recent mortgage meltdown. In correspondence and discussion with him over 2 years, they both saw the writing on the wall, made clear by the implosion of Bear Stearns. Tavakoli, in clear and engaging prose, explains how the credit mess happened beginning with the mortgage lending Ponzi schemes funded by investment banks, the Fed bailout and its impact on the dollar. Through her narrative, we hear from Warren Buffett and learn how his enduring principles caused him to see the mess that was coming well in advance and kept him and his investors well out of the way.

Preface ix Acknowledgments xv Chapter 1: An Unanswered Invitation 1 Chapter 2: Lunch with Warren 9 Chapter 3: The Prairie Princes versus the Princes of Darkness 31 Chapter 4: The Insatiable Curiosity to Know Nothing Worth Knowing (Oscar Wilde Was Right) 41 Chapter 5: MAD Mortgages—The “Great” Against the Powerless 67 Chapter 6: Shell Games (Beware of Geeks Bearing Grifts) 97 Chapter 7: Financial Astrology—AAA Falling Stars 107 Chapter 8: Bear Market (I’d Like a Review of the Bidding) 123 Chapter 9: Dead Man’s Curve 143 Chapter 10: Bazooka Hank and Dread Reckoning (AIG, Fannie, Freddie, Lehman, Merrill, and Other Fluid Situations) 163 Chapter 11: Bond Insurance Burns Main Street 179 Chapter 12: Money, Money, Money (Warren and Washington) 191 Chapter 13: The Fogs of War, Religion, and Politics 209 Chapter 14: Finding Value 219 Notes 225 Bibliography 259 Index 267