“People go crazy occasionally. We don’t get smarter when it comes to emotion. That’s what got us into this mess.”
— Warren Buffett last Thursday at the Fortune Most Powerful Women Summit. The Berkshire Hathaway CEO was explaining the root of the turmoil in the global financial markets: “Virtually every American…came to believe that home prices could do nothing but go up.” Buffett went on to note that U.S. housing is “a $20 trillion asset class,” and that giddy optimism led to “bubble pricing” and “crazy lending.”