Starting on page 17, Buffet discusses the failures of Freddie and Fannie and their oversight committee, the OFHEO. It's a fascinating read. This particular cap

Starting on page 17, Buffet discusses the failures of Freddie and Fannie and their oversight committee, the OFHEO. It's a fascinating read. This particular caption is my favorite on derivatives: "Improved “transparency” – a favorite remedy of politicians, commentators and financial regulators for averting future train wrecks – won’t cure the problems that derivatives pose. I know of no reporting mechanism that would come close to describing and measuring the risks in a huge and complex portfolio of derivatives. Auditors can’t audit these contracts, and regulators can’t regulate them. When I read the pages of “disclosure” in 10-Ks of companies that are entangled with these instruments, all I end up knowing is that I don’t know what is going on in their portfolios (and then I reach for some aspirin)." I also find it hilarious that he ends by trying to sell his shareholders auto insurance at their annual meeting next month: "GEICO will have a booth staffed by a number of its top counselors from around the country, all of them ready to supply you with auto insurance quotes. In most cases, GEICO will be able to give you a shareholder discount (usually 8%). This special offer is permitted by 44 of the 50 jurisdictions in which we operate. (One supplemental point: The discount is not additive if you qualify for another, such as that given certain groups.) Bring the details of your existing insurance and check out whether we can save you money. For at least 50% of you, I believe we can."