On Kool-Aid drinking................

Mr. Bondi:   "...we're investigating the causes of the financial crisis.  And I would like to get your opinion as to whether credit rating agencies and their apparent failure to predict accurately...cause or contribute to the financial crisis?"

Mr. Buffett:   "It didn't cause it, but there were a vast number of things that contributed to it.  The basic cause, you know, embedded in psychology - partly in psychology and partly in reality in a growing and finally pervasive belief that house prices couldn't go down and everybody succumbed - virtually everybody succumbed to that.  But that's - the only way you get a bubble is when basically a very high percentage of the population buys into some originally sound premise and - it's quite interesting how that develops - originally sound premise that becomes distorted as time passes and people forget the original sound premise and start focusing solely on the price action.
      So every - the media, investors, the mortgage bankers, the American public, me, my neighbor, rating agencies, Congress - you name it - people overwhelmingly came to believe that house prices could not fall significantly.   And since it was the biggest asset class in the country and it was the easiest class to borrow against, it created probably the biggest bubble in our history.
      It will be a bubble that will be remembered along with the South Sea bubble and the tulip-bulb bubble."

-as excerpted from Warren Buffett's testimony in front of the Financial Crisis Inquiry Commission