On universal beliefs.................

Mr. Seefer:  Okay, lets move away from derivatives now and talk about - I mean, you talked about several areas already today about your views on causes, or contributing causes to the financial crisis....

Mr. Buffett:  Well, I think the primary cause was an almost universal belief, among everybody - and I don't ascribe particular blame to any part of it - whether it's Congress, media, regulators, homeowners, mortgage bankers, Wall Street - everybody - that house prices would go up.  And you apply that to a $22 trillion asset class, that's leveraged up, in many cases.  And when that goes wrong, you're going to have all kinds of consequences.  And it's going to hit not only the people that did the unsound things, but to some extent the people that did the semi-sound, and then finally the sound things, even, if it is allowed to gather enough momentum on its own on the downside, the same kind of momentum it had on the upside.
      I think contributing to that - or causing the bubble to pop even louder, and maybe even to blow it up some, was improper incentives - systems and leverage.

-As excerpted from Warren Buffett's testimony before the Financial Crisis Inquiry Commission