WSJ: Warren Buffett Increasingly Turning to "Financial Weapons of Mass Destruction"
Reporter Karen Richardson highlights Berkshire's sale this year of $2.5 billion worth of "insurance on stock indexes and bonds in the form of derivative contracts, which guarantee payment to the buyer in the event of a specific loss in an underlying entity of the contracts."
Richardson points out that while Buffett and Berkshire have used derivatives for many years, he's been selling more of them recently, even though he called them "financial weapons of mass destruction" in his 2002 Annual Letter to Shareholders. Richardson notes that his warnings have generally focused on buyers of derivatives borrowing too much money to make the purchases.
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