Warren Buffett is getting a lot of negative reviews for his appearance under subpoena yesterday (Wednesday) before the Financial Crisis Inquiry Commission.
In response to respectful, but pointed, questioning, Buffett argued that Moody's shouldn't bear all the blamefor giving favorable ratings to subprime mortgage loans that later went horribly bad, sparking the financial crisis we've all been living through these past few years.
Almost everyone, he said, believed at the time that housing prices couldn't crash. "Look at me. I was wrong on it too."
Buffett was there because his Berkshire Hathaway holding company is Moody's largest shareholder with a stake now, after months of selling, of about 13 percent, down from almost 20 percent a year ago.
After the hearing, panel Chairman Phil Angelides told Reuters, "I'm not sure he fully comprehends the range of questions raised about Moody's business practices and culture."
- Warren Buffett to Panel: Moody's Doesn't Deserve All the Blame for Bubble
- Watch Buffett's testimony
- Warren Buffett to CNBC: Market Demands 'Brand Name' Credit Rating Agencies
- Read the CNBC interview transcript
Reuter's Felix Salmon writes that it was "arguably the single worst day of Buffett's life" from a PR standpoint.
Among other pans, Salmon cites Pragmatic Capitalism's criticism of Buffett's Moody's defense: "Angelides (and just about every other rational American) thinks the ratings agencies played a central role in misleading investors. The fact is plain as day to anyone who doesn't own millions of dollars worth of their stock."