The birth of a new company is something we should encourage in every possible way. But in doing so we should be very careful not to allow the system to become ripe with fraud as it was in 2000. If a company is viable, it will find it’s way through the process. But if not, it should die with the loss in the hands of the venture capitolist’s, not the public markets. They are the ones that took the risk, they have to take the losses. Yes?

Buffett is a CEO just like Dennis Kozlowski was at Tyco. One that buys companies and let’s them run themselves. Tyco was built by astute acquisition. But Koz did things that were so dumb that you have to wonder how he built the company in the first place. He had plenty of money to pay for his wife’s birthday party and a NY apartment. Why in the world would he try to cheat on his taxes? Really, quite foolish. Additionally, Jack Welch of GE also ran a huge conglomerate and got into some warm water, note the difference in temperature compared to Koz, when he received such a huge retirement package. Buffett is a CEO along the lines of these two others, it’s shocking that they didn’t have the good sense to follow his lead and stay well clear of foolishness and communicate open and honestly with shareholders.

It’s up to those that are lending money to make sure that they will receive payment. The problem is that everything can look fine to one bank, but in the aggregate, when loans from all sources are taken into account, a domino effect can occur that can cascade throughout the system.