James Newsome, chairman of the Commodities & Futures Trading Commission, sided with Alan Greenspan, chairman of the New York Federal Reserve, that Warren Buffett was wrong when he described derivatives as financial weapons of mass destruction. "I agree with Chairman Greenspan on this," said Newsome, at a breakfast meeting organized by the Futures and Options Association and the Futures Industry Association in London last week.
Newsome said Buffett was talking about too specific a financial contract to generalize about the over-the-counter market. "Also, he was frustrated he could not unwind it," added Newsome, commenting on Buffett's inability to unwind some of Gen Re Securities' exotic derivatives trades.
