BUSINESS
03/28/2008 02:46 am ET Updated May 25, 2011

Buffett Angers Rival Insurers Over Moody's Deal

Cries of foul arose yesterday against Warren Buffett after the powerful credit-rating agency Moody's Investors Service - in which he's the largest shareholder - began pulling the rug out from under his rival insurers to force them into "egregious" deals with Buffett.

Allegations of conflicts came from insurance industry sources as the credit crisis deepened over fears that insurance guarantees trading widely on Wall Street - basically private IOUs backing trillions of dollars of bonds and junk paper debt - could become almost worthless.

Last week, the Oracle of Omaha rode to the rescue of the bond-insurance crowd, saying he'd shoulder some of the guarantees himself using his own insurance empire, but only for a very high price. He also would cherry-pick the best insurance bets for himself and leave the failed books of business behind in company shells.

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