Charlie Munger on capital and credit in 2005...
It is weird the way that capital occurs. We have monetized
houses in this country in a way that’s never occurred before. Ask Joe how he
bought a new Cadillac [and he’ll say] from borrowing on his house. We are awash
in capital.
[Being] awash is leading to very terrible behavior by credit
cards and subprime lenders -- a very dirty business, luring people into a
disadvantageous position. It’s a new way of getting serfs, and it’s a dirty
business. We have financial institutions, including those with big names, extending
high-cost credit to the least able people. I find a lot of it revolting. Just
because it’s a free market doesn’t mean it’s honorable.
