Charlie Munger: Analyzing the Financial Crisis 2008-2009 | CNBC's Squawk Box 2019【C:C.M 312】
[Transcript]
BECKY QUICK: Do you think we saw a generational low after 2008, beginning of 2009?
CHARLIE MUNGER: Generational? Maybe. Yeah, I don’t think the market is going to be cheaper than it was then. Yes, it was low. There were huge opportunities then.
BECKY QUICK: What about just back around December, Christmas Eve? Prices were down 20% and further for a lot of stocks.
CHARLIE MUNGER: Well, I don’t follow the details and don’t remember the exact days that are — I know that when The Daily Journal bought those bank stocks, it was basically the low tick. That was an accident. I deserve no credit for that.
BECKY QUICK: Well, you deserve some credit.
CHARLIE MUNGER: No. Well — but the exact perfect timing was an accident.
BECKY QUICK: What about the lack of volatility that we’ve seen in the markets? That — that’s also kind of, as central banks got into the game and increased liquidity —
CHARLIE MUNGER: Well, of course it’s — with all this massive central bank interference, I think that was necessary to do. I admire the politicians who did it and the technocrats, including the Federal Reserve people. And I think it was absolutely required, and that the danger they were avoiding was worth some of the troubles they caused. But it was very peculiar.
And it did have the accidental effect of bailing out the rich in order to help the poor. And nobody was doing that because they love the rich. They just didn’t have any other tool in the kit, and they had to do something.
BECKY QUICK: So the inequality that came from that —
CHARLIE MUNGER: It wasn’t malevolent. And it was an accident. And it probably won’t happen again. And it’s not a permanent conspiracy against the poor. It was an accident that we had the huge recession caused partly by massive stupidity in finance and venality.
And then when we ran out of tools and had to do something really peculiar that we’d never done before, that was the wisest thing to do, given the amount of trouble we were in. You’ve got to remember that if the trouble has been allowed to run, we might have had a re-visitation of the kind of troubles that brought Hitler into power.
So we were facing real difficulties. And both parties and our technocrats got together for the last time, I think, and worked us out of it. It was a very admirable thing, and that you can all be proud. I’ve been proud of nothing in politics since.
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