Meaning: The quote by Richard Dooling, a novelist and lawyer, reflects the widespread confusion and complexity surrounding financial instruments such as credit default obligations and derivatives. Dooling highlights the recurring attempts by financial experts and pundits to elucidate these instruments to the general public, only to fail ignobly in doing so. The quote suggests that these financial instruments are so enigmatic and arcane that only a select few, such as Warren Buffett and the computers that created them, truly comprehend their intricacies.

The term "toxic" financial instruments refers to complex financial products that played a significant role in the 2008 financial crisis. These instruments, including credit default obligations (CDOs) and derivatives, were at the center of the crisis, as their opaqueness and interconnectedness led to widespread financial turmoil. CDOs are financial instruments that are backed by a pool of loans, and they were often comprised of subprime mortgages, which were at the heart of the crisis. Derivatives, on the other hand, are financial contracts whose value is derived from an underlying asset or group of assets. They can be used for hedging or speculative purposes and often involve sophisticated mathematical models to determine their value.

The complexity of these financial instruments lies in their intricate structures and the interplay of various factors that influence their performance. Understanding the risks and potential impacts of these instruments requires a deep comprehension of finance, economics, and mathematics. This complexity has led to a situation where even many financial professionals struggle to fully grasp the intricacies of these instruments, let alone the general public.

Warren Buffett, often referred to as the "Oracle of Omaha," is widely recognized as one of the most successful investors and astute evaluators of financial instruments. His ability to decipher complex financial products and assess their risks has earned him a reputation as a sage in the world of finance. His annual letters to shareholders of Berkshire Hathaway, his conglomerate, are widely followed for insights into his thinking and approach to investing.

The reference to computers in the quote underscores the role of technology and algorithmic trading in the creation and management of these financial instruments. In recent years, technological advancements have given rise to complex trading algorithms and quantitative models that play a pivotal role in the development and trading of derivatives and other financial products. These algorithms can rapidly analyze vast amounts of data and execute trades at speeds that far exceed human capabilities.

In conclusion, Richard Dooling's quote encapsulates the pervasive confusion and mystique surrounding financial instruments such as credit default obligations and derivatives. The complexity and opaqueness of these instruments have confounded both financial experts and the general public, leading to a widespread lack of understanding. The reference to Warren Buffett and the computers highlights the rarity of individuals who possess a deep understanding of these instruments, while also acknowledging the role of technology in their creation and management. Understanding these financial instruments requires a high level of expertise in finance, economics, and mathematics, making them inherently challenging for the layperson to comprehend.