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Buffett says economy's troubles will continue

(Agencies)
Updated: 2008-08-22 21:03

OMAHA, Nebraska -- Billionaire investor Warren Buffett said Friday the economy continues to be in a recession, by his definition, and will continue to be for at least several more months.

Buffett said during a live appearance on CNBC that ripples of the credit crunch are continuing to cause problems in financial businesses and the economy.

Buffett said earlier this year a financial crisis reveals which players have been "swimming naked," because the tide goes out. That picture has worsened along with the crisis.

"We found out that Wall Street has been king of a nudist beach," said Buffett, who is chairman and chief executive of Berkshire Hathaway Inc.

Buffett said the businesses Berkshire owns, especially ones related to housing construction such as Shaw carpet and Acme Brick, continued to slow during the summer.

Buffett said he's confident the US will be doing better five years from now, but the economy could be worse five months from now.

Buffett says the economy is in a recession because most Americans aren't doing as well today as they used to be. The technical definition of a recession most economists use is two consecutive quarters of negative growth in the nation's gross domestic product.

Buffett and another billionaire investor, Pete Peterson, appeared at a special screening of a new documentary on the nation's debts Thursday in Omaha. The two Nebraska natives were part of a panel discussion after "I.O.USA.'s" premier that was broadcast in 358 theaters.

The film's message is that an economic disaster will befall the nation if the federal government's $53 trillion in debts continue to grow.

Buffett said he doesn't think the situation is as dire as the film portrays.

"I admire the fact they tackled the subject," Buffett said. "I don't agree with many of the conclusions in the movie."