26 May, 2008
THE United States is already in a recession, and it will be longer and deeper than what many people expect, United States investment guru Warren Buffett said in an interview published in German magazine Der Spiegel last Saturday.
He said the US was 'already in a recession...perhaps not in the sense that economists would define it' with two consecutive quarters of negative growth.
'But the people are already feeling the effects,' said Mr Buffett, the world's richest man.
'It will be deeper and last longer than many think.'
US economic growth has slowed dramatically in recent months, and a growing number of economists believe the world's largest economy will experience a recession this year amid a housing slump and related credit crunch.
He said, however, that he would not stop investing in selected companies, adding that he remained interested in well-managed, German, family-owned companies.
'If the world were falling apart, I'd still invest in companies,' he said.
Mr Buffett also renewed his criticism of derivatives trading.
'It's not right that hundreds of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets, even though the sectors are actually in good health.'
He also complained about the lack of effective controls over these derivatives instruments. 'That's the problem. 'You can't steer it. You can't regulate it anymore. You can't get the genie back in the bottle.'
REUTERS, AGENCE FRANCE-PRESSE
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