Buffett grows more pessimistic on US economy

The Oracle of Omaha, in a live interview with CNBC, strikes a much more bearish tone than he has recently.

By MSNMoney partner Jul 12, 2012 9:24AM

Ben Berkowitz, Reuters

Warren Buffett made some of his most pessimistic comments on the economy in recent memory Thursday, telling CNBC that things have slowed in the United States in the past six weeks.

Buffett, in a live interview, said Europe had also experienced a "pretty fast" slowdown in recent weeks as spending has declined.

The 81-year-old Oracle of Omaha said that even as the economy has cooled off, residential housing is starting to pick up, albeit off a low base. Watch the live interview in the video below.

Post continues below.

Buffett's Berkshire Hathaway (BRK.B) is heavily exposed to residential construction and real-estate sales, and he has said the economy will really pick up only when the housing market finally turns around.

Still, Buffett struck a much more bearish note than he has in the recent past, having said before that the U.S. economy was picking up slowly. He told CNBC he did not know precisely why things have slowed of late.

Jul 12, 2012 9:56AM
Warren has some of the most interesting and logical t6akes on the economy and my favorite the government and how to fix it. Cut their pay and their terms in congress and keep representatives moving through the government rather than keeping party systems in place. I for one will vote independent to get some GOOD Government back.
Jul 12, 2012 10:58AM
Yes, we are better off than Europe so why are we heading down the same path of Europe of higher taxes, bigger government and more government control, less individual freedom, and higher unemployment? Give us time and we will be in a bigger mess just like Europe. America should get back to what makes America great: limited government, lower taxes, more jobs and lower unemployment, and more individual liberties and more individual responsibilities.
Jul 12, 2012 10:13AM
Why are we always comparing ourselves to europe our  cars all have euro styling , we say we want to follow the european model changing from making products with real value to a service oriented economy and the metric system . remember lend lease and who was responsible primarily for rebuilding europe after wwII Lets have innovation in america again lets lead not follow lets have american companies owned by americans. What makes america great is our independence not our dependence Warren is right but for how long if we continue to follow and not lead.
Jul 12, 2012 11:20AM
What is happening in Europe is a warning for what is starting to happen hear. The federal government cannot continue to grow and be able to be supported by 50% of the people (the ones who pay taxes). 
Jul 12, 2012 1:30PM
What's the surprise?  We have outrageous debt, a debased currency, uncertian tax picture, a housing bust, increasing health care costs, high unemployment, over-regulation and a President that favors entitlement versus achievement........who can get excited by this anti-business environment?   It comes down to leadership......and "houston, we have a problem" 
Jul 12, 2012 12:11PM
I have the perfect plan. US withdrawal from NATO, stop all foreign aid, seal our borders, deport all non legal aliens, pull all troops from foreign countries, and reinstitute the draft. Term limits for all politicans. No money for campaign funds, no pay or retirement for elected officals, and no health benefits for elected officals. Give corporations the option of 100% investment in America, buy America,  and for American's. No foreign bank accounts for US citizens. If they want investments in foreign countries they can denounce their citizenship and move there. Anybody have the balls to do it. Hell no. We have sold our country to be the world's police, out sourced our technology to the cheapest labor markets for corporate greed, and what do we have left? A bag of magic beans. The US can strike from US soil with the worlds most powerful military within a matter of hours. Send Air Force first, Navy second, Marines third. I would think by the time we sent a few fighter jets armed to the teeth there would be no need for boots on the ground. Ground warfare is a thing of the past if we adhered to these policies. US Army would be for border, domestic, and emergency relief for natural disasters. Countries with econommic ties would limit their imports to US one for one in correlation to our exports to their country. No trade imbalance for either country that way.
Jul 12, 2012 12:18PM
We're better off than Europe...not for long if we continue on the path of following their mistakes.
Jul 12, 2012 12:49PM

What a waste of an interview!!!  I could only get through the first half before I felt like slitting my wrists.


This senile old fart was so vague, he never said ONE specific thing.  Never pointed to any examples of anything. 


Europe is worse off than the U.S.  Duhh!

Europe has started to look bad in the last 4 to 6 weeks???  Are you kidding me?  Does this guy even watch the news?


Housing is starting to get better?  Really?  The only reason pricing is on the rise a little in some places is the banks are holding on to all the new foreclosures instead of putting them on the market in an effort to create an artificial supply shortage.  That has caused prices to rise a little but it's like holding an ever increasing flood of water behind a dam.  It's got to be realeased at some point and when it does, the price of homes will bottom out again.


There's only two reasons you speak in generalities:


1. You're ignorant.  Not the case with Buffett.

2. You don't want others to know what you know.  That's how he made his billions.

Jul 12, 2012 12:38PM
Dan-- until they pas a law that says all oil produced in the US must be consumed in the US they will continue to export our crude to the highest bidder overseas, and then YOU get to buy it back at an inflated price from OPEC-- but hey its a free market. If EXXON wants to make a windfall and pay no tax so be it!
Jul 12, 2012 10:49AM
Is there any thing you can do about these stupid lonely hearts club getting on here,young men old bags im lonely .com or what the freak.
Jul 12, 2012 10:15AM
This is funny, "America is i better shape than Europe", a man on his death bead is in better shape than the one already in his grave.
Jul 12, 2012 9:47AM
Interesting that Buffett is buying into real estate.  Maybe that's why there is so much activity there.
Jul 12, 2012 11:08AM

As I see It, the masses are not spending because we no longer feel are employer will continue to employ us. The regular worker is doing two jobs now, and is threaten by being replaced also we are no longer being offered incentives, benefits, or pay increases.  We will do without now, downsizing just like are employers.  We have stop buying, our hope for the a retirement, & affordable health insurance, is now fizzling out, and fear is now ruling the middle class. 

Jul 12, 2012 12:03PM
I am glad that we are better off than Europe, but disagree that Europe is the right ruler to measure against.  Europe is heavily socialistic and as of late proving that model is not sustainable.  This should be a wake up call to people that want the U.S. to adopt the European model. 
Jul 12, 2012 11:49AM

if you read between the lines you understand that the debt of governments is catching up to them.   if they don't grow businesses that pays salaries and taxes then they dont have the tax revenues to redistribute as gdp and you cant take what is not being generated..(example: government spending in the US is 45% of gdp, france is 56%, they confiscate more but yet run deficits like the rest of europe except germany)


 The home values are down so local government has less taxes, incomes are down so state and federal have less taxes.  debt spending is bad spending and when it ends the economy contracts because they cant raise more. if they debt spend we pay later for the hope of growth but government spending is not productive.  its a cost to the economy not a long term plan.    its very simple.   its a basic fundamental.     add the fact that investments and saving rates are nil makes everything stop.    this contraction will continue until asset values improve and debt amounts reduce.   we have not reached bottom in a braod way.  the debt problem is a train wreck thats been going on since 2008.  in the great depression FDR wanted to pass an unused profit tax.  basically he wanted to confisdcate all of this money people have on the side lines to spend to improve gdp and reduce unemployment.  business were in the same situation. they held due to the outlook being negative.  all he would have done was canabalize his future.  thank god it got shot down.  government needs to get small, get out of the way and let those with the funds direct them to their best use when the time is right.  now is not yet.        

Jul 12, 2012 12:27PM
Dysfunctional mean spirited government that passes more and more laws but can not administer the country according to constitutional law with the laws we already have and pass more laws is one of the biggest concerns for our country.

What is required is the administration of the country by the government focused to supply abundant energy at a stable price is the core of the vibrant recovery of the nation . Energy to manufacture, produce food for our table, to provide water to areas with drought. Energy to build canals to provide water to drought areas to maintain food production. The manufacture of machinery for all of the above is what government needs to be doing with capital for these projects being integrated into this will provide copious jobs and taxes to support this infrastructural. This would anchor the economy in a sound economic cycle of prosperity.
Jul 12, 2012 2:04PM
VERY soon, millions upon millions of baby Boomers will be putting their homes on the market out of NECESSITY, not choice, as they move into assisted living or nursing homes , guaranteeing a glut of homes on the market for at least  a decade to come
Jul 12, 2012 1:45PM



Press the friggin spam button on all this BS "free dating postings". If I am going to get upset over some blockheads post, at least it should be on topic!!!

Jul 12, 2012 12:47PM

and yet we're doing the same sociliast things that turned europe into the financial slog it is

Jul 12, 2012 10:22AM
Hey Billy Goodrow, move to a communist country (there are still a few around) and your class envy will dissapear. No more rich or poor or in between.  Misery is spread equally.
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