Buffett dismisses double-dip fears as US economy grows
Published 15/09/2010 | 05:00
WARREN Buffett ruled out a second recession in the US and said businesses owned by his Berkshire Hathaway are growing.
"I am a huge bull on this country," Mr Buffett told the Montana Economic Development Summit. "We will not have a double-dip recession at all. I see our businesses coming back almost across the board."
Berkshire bought railway operator Burlington Northern Santa Fe for $27bn (€20bn) in February in a deal that the 80-year-old investor called a bet on the US economy.
The billionaire's outlook contrasts with the views of economists such as New York University professor Nouriel Roubini and Harvard University professor Martin Feldstein, who said the odds of a double dip may be one in three or higher.
"I've seen sentiment turn sour in the last three months or so, generally in the media," Mr Buffett said. "I don't see that in our businesses. I see we're employing more people than a month ago, two months ago."
The US economy grew at a 1.6pc annual pace in the second quarter, exceeding most economists' expectations.
US economic growth will slow to 2.5pc next year from a projected 2.7pc this year as unemployment above 9pc tempers consumer spending, according to the median forecast of economists surveyed by Bloomberg News this month.
Mr Buffett built Berkshire into a $200bn provider of insurance, energy and luxury goods and services over four decades. It cut 20,000 jobs last year as product demand declined.
Mr Buffett, who spoke via video connection to an assembly in Montana, said US banks were ready to boost lending and encouraged entrepreneurs to seek financing for their business ideas.
Berkshire is the biggest shareholder of Wells Fargo, which is the top US home lender.
"It's night and day from a year, year and a half ago," Mr Buffett said. "I know Wells Fargo, they would love to have $50bn more of loans now. Go in and talk to the banker."
Mr Buffett amassed the world's third-biggest personal fortune through decades of stock picks and takeovers.
Berkshire's stake in Wells Fargo was valued at $8.2bn at the end of June. Buffett's firm also owns $5bn of preferred stock in Goldman Sachs and $1.5bn of shares in US Bancorp.