Buffett Says ‘Pain Will Be Felt for a Long Time’ Amid Recovery

Tuesday, 12 Oct 2010 12:18 PM

 

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Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said the effects of the financial crisis and the recession will be felt “for a long time” as the economy recovers.

“The worst is behind us, but the pain will be felt for a long time from what happened,” Buffett said in previously recorded remarks shown today at a conference at Airport City outside Tel Aviv. “We’re inching forward, we’re not galloping forward.”

U.S. economic growth has slowed this year as a lack of jobs curbed consumer spending. The unemployment rate remained at 9.6 percent in September, near a 26-year high of 10.1 percent last October. Buffett, 80, said last month that he was “a huge bull” on the U.S. and reiterated that Omaha, Nebraska-based Berkshire was hiring.

The worst U.S. recession since the Great Depression ended in June 2009, the National Bureau of Economic Research said on Sept. 20. A recent slowdown raises the possibility of another slump. Economic growth decelerated to an annualized 1.7 percent rate in the second quarter from 3.7 percent in the first and 5 percent in the last three months of 2009, according to the Commerce Department.

Buffett’s Views

Buffett’s pronouncements on the economy are watched by policy makers and investors. Buffett, the world’s third-richest person, oversees more than 200,000 Berkshire employees who work for units selling insurance, building supplies and consumer goods. He was in China last month to visit carmaker BYD Co., where Berkshire has holdings valued at more than $1 billion. He’ll travel to Japan and India in the next year to seek possible investments.

Buffett built Berkshire into a $200 billion company through four decades of stock picks and takeovers. The billionaire investor, also Berkshire’s chief executive officer and biggest shareholder, bought Israeli toolmaker Iscar Metalworking Cos. in 2006 in his largest acquisition of a non-U.S. firm. Buffett plans to travel to Japan and India in the next year in search of opportunities.

Buffett told shareholders in February 2009 that “America’s best days lie ahead” even though he wrote that the economy would be “in shambles” for the remainder of the year. Berkshire cut about 20,000 jobs in 2009, and profits advanced in the second half of that year. In November, the company said, “the credit crisis has abated.”

Buffett predicted on May 2 that unemployment would decrease.


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