(The following story by John D. Boyd appeared on The Journal of Commerce website on September 16, 2009.)
WASHINGTON, D.C. — Famed U.S. investor Warren Buffett thinks the economy has “plateaued” along a bottom after a sharp decline, with little sign of recovery.
“We have not bounced,” Buffett said in a CNBC television interview, “but we’ve quit going down.”
Buffett’s holdings, mainly through his Berkshire Hathaway investment firm, include insurance companies such as Geico, a large stake in BNSF Railway plus positions in some other railroads, and consumer foods giant Kraft.
He said he closely watches activity reports from the businesses he invests in plus weekly rail and truck freight traffic indicators.
Despite the lack of solid recovery, “we’re on the mend,” Buffett said. In terms of fundamentals, he said the U.S. economy is “immeasurably better” than a year ago.
“We’re through the worst of it in residential real estate in all probability,” he said, and “some of the toxic assets have been flushed through” that had threatened the stability of the global financial system.
Some economists and business executives fear the United States could suffer a double-dip recession if consumer demand remains too weak once some near-term stimulus wears off.
Buffett, though, said “I think the odds are very much against getting significantly worse” unless there is some strong external shock to the economy. “We’re past the critical point,” he said.