US is still in a recession, says Warren Buffett ............

INTERVIEW - EXCLUSIVE BY CNBC-TV18 - US is still in a recession, says Warren Buffett


B Y B ECKY Q UICK CNBC························· NEW YORK


The chief executive officer ofBerkshire Hathaway Inc., Warren Buffett, says he doesn't think the US reces- sion is over yet. He also admits in an interview that US tax poli- cy has tilted in favour of rich “guys“ like himself instead of the middle class. Edited ex- cerpts:

The National Bureau of Economic Research (NBER) said this week that the US recession officially end ed back in June of last year.



Well, they define it different- ly. But I ...think we're in a re- cession until real per capita GDP (gross domestic product) gets back to where it was be- fore. That is not the way the NBER measures it. But I will tell you that on any common-sense definition, the average Ameri- can is below where he was be- fore, or his family, in terms of real income, GDP. We're still in a recession. And we're not go- ing to be out of it for a while, but we will get out of it.


We're not going to be out of it for a while--a quarter, two quarters, a year down the road? Just from your business, what does it tell?


Our businesses are coming back...we've got 70-some busi- nesses. But most of them--the great majority--are coming back slowly... If you take our railroad business, and our rail- road business is typical of the other railroads...If you take the peak period for shipments and then you go all the way down to the bottom, we're 61% of the way back up. That's better, I think, than most businesses are in the country.

The Fed's Federal Open Market Committee also met this week and-- came out with a statement that has many looking at it saying the Fed is now poised to go ahead with quantitative easing, if the economy doesn't improve, at this point. Is that your understanding of that? And you think that's the right call?


Well, we've got three tools really in fighting a recession.
And the ones you read about are monetary policy, which is the Fed. And fiscal policy. I think the most important factor in getting out of the recession actually is just the regenerative capacity of American capital- ism. And we had many reces- sions in the history of this country when nobody even heard of fiscal policy or mone- tary policy. The country always comes back. ..And it's impor- tant to have the right monetary policy. It's important to have the right fiscal policy. But it's nowhere near as important as just the normal regenerative capacity of American capital- ism.


It sounds like you're asking for pa tience. That that's what it takes to get through this.


Well, unfortunately, I don't know how to do it...we have used up a lot of bullets. And we talk about stimulus. But the truth is, we're running a federal deficit that's 9% of GDP. That is stimulative...I mean, that is more stimulative than any poli- cy we have followed since World War II.

For businesses to be hiring, has Washington done enough at this point? Would you like to see more done? It sounds like from a stimulus perspective, you've seen enough. Maybe from the Fed's perspective, you have seen enough. Is there any- thing you would like to see dif- ferent in tax structure?

Well, I think for one reason or another, and everybody has their own explanation, senti- ment has turned very sour in the last three or four or five months. I hope we get over it pretty soon because it's not productive. We will come back regardless of how people feel about Washington. But it's not helpful to have people as un- happy as they are about what's going on in Washington. And I'm not sure exactly what's gonna get us out of that, but we'll get out of it.

My Reading :
Well, I know many must be trying to understand this news in a different ways and many will feel that USA is still not out of woods so the global market is still in danger.....
Many analyst will read it and interpret it in differnt way, or I can say will interpret it the way they likes.........
Here is what I feel......the things that my mind is taking note of is as under:
1)We're still in a recession. And we're not go- ing to be out of it for a while, but we will get out of it.

the last line, "but we will get out of it" says everything....
2)WB says that he hs some 70 business and all are coming back and that too in a great way....61% up from down!......
Now if the wrold analyst or experts , and the experts here in India says that US economy coming to normal is manupalation of figures then how WB Business is doing good?Is WB bluffing?


3)"And the ones you read about are monetary policy, which is the Fed. And fiscal policy. I think the most important factor in getting out of the recession actually is just the regenerative capacity of American capital- ism. "


Now the last line is bottomline....."Regenerative capacity of America's Capitalsim"
WB says , USA has seen many recession and they have come out of it everytime.Even when there was no fiscal policy or monetray policy even then America came out of it.When no one heard of such things America has come out of the recession and that is why he is so sure of US economy coming out of recession......
See,one( any country) cannot compare their economy with USA.It is totally a differrnt economy to deal with.Even I am not clear about the whole concept , but ....."Regenerative capacity of America's Capitalsim"........people spends and economy flourishes........that is the explaination in "NUTSHELL"........


So in the end I will say that ,my sense says that within next 6-9 months things should fall in place in USA.....