OMAHA, Nebraska (AP) — Billionaire investor
Warren Buffett says Europe's debt concerns and the anemic U.S. home construction
business will still to hurt the economy even though many businesses are
performing well.
Buffett told CNBC on Monday that the recent
leadership changes in Italy and Greece should help, but investors are losing
confidence in the euro. And Buffett said Europe doesn't have anyone with the
authority to take the measures needed to defend the currency.
Stopping a run on a currency is difficult, he
said.
When the U.S. economy began to contract in
late 2008, the Federal Reserve and Treasury were willing to do whatever it took
to revive business. But Buffett said no one in Europe has comparable authority
to the Federal Reserve.
"They have a situation where they found a
fundamental flaw in that they can't print money," said Buffett, who is
chairman and CEO of the conglomerate Berkshire Hathaway Inc.
Buffett said during an event to raise money
for one of his favorite charities, Girls Inc., that he thinks Europe will be
fine 10 years from now, but he doesn't know whether Europe will be past its
problems in 10 months.
Buffett, however, said he doesn't think
Europe's debt problems will have a lasting effect on the U.S. economy.
He said much of the American economy is
performing well, although businesses related to residential home construction
are struggling because of the oversupply of homes.
"You have a huge segment of the U.S.
economy that's doing quite well, and you have a segment that's in a
depression," Buffett said.
Berkshire owns roughly 80 businesses, and
Buffett uses reports from those companies to gain insight into the economy. He
said several of Berkshire's biggest subsidiaries, such as Burlington Northern
Santa Fe railroad, will post record years. But Berkshire's housing-related
businesses, like Acme Brick and Shaw Carpet, are still struggling.
But Buffett said he doesn't think the U.S.
housing market needs more stimulus from either Congress or the Federal Reserve.
He said what's needed is for more households to be created and that will happen
over time.
"It doesn't solve itself as fast as
people like, but it does solve itself," Buffett said.
Buffett said he met informally with officials
from the Securities and Exchange Commission in June to answer questions related
to Berkshire's $9 billion purchase of specialty chemical maker Lubrizol earlier
this year.
That deal generated headlines in the spring
after it was revealed that former Berkshire executive David Sokol had bought
nearly 100,000 Lubrizol shares for about $100 apiece in early January, when he
knew Lubrizol's board had been discussing a possible Berkshire acquisition.
Sokol resigned after disclosing his trades to Berkshire.
Buffett said he and Berkshire officials
cooperated with the SEC, but he doesn't know what government investigators are
planning. Buffett has called Sokol's actions unethical and inexcusable.
Sokol has denied any wrongdoing in the
Lubrizol deal, and he says he left Berkshire to start his own firm.
The 81-year-old Buffett told the crowd at the
Girls Inc. fundraiser that he has no plans to retire because he can't think of
anything more fun than running Berkshire.
"I don't even know how to spell the
word," Buffett joked about retirement.
Most of the questions Buffett received at the
midday event came from girls who are members of Girls Inc.
The nonprofit provides educational and
recreational programs for girls.
Buffett said he thinks America has come a long
way in leveling the playing field for women and people of different races, but
more work needs to be done to equalize the opportunities for everyone.
"We really want to get everyone the same
starting line," Buffett said.
Buffett, the longtime Democrat, was also asked
about presidential politics.
Buffett said his vision for the country's
future is similar to the president's. But he said he wishes President Barack
Obama would receive more cooperation.
"I admire what he is doing, and I will
vote for him again," Buffett said.
Earlier Monday, Buffett said on CNBC that he
thinks former Massachusetts Gov. Mitt Romney is most likely to win the
Republican presidential primary.
AP
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