Buffett saysgreen shoots are hard to see
SAN FRANCISCO (MarketWatch) — Berkshire Hathaway Chairman Warren Buffett told CNBC Wednesday that he has trouble seeing so-called green shoots of economic recovery in the U.S.
Buffett said he had cataract surgery on his left eye about a month ago. He thought that might help, but he said it didn’t.
The risk of a collapse in the financial system has past, but “we haven’t got the economy moving again,” he explained.
Bernanke
When asked whether Ben Bernanke should be re-appointed as Federal Reserve Chairman, Buffett said “I don’t see how you could do better.”
Bernanke took decisive action in the midst of the financial crisis last year, he added.
“Bernanke is very much the key,” Buffett said. “The Fed came through for us.”
Stock market, inflation
Buffett also said the stock market is attractive versus other types of investments over a long-term period such as 10 years. Fixed-dollar investments will be eaten away by inflation over the long term, Buffett added.
“We could see a lot of inflation,” Buffett warned.
Regulation
Buffett said new financial regulation is needed to try to prevent institutions becoming too leveraged again, although he stressed that it will be difficult to control this.
“Through derivatives you can have enormous amount of leverage that doesn’t show,” he said.
Incentives at some financial institutions “are in the wrong place,” encouraging more leverage, Buffett added.
Apple
Buffett also said it’s right that the board of Apple Inc. has been criticized for not disclosing more information about the health of Chief Executive Steve Jobs.
“It’s a material fact whether he is facing serious surgery or not,” Buffett told CNBC. “That’s important to get out.”
Wells
The Berkshire chairman also expressed confidence in Wells Fargo , a big bank that is a large holding of the insurance-focused conglomerate.
Wells was excluded from an initial group of lenders that were allowed to repay money from the Treasury Department’s Troubled Asset Relief Program earlier in June.
Buffett said Wells will still be able to generate strong earnings, with or without TARP money. However, the bank would probably like to get out of the program, he added.
“I wish they didn’t have the warrants outstanding that came with the TARP money,” Buffett also said. “That’s a call on the future profits of the company.”
Buffett says’green shoots’ are hard to see
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