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Fri 13 Nov 2009 01:58 PM

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'Financial panic is behind us'

World's most admired investor thinks last year's financial panic is thing of the past.

'Financial panic is behind us'
WARREN BUFFETT: Worlds most admired investor thinks last years financial panic is thing of the past.

Warren Buffett, perhaps the world's most admired investor, said on Thursday the financial panic that gripped the globe last year is a thing of the past, even as the US economy's struggles persist.

"The financial panic is behind us," the world's second-richest person said at Columbia University's business school. "Our economy was sputtering, still is sputtering some."

Buffett, 79, nevertheless said there is greater opportunity for investments inside the US than outside, noting that the US economy is far larger than any other.

He appeared at Columbia with Microsoft Corp founder Bill Gates, the world's richest person and a Buffett friend and bridge partner.

Last month, preliminary government data showed the US economy expanded in the third quarter, the first three-month period of growth since the second quarter of 2008.

Nonetheless, the US unemployment rate last month reached 10.2 percent, the first double-digit reading in 26 years.

Buffett last week made a big bet on the US economy when his Berkshire Hathaway Inc agreed to pay about $26.4 billion for the 77 percent of railroad company Burlington Northern Santa Fe Corp that it did not already own.

"There will be more people in this country, 10, 20, 30 years from now," Buffett said. "They'll be moving more and more goods back and forth to each other and the most environmentally friendly and cost-efficient way of doing that is railroads."

Buffett said rail transport uses one-third less fuel and pollutes the air less than trucks, and that one train can supplant about 280 trucks.

Gates, who is also a Berkshire director, said other sectors might also boost the economy over the long term, including information technology, energy and medicine.

Separately, Buffett advised the U.S. government not to coddle companies that need bailouts to survive or preserve capital.

"More sticks are called for," he said.

Buffett gave Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner "high marks" for how they managed the financial crisis.

The billionaire has praised Bernanke in the past, while mocking Geithner's stress tests for banks.

CNBC television was a host for the Columbia event. (Reuters)

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CT 10 years ago

It sickens me deeply when I read articles like this. Maybe we are in the cirsis that we still are in because too many people always listened to people like Warren Buffett who in reality, only talk up the things that are of interest to him, and everyone takes heed. It just amazes me how people like him when talking about unemployment make it out to be not much of an issue when it comes to the crisis being all over for us. Yes Mr Buffett it really never started for people like you and it certainly isn't over by a long short for the ordinary hardworking struggling people who then had to come in and bail out the likes of you who live in your big ivory towers and tell the world ... the panic is all over... Hope that one day the joke will be on you.

RESIDENT IN KUWAIT 10 years ago

I disagree with CT. Warren is a great guy and if the poliiticians in Washington would only listen to hm we wouldn't be in this mess. Unortuanately they don't understand anything.

Simon 10 years ago

The problem here is that WB has a mass 'cult' like following. People listen when he talks because he has been a successful investor. What people do not see past is WB's self interest in talking the markets up. It is fact that the Dow Jones is massively over valued and the banks, instead of lending the stimulus money to corporates and small businesses, have in fact been ploughing money into the Equity markets and basically gambling. Certain banks in the USA have been borrowing money from the FED at close to zero interest rates, buying Treasury Bills and basic deposits and receiving 3% interest returns!!! The US financial system has become more corrupt than ever. A rising equity market is NO indication to a recovery when the money that was meant to be ploughed back into to economy has been used to gamble and falsely inflate equity prices with many Banks and big Corporates 'engineering' reported earnings. The USA is in a very bad way...and the next bubble to hit will be the BAIL OUT bubble. The stimulus is NOT working as was proven by the latest GDP report. Once the stimulus package was stripped out the USA had negative growth. So take away the stimulus and the USA can not stand on its own two feet. The knock on effects to the rest of the world is a real concern. Google the latest development of China applying to the world court to place a LIEN on US Treasury/USA assets worldwide...within its juristdiction. It happened wednesday/thursday of this week. That is a real issue. They name 3 past USA presidents in their submission, to be arrested. There is also a massive issue in the world banking system that the USA is in the middle of. I can not believe this has not made mainstream news yet... So when WB claims the worst is over...I ask myself...who is he trying to kid???

Chris Matthews 10 years ago

You are right Simon. Its a matter of time before China exercises its right and seizes US properties around the world. the US is bankrupt, the economy is artificially being shown to be pumped up and there is NO recovery in sight. The day the stimulus is withdrawn, the hot air balloon that is the US will collapse. And to keep the stimulus they need to borrow again from China. Move over US - you are now history. This is the lien story..... The Chinese parties were signing papers at the World Court on 11th November 2009, following preparatory activity on 10th November, to execute their LIEN on the US Treasury. As one of the key aggrieved Beneficiary Owners of the loaned 10,000 tonnes of gold and the currency boxes etc., the World Court powers will enable them to seize US assets around the world within their jurisdictions and probably even on the high seas and at airports, to the value of the stolen/diverted assets.