News

NEW YORK (Reuters) - Warren Buffett, the world's richest person, said Monday the U.S. economy into a recession which will be more serious than most people expect.
ADVERTISING

Buffett made his comments on CNBC television after his Berkshire Hathaway Inc. (BRKa.N) (BRKb.N) has agreed to invest $ 6.5 billion acquisition of a manufacturer of chewing gum Wm Wrigley Jr Co. (WWY . N) of Mars Inc in a $ 23 billion transaction.

"This is not an area of speciality for me, but my general feeling is that the recession will be longer and deeper than most people think," said Warren Buffett. "It will not be short and shallow.

"I think consumers feel gas and food prices," he added, "did not feel they have a lot of money for other things."

It was not immediately available for further comments. Known for his frugality, 77 years, Warren Buffett has lived in the same room 10-Omaha, Nebraska, a home for a half-century, then it is worth an estimated $ 62 billion.

On Wednesday, the U.S. Commerce Department is expected to say how fast the economy grew in the first quarter. Economists, on average, have projected that the gross domestic product grew at an annualized 0.2 percent rate during the quarter.

Two quarters of declining GDP is a traditional indicator of recession. The latter occurred in 2001. Economists expect the U.S. Federal Reserve on Wednesday cut a key lending rate for a seventh time, beginning last September.

Berkshire is a $ 197 billion conglomerate best known for its insurance fund, as auto insurer Geico Corp., but it has more than 70 companies.

Many of these companies are linked to the housing market, including Acme Brick Co., manufacturer Johns Manville insulation and the real estate brokerage HomeServices of America Inc.

Others rely on consumers to spend more on discretionary items, like Ben Bridge Jeweler and Borsheims Fine Jewelry.

"In retail ... if anything, they got a little less," said Warren Buffett. "Of course, things concerning housing, either brick or whatsoever in carpet factories, businesses have shown uptick not at all. Jewelry had a bad Christmas ... and it remained that way. "

Buffett sees no respite in the housing crisis.

"I think it will be quite long and quite deep, but who knows," he said.

In March, Forbes magazine pegged Buffett net worth to $ 62 billion, before Mexican magnate Carlos Slim's $ 60 billion and Microsoft Corp. (MSFT.O) Chairman Bill Gates $ 58 billion. Gates is a friend of Warren Buffett and Berkshire director.