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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Buffett: U.S. Economy Has 'Fallen Off a Cliff'

Berskshire Hathaway chief executive and super-investor Warren E. Buffett had a three-hour sit-down interview with CNBC this morning, taking questions from reporter Becky Quick and viewers.

Buffett said the U.S. economy has "fallen off a cliff" but that he'd rather be riding out the storm in the U.S. than anywhere else.

Last fall, Buffett said the U.S. economy had been hit by the equivalent of the attack on Pearl Harbor. You decide if that's better or worse than falling off a cliff.

Here's a live CNBC blog of the entire interview.

Here are CNBC's highlights of the interview:

-- The economy "can't turn around on a dime," Buffett said, and a turnaround "won't happen fast."

-- Five years from now, the economy will be running fine, he said. The strength of the American system will pull it through, just as it has many times in the past.

-- Democrats and Republicans should work together and not try to take advantage of the economic situation to achieve partisan goals, Buffett said.

-- Inflation has the "potential" to be worse than the 1970s, he said.

-- Most banks are in "pretty good shape," Buffett said, and can "earn their way out" of the current problems given the low cost of funds. Banks, however, "need to get back to banking," he added.

-- It's extremely important that the government make clear depositors won't lose their money if banks fail. President Obama needs to make a "clear statement" in support of the banking system, said Buffett, as of this time last year, the world's richest person.

You can read Buffett's annual letter to Berkshire Hathaway shareholders, which came out on Feb. 28, here. Or you can read The Ticker's summary of the letter here.

Buffett said he did "dumb things" in 2008, such as buying a huge stake in ConocoPhillips when oil prices were high.

Buffett is a director of The Washington Post Co.

-- Frank Ahrens
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By Frank Ahrens  |  March 9, 2009; 11:02 AM ET
Categories:  The Ticker  | Tags: Berkshire Hathaway, CBNC, The Washington Post Co., Warren Buffett  
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I would like to hear Mr. Buffett's statements on the U. S. greed that has caused the world economy to fall off a cliff?

Posted by: linda_521 | March 9, 2009 11:17 AM | Report abuse

Why isn't President Obama heeding advise from people such as Warren Buffet, Mitt Romney or Steve Forbes? These are successful businessmen who actually know about business and global marketing and not professors who teach about economics from some elite college. If President Obama really cares about our country and not just using "lip service" then he would be asking for input from both sides of the aisle. This isn't the time to be catering to partisanship. Our nation needs a strong leader who isn't just interested in appeasing special interest groups/lobbyist but working to turn our economy around. Many of us Americans are tired of the rhetoric and want him to "walk the walk" not just "talk the talk". I am speaking for the middle class,tax paying Americans who are still the majority of America's population...

Posted by: Rhonda5 | March 9, 2009 11:34 AM | Report abuse

I don't think Buffett gets it yet.

The american economy is built on sand. We do not have a manufacturing base and have lost large pieces of our technological industry base to offshore companies.

what pulled us and the world through the depression and WW2 was our manufacturing base that could produce the war machinery, planes etc.

what pulled us through the 25 years of the cold war was our defense spending.

what do we have now? where are the jobs in our national economy? even accountant and attorney jobs are getting outsourced.

I don't think Buffett gets it.

Posted by: JohnAdams1 | March 9, 2009 12:28 PM | Report abuse

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