Warren Buffett on the Economy, Wells Fargo, Newspapers & More (Lengthy Interview) ~ market folly

Friday, July 13, 2012

Warren Buffett on the Economy, Wells Fargo, Newspapers & More (Lengthy Interview)

Warren Buffett co-hosted Bloomberg TV's "In the Loop" this morning and we wanted to summarize his interview with the main talking points.  One of the main takeaways is that Berkshire has invested in Phillips 66 which we broke down in a separate post.

Here are some takeaways from Buffett's interview:

On the Housing Market:  "It is starting to recover. The general economy has probably slowed down a little in the last few months. The bank the housing market is recovering…We are seeing an improvement. We have moved noticeably in the last few months. It was just a question of getting households in balance with housing units. That happens at different paces in different parts of the country. You have seen a much better balance developing here in recent months. That is why you are seeing a pickup in prices.”

Will the US Fall Off the Fiscal Cliff?  “It depends on the election, but I think people are quite disgusted with Congress. The idea of having a debt ceiling -- as this country grows, our debt capacity grows. To go through this charade, we are going to increase the debt ceiling, so why Congress does not do it in five minutes instead of spending weeks and weeks posturing and complaining and holding other things hostage, I think it is disgusting. I think they ought to do it this afternoon. They know they are going to do it, and they are all just sitting around using it as a little pond in the game to try to embarrass the other side. Only Congress passes bills, and the debt ceiling is up -- to me it is the most obvious of all. I do not know why the majority and minority leaders of both houses do not say we are going to do that this afternoon. I think it would give the American public the confidence that at least these people will not use everything in the world as a political.”

On Wells Fargo (WFC): “I like Wells Fargo better than anything by far. It complicates life when I and buying things as opposed to the Berkshire Hathaway. I get what is left over…I like Wells Fargo better [than JPMorgan]. We have been buying Wells Fargo month after month for a lot of years. Among the big banks, I think it is the best. “

On Why He's Investing in Newspapers:  “These are smaller newspapers generally. Newspapers used to be primary virtually everything. They have lost their primacy in many areas. If you lived in Nebraska and you are interested in at Nebraska football or your high school and what is going on with your neighbors, you are only going to find it in the independent papers. The smaller paper is still primary to many areas of interest.”

Would He Invest in News Corp's Publishing Unit?  “I would rather buy newspapers myself directly…I like buying individual papers at the right price. The prices should be low because their revenues are going to decline over time. We are not buying into a business where revenues are going to increase. We have to buy them at the right price. We have to buy papers that are subject to less erosion because they have lost their primacy.”

And embedded below is the video of Warren Buffett's full appearance this morning on Bloomberg TV:

 For more on the Oracle of Omaha, head to a tour of Warren Buffett's office as well as Warren Buffett's recommended reading list.

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