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Warren Buffett Weighs in on Global Economy

Written By Brian Hicks

Posted October 25, 2012

In a two-hour interview with CNBC on Wednesday, famed investor Warren Buffett discussed a wide range of topics including the global economy.

Buffett warned that the world’s economy is not just in a sluggish phase but is actively slowing down based largely on the continued economic troubles in Europe and declining trends in Asia.

However, he appeared optimistic about the U.S. economy and was sanguine about the presidential election positively affecting the domestic economy regardless of outcome.

He pointed out that the housing market appears to be resurgent, though nowhere near former heights. Buffett’s faith in the housing market has received attention before.

At the same time, Buffett expressed a strong desire to make another major acquisition for Berkshire Hathaway (NYSE: BRK.A). He mentioned the company’s current holdings of $40 billion in cash, and he added that two major deals worth roughly $20 billion each had collapsed earlier this year, though he failed to go into specifics.

At the interview, Buffett was joined for a while by GE (NYSE: GE) CEO Jeff Immelt. Immelt concurred that the wider economic trends do indeed show signs of health, but that volatility is extremely high. Both men emphasized the necessity of considering long-term positive trends for investments.

Regarding the impending ‘fiscal cliff’ being bandied about in Washington by both Republicans and Democrats, Buffett declared that the real solutions are obvious to the leaders of both parties, but that the upcoming election has paused decisive action.