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Thursday, 25 June 2009

'No bounce' says Buffett

NEW YORK - WARREN Buffett said on Wednesday that the US economy has 'no bounce' and will take time to recover, but there is no risk of deflation to push it further into despair.

Speaking on CNBC television, the world's second-richest person also praised efforts by the Obama administration and Federal Reserve to jump-start economic activity.

He lamented that the slowdown has hurt his insurance and investment company Berkshire Hathaway, which runs close to 80 businesses and in the January-to-March period had its first quarterly loss since 2001.

'We have had no bounce' in the economy, Mr Buffett said on CNBC television.

Asked whether the economy was still in a 'shambles,' as he had said in February, Mr Buffett said: 'I'm afraid that's true.' But he added: 'I don't worry about deflation at all.'

US gross domestic product fell at a 5.7 per cent annualised rate in the first quarter.

Government efforts to stimulate business activity remain a work in progress, and President Barack Obama on Tuesday again said the nation's jobless rate will rise above 10 per cent.

'They're doing things, but they take a while to have an effect,' Mr Buffett said. 'You can't produce a baby in one month by getting nine women pregnant.'

Buffett nonetheless maintained his long-held belief in the stock market, saying that it is 'attractive over the next 10 years' relative to alternatives.

Asked whether Mr Obama should reappoint Ben Bernanke to lead the Federal Reserve when the chairman's term expires next January, Buffett said: 'I don't see how you could do better.' -- REUTERS

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