Buffett: U.S. economic growth slowing

Bill Gates and Warren Buffett at Allen & Bill Gates and Warren Buffett at Allen & Co.'s annual Sun Valley Conference in Sun Valley, Idaho, on Thursday. (July 12, 2012) Photo Credit: AP

advertisement | advertise on newsday

Billionaire investor Warren Buffett said Thursday the U.S. economic growth has slowed in the last two months.

Buffett's comments during an interview on CNBC contrast with his more upbeat assessments for the past couple of years. Buffett had described the economy as gradually improving since the fall of 2009 in every area except businesses related to housing.

Buffett said Thursday the U.S. economy has not turned negative, but business in Europe has dropped off quickly in the past two months as debt woes there continued.

"The general economy has been pretty much flat," said Buffett, who was in Sun Valley, Idaho, attending the annual conference hosted by investment banker Allen & Co. that attracts Wall Street and media moguls.

The Berkshire Hathaway chairman and chief executive said one bright spot is that businesses tied to residential housing are improving a bit. But he added, "The little pickup in housing has not been enough to offset what has been going on in the rest of the world."

He's not sure, he said, why the overall economy has been slowing.

Buffett also was asked about JPMorgan Chase CEO Jamie Dimon, a day before the bank is set to report its latest earnings results and shed more light on its loss on a bad trade.

Buffett reiterated his confidence in Dimon even though JPMorgan has said it may lose $2 billion or more on the bad trade. Dimon has apologized to shareholders, and days after the loss was disclosed chief investment officer Ina Drew, who oversaw the trading group responsible for the trade, left the company.

"I think Jamie Dimon is one of the best bankers in the world. He understands banking and risk," said Buffett, who invested in the bank in his personal portfolio and often suggests that investors read Dimon's letters to shareholders.

JPMorgan's loss has heightened concerns that the biggest banks still pose risks to the U.S. financial system, almost four years after the financial crisis in the fall of 2008.

Buffett was also asked about recent troubles at the British bank Barclays, which has been fined $453 million by U.S. and British authorities for supplying false data that went into calculations of the London Interbank Offered Rate, LIBOR, a key global interest rate.

Buffett said he understood why Bob Diamond subsequently resigned as CEO of Barclays.

"I don't think he had any choice but to go," Buffett said.

Diamond agreed to terms for a final settlement, which includes forfeiting up to $31 million in bonuses and incentives, on Tuesday.

You also may be interested in: