Berkshire Hathaway Chairman Declares U.S. Already In Recession

May 26, 2008 11:43 a.m. EST

Berlin, Germany (AHN) - Berkshire Hathaway chairman and chief executive Warren Buffett said the U.S. is already in a recession.

In an interview with Der Spiegel, a Germany weekly, Buffett said as far as the average American is concerned, the recession is already taking place. "I believe that we are already in a recession... Perhaps not in the sense as defined by economists... But people are already feeling the effects of a recession," the AP quoted his Spiegel interview.

Buffett's other bad news was that he believes the American recession will be deeper and linger longer than that many want to believe.

The Berkshire head, one of the richest man in the world, was in Europe last week in search of companies to buy. The company, which has $35 billion cash, wants to add more firms to its business empire, which counts interests in insurance, clothing, furniture, natural gas, corporate jet, confection and beverages.

Federal Reserve Bank of New York President Timothy Geithner still prefers to call it a slowdown. At a news conference in Jerusalem, Geithner said, quoted by Bloomberg, "The world is much better positioned to deal with the consequences of the slowdown in the United States... It's looking, at least for now, very resilient to the broad pressures your see, particularly concentrated in the United States."

At the same time, Geithner came to the defense of the seven interest rate cuts made by the U.S. Federal Reserve since mid-September. The rate cuts were strategies designed to ward off the recession that hit the nation in the midst of a housing slump, which in turn, drove up credit costs on a global scale.