Buffett says the economy isn’t likely to improve until 2009…
Warren Buffett said the U.S. economy is unlikely to improve before 2009, and there was a “reasonable chance” that Fannie Mae (FNM.N) and Freddie Mac (FRE.N) shareholders would be wiped out though the companies themselves are too big to fail.
The bright spot is that 2009 isn’t that far away!
Regarding those who haven’t been acting in a financially responsible way…
“You always find out who’s been swimming naked when the tide goes out. We found out that Wall Street has been kind of a nudist beach,”
On Fannie and Freddie..
“They’re too big to fail,” Buffett said. “That doesn’t mean that the equity can’t get wiped out, and it almost has. In a practical sense, as institutions, they don’t have any net worth.”
Buffett forecast that “you’ll see some action fairly soon” to support the companies, but that he has not been approached to assist in any bailout. He said “nothing is going to happen” to investors in the companies’ insured mortgages or debt, but “the equity and preferred stock is another question.”
