In a live telephone interview today (Friday) minutes after the House of Representatives passed the bailout bill, Warren Buffett told CNBC's Becky Quick that the measure will help unfreeze the credit markets, but warned that it is not a "panacea" for the economy.
While the rescue package will provide some tools to deal with the financial crisis and prevent what could have been a far worse situation, Buffett predicted that it will be quite a while before the nation's economic recession bottoms out.
He noted that the credit markets had been frozen and were getting worse by the day.
Buffett has made two big investments in recent days, anticipating that Congress would eventually "do the right thing" and pass a financial rescue plan.
Buffett's Berkshire Hathaway holds a large stake in Wells Fargo[WFC 34.56 -0.60 (-1.71%) ], which today announced a deal to buy Wachovia Bank [WB 6.21 2.30 (+58.82%) ]. (Citigroup [C 18.35 -4.15 (-18.44%) ] may challenge that agreement because it had a deal to buy Wachovia's banking assets.)
He told Becky that the Wachovia deal was indirectly spurred by a recent change in the tax laws. Buffett also praised Wells, saying no bank has done a better job for shareholders and depositors during the financial crisis.
He also revealed that he owns only two domestic stocks in his own personal account, Berkshire and Wells. After the live interview, he laughingly told Becky that no one had ever gotten that particular nugget out of him before.
Back in August, Buffett told Becky that Berkshire had been adding to its holdings in either American Express or Wells Fargo. Today, he solved that little mystery. It was Wells Fargo.
Current Berkshire stock prices:
Class A: [US;BRK.A 138500.0 600.00 (+0.44%) ]
Class B: [US;BRK.B 4650.0 42.00 (+0.91%) ]
Also on Everything Warren Buffett
Political Animal - New Zealand Politics
Share Investor Blog - Stockmarket & Business commentary
Share Investor New Zealand Business News- Get more business news
Shareinvestorforum.com - Discuss this topic further
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
Buy new: $19.75