Billionaire investor Warren Buffett is warning investors in his annual Berkshire Hathaway report that the recession may continue longer than many of them have been expecting.
Buffett reported that Berkshire Hathaway decreased in value by $11.5 billion in 2008
"Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects," he wrote in the report. He also warned that for industries and others who have become dependent on federal bailout funding, "weaning these industries from the public teat will be a political challenge."
Investors may also be concerned by Buffett's prediction that the economy will be in a "shambles" throughout 2009 and "probably well beyond." Analysts have generally predicted an economic recovery will start late this year.
Separately, investors may have received a faint ray of hope on Monday in the form of Commerce Department figures showing a 0.6 percent increase in consumer spending last month. However, a Bloomberg News report notes that this may have a negligible economic benefit since consumers were most likely taking advantage of very deep post-holiday discounts that were being offered by retailers.
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