Warren Buffett spoke live this morning (Monday) with CNBC's Squawk Box about his role in today's $23 billion Mars acquisition of Wrigley

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[WWY  Loading...      ()   ].  The previous Warren Buffett Watch post has the highlights.

Here is the complete interview in two parts:

Becky Quick:  Warren, thanks for joining us this morning.  Appreciate it.

Warren Buffett:  My pleasure. 

Becky: People are always trying to figure out what you're doing with your cash.  Why would you look at Wrigley right now?  Why this deal right now?

Buffett:  Well, I've been conducting a 70-year taste test, Becky, since I was about seven years old, on the products.  I've done the same thing with Mars products.  And they met the 70-year taste test (laughs.)  But to tell you the truth, the Mars people asked me about participating in this, and we are financing.  But we are a very, very junior partner, although we will have about 6-1/2 billion dollars in it.   But we are a financing partner, in effect, for Mars in this acquisition.

Becky:  Six-and-a-half billion dollars, though.  That's still a substantial take.  What do you look at beyond just the taste test?  Do you think that this is the type of a bet that makes a good deal when you're looking at economic hardship times?  Is this a recession-proof play?

Buffett:  Yeah.  Both companies have great brands.  When I talk to classes of university students, for a dozen years or more I've used Wrigley as an example ... I haven't known about Mars except that they're a provate company.  But there is really nothing that can go wrong with something like the Wrigley or the Mars brands.  It's literally true that they have, ah, faced the test of time over decades and decades and people use more and more of their products every day.

Joe Kernen: Warren, this is Joe.  You're not going to operate this, or exert any influence operating ..

Buffett: No.

Joe: .. So it's not like we're going to see See's (Candies) somehow with a Mars, or a Wrigley.  You've got Dairy Queen.  I see synergies with Coca-Cola.  I mean, I see a lot of things happening here, Warren, none of them good for my waistline, but I see a lot of things you could do here.  But that's not what's in the cards?

Warren:  That's not what's in the cards at all.  No.  In matter of fact Mars has had a boxed chocolate operation that they started, I don't know, thirty years ago, to compete with See's, so we're in different ends of the game.  There will be no connection at all.    

Joe:  I see once again that your 6-1/2 billion is going into something like this and not going into a financial on Wall Street.  But a lot of people think they've bottomed now.  Are you finally ready to think now that maybe it's safe to put your toe in the water?

Buffett:  Well, I understand a Wrigley or a Mars a whole lot better than I understand the balance sheet of some of the big banks.  I know what I'm getting in this, and some of the larger financial institutions, I really don't know what's there.

Joe:  Do you feel a lessening of some of the pressures and some of the angst, some of the credit crunch?  Do you think we're over the hump, Warren?

Buffett:  Well, I think that what the Fed did, and I think it was proper, what the Fed did with Bear Stearns was a big line in the sand.  That changed the game.  At that point, the world is looking kind of different in the financial world.

Carl Quintanilla:  Warren, we all know that a lot of the companies in this space are leveraged to the price of commodities, whether it's cocoa, or what have you.   Do you have a comment on what we've just been talking about the past week, whether it's grains, or just global commodities in general.  Does it feel toppy to you?

Buffett: Well, I've got a son that's a farmer.  He's a very happy fellow.  They used to tell the story out here in Nebraska about the farmer that won the lottery, and they sent a television crew out to see him.  And the television interviewer said, 'You know, you've just won twenty million dollars in the lottery, what are you going to do with it?  And the farmer said, 'Well, I think I'll just keep farming until it's all gone.'  (Laughter.)  Well, that was the situation in farming until the last year or so, but it's a different world now.  And I don't know how much ethanol contributed to it, but, you know, you get twelve dollar soybeans and six dollar corn and that sort of thing, and it's going to have an effect.  I'm amazed we haven't seen more inflationary effect so far with the CPI, when you consider what steel is doing, what oil is doing, what grains are doing, there is a lot of potential inflation down the road.

Becky:  Hey Warren, we've been talking this morning about whether or not we're in a recession at this point.  The last we talked with you was a couple of months ago, and you said it looked by any sort of relevant manner, if you're trying to measure this, by any sort of real estimate it looked like we're in a recession.  But there are some people who are saying, yeah, it doesn't look like a recession to them.  We've got GDP this week.  Do you still stand by that idea that it looks like we're in a recession?

Buffett:  Yeah.  I think we're in a recession.  I mean, a recession is defined in a certain way by the National Bureau of Economic Research, but I think it's defined by the man in the street a little differently than whether there have been two quarters of reported (negative) GDP growth.  And incidentally, when GDP growth is below 1% a year it's really falling on a per capita basis because our population increases about one percent.  So even though the National Bureau uses an absolute figure, it's up one-tenth they don't count that as a recessionary quarter, but the GDP per capita has gone down in a quarter where the gain is half a percent or something of the sort.  We are in a recession, unless you want to stick strictly to the technical definition, which I really don't think has much meaning to the fellow who has lost his job or is facing a money-market fund that isn't paying him out, or whatever it might be.

Steve Liesman:  What does it say about credit markets that you guys are acting as a financier in this case, and is this a new role for Berkshire that you see yourself increasingly playing with the considerable cash on your books?

Buffett:  Yeah, it's not a common role for us but it's something we have done before and we'll probably do again.  I think in this particular case, we fit very well as a partner for what the Mars family wanted to achieve in this purchase.  They needed somebody they felt comfortable with, they knew the check would clear, that wouldn't interfere in any real way.  So we've done it differently than most people would have done it.  We did it the way they wanted it done.

Michael Farr, CNBC Squawk Box Guest Host:  Mr. Buffett, good morning, it's Michael Farr.

Buffett:  Hi, Michael. 

Farr: When you look at this deal, why now?  The economy, if things are contracting and we've got rates where they are, why is this a good time for an acquisition?  And do you have any integration concerns as Mars begins to take on this public company?

Buffett: Well, I think a good time to buy a really great business is when you can do it.  Many, many years ago, as I remember, Herman Lay offered the Frito-Lay company to Coca-Cola.  And he offered them the company first, as I understand it, and they decided for one reason or another they didn't want to do it then.  And of course Pepsico bought it and it's the best thing they ever did.  So if you get a chance to buy a wonderful business, then my advice is, grab it.  As Yogi Berra would say, 'When you come to a fork in the road, take it."

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