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Warren Buffett on Market Meltdown: It's Happened Before And It's Been Even Worse

Warren Buffett doesn't appear to be worried about multi-year lows in the stock market.

In a videotaped interview with Liz Claman of Fox Business Network, a smiling Buffett says:

"Well, it's happened before. It's happened a lot worse than that. I mean, in 1929, it went from 381 down to 42, an 89 percent decline. So, we've had it. I mean, most people don't even remember from '37 and '38 that it went down 50 percent, for example...

That 66 to 11497 for the Dow in the last century was not in a straight line. A capitalistic system overshoots, it overshoots in markets, it overshoots in terms of leverage and all kinds of things. But it works very well over time."

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As for Berkshire's sharp stock drop that has taken it down almost 50 percent from last December's high, that's happened before, too. Three times. "It happened when it went from 90 to 40 back in 1974 and '5, it happened in 1987, it went down 50 percent, in 1998 to 2000 ... I hope I live long enough so it happens a couple more times to me."

His one warning: don't borrow money to make investments.

Asked how Henry Paulson is doing as Treasury Secretary, Buffett acknowledged that the economy and markets are in a "very, very tough situation" with "no silver bullets" available to make everything better immediately. "We are in a negative feedback cycle that's going to last for a while."

Buffett predicts that unemployment will get worse over the next several months, going to 8 percent of higher, well above the Federal Reserve's peak projection of 5.9 percent.

But, he says, the U.S. economy should start to recover by the middle of next year and will eventually "go to new heights."

And, no surprise here, he says he wouldn't take the job of Treasury Secretary even if it was offered to him by President-elect Barack Obama, although he's happy to help in other ways. He expects an announcement in the next few days on who will run Treasury.

He jokes that he hasn't been asked and won't be asked. "I'm like a girl sitting at home on Saturday night. I haven't been called. I might like to think I was, but I wasn't."

Current Berkshire stock prices:

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Class B:

Questions? Comments? Email me at buffettwatch@cnbc.com