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CNBC EXCERPTS: BILLIONAIRE INVESTOR WARREN BUFFETT ON CNBC’S “SQUAWK BOX” TODAY

Jennifer Dauble
Wednesday, 24 Oct 2012 | 12:06 PM ET

WHEN: TODAY, WEDNESDAY, OCTOBER 24TH

WHERE: CNBC'S "SQUAWK BOX"

Following are excerpts from the unofficial transcript of a CNBC interview with billionaire investor Warren Buffett on CNBC's "Squawk Box" today. The full transcript will be available on buffettwatch.cnbc.com. Video of the interview is available on CNBC.com.

All references must be sourced to CNBC.

BUFFETT ON US ECONOMY VS WORLD:

WE'RE GOING TO MAKE A LOT MORE MONEY IN CARPET THIS YEAR THAN WE MADE LAST YEAR. YOU KNOW, MORE THAN DOUBLE PROBABLY, AND WE HIRE PEOPLE WHEN THAT HAPPENS. SO THE UNITED STATES ECONOMY IS NOT TANKING. ASIA FROM A HIGHER LEVEL, I WOULDN'T NECESSARILY CALL IT TANKING, BUT IT'S HEADING DOWN, AND EUROPE HAS BEEN HAVING ITS TROUBLES FOR SOME TIME AND THEY HAVEN'T ENDED.

BUFFETT ON WELLS FARGO:

QUICK: WHAT HAVE YOU BEEN--WHAT'D YOU BUY IN THE LAST WEEK?

BUFFETT: IN THE LAST WEEK, I BOUGHT SOME WELLS FARGO.

QUICK: YOU DID?

BUFFETT: YEAH.

QUICK: SO CONTINUE TO BUY.

BUFFETT: BUT WE ONLY HAVE 430-SOMETHING MILLION SHARES, SO I DIDN'T FEEL WE HAD ENOUGH.

BUFFETT ON THE BANKS:

NOW, IF YOU HAVE 20 TIMES LEVERAGE AND YOU'RE GETTING 1.5 PERCENT ON ASSETS, YOU'RE MAKING 30 PERCENT ON EQUITY. AND THAT WAS NOT LOST ON PEOPLE A FEW YEARS BACK. AND THEY PUSHED BALANCE SHEETS, AND THEY'RE STILL PUSHING THEM IN EUROPE. BUT THEY'VE CUT BACK ON THAT HERE. SO THEY WILL NOT BE HAVING THE LEVERAGE IN THE BANKING SYSTEM. IT'LL BE EVEN MORE RESTRICTED AMONG THE BIGGER BANKS AS PART OF THE NEW RULES, AND YOU WON'T BE ABLE TO EARN MORE ON ASSETS THAN BEFORE, AND SO WITH LESS LEVERAGE IN THE SAME RETURN ON ASSETS, YOU WILL HAVE A LOWER RETURN ON EQUITY.

BUFFETT ON IBM:

WELL, THEY'RE STRUGGLING A LITTLE, AND IT WAS KIND OF INTERESTING, IN THE--WE OWNED--WE OWN A LITTLE MORE THAN WE OWNED AT YEAR-END, AND WE GOT GREAT CONFIDENCE IN THAT OVER THE YEARS. BUT IN THE THIRD QUARTER, THEY HAD A SALE OF A SUBSIDIARY, RSS, THAT PRODUCED ABOUT 288 MILLION, I THINK, AFTER TAX, WHICH WAS ALL THE GAIN. AND TO MY KNOWLEDGE, THE NEW YORK TIMES DID NOT HAVE A LINE ON IT, THE WALL STREET JOURNAL DID NOT HAVE A LINE ON IT, THE FT DID NOT HAVE A LINE ON IT. DIDN'T GET DISCUSSED. IT WAS ONE LINE IN THE REPORT AND IT ACCOUNTED FOR ALL THE GAIN AND EARNINGS, AND IT WAS A SALE OF A PART OF A BUSINESS. YOU KNOW, I THINK THE REPORTING MISSED THE BOAT ON THAT ONE.

BUFFETT ON POSSIBLE ACQUISITION:

QUICK: HOW MUCH CASH DO YOU HAVE ON HAND RIGHT NOW?

BUFFETT: WE PROBABLY HAVE AT LEAST 40 BILLION.

QUICK: ARE YOU IN THE HUNT--ON THE HUNT FOR ANOTHER BIG ACQUISITION?

BUFFETT: I'M SALIVATING, YEAH.

BUFFETT ON NEW STOCKS:

ANY NEW COMPANY, ANY NEW STOCK I LOOK AT, I MEASURE IT AGAINST THE BEST IDEA I'VE GOT AMONG THE PRESENT ONES. AND I'M PERFECTLY WILLING TO JUST KEEP ADDING TO THE PRESENT ONES. SO IT HAS TO BEAT THEM. AND I KNOW THOSE COMPANIES PRETTY WELL SO IT'S A PRETTY HIGH THRESHOLD.

BUFFETT ON WORLDWIDE SLOWING:

WELL, I THINK--I THINK THE STOCK MARKET GENERALLY IS THE BEST PLACE TO HAVE MONEY, AND--BUT I THINK THAT THERE'S NO QUESTION THAT WORLDWIDE THERE IS SOME SLOWING DOWN GOING ON. AND IN THE UNITED STATES, ACTUALLY, RESIDENTIAL HOUSING IS PICKING UP, AND WE'VE BEEN WAITING FOR THAT A LONG TIME, AND THAT WILL HAVE A SIGNIFICANT IMPACT. IT HASN'T GOTTEN TO ANY BIG LEVEL YET, BUT OUR CARPET BUSINESSES AND BRICK BUSINESSES AND ALL OF THAT WILL COME ON WITH RESIDENTIAL CONSTRUCTION, AND THAT HAS TURNED. BUT THE GENERAL ECONOMY, I THINK IT'S A LITTLE BIT BETTER IN THE US, CERTAINLY BETTER IN THE US THAN IT IS IN EUROPE. AND IN TERMS OF THE RATE OF DECLINE IN ASIA, IT'S REASONABLY STEEP AND WE'RE STILL INCHING AHEAD. BUT IT'S INCHING.

BUFFETT ON SIMPSON-BOWLES:

EVERYBODY KNOWS WHAT THE GENERAL SOLUTION SHOULD BE AND YOU CAN ARGUE ABOUT WHETHER REVENUE SHOULD BE 19 OR 18 1/2 PERCENT OF GDP OR WHETHER EXPENSES SHOULD BE 21 OR 21 1/2 OR--BUT EVERYBODY KNOWS BASICALLY WHAT THE SOLUTION IS. AND BOWLES-SIMPSON FITS IN THERE--SIMPSON-BOWLES. WE'RE GOING TO STAY AWAY FROM THAT ACRONYM OF BOWLES-SIMPSON. THE RIVLIN-DOMENICI, I MEAN, THERE ARE HUNDREDS OF PEOPLE THAT COULD--THAT YOU KNOW THAT COULD DESIGN A SENSIBLE PLAN, AND ANY PLAN THAT GETS DICK DURBIN AND TOM COBURN TO SIGN ON, YOU KNOW, THAT REFLECTS A LOT OF NEGOTIATION AND EFFORT BY TWO TERRIFIC PEOPLE IN SIMPSON AND BOWLES. IT'S GOING TO GET DONE AND THE AMERICAN PEOPLE WON'T STAND FOR IT NOT GETTING DONE. AND I--INCIDENTALLY, I THINK IT'LL GET DONE WITH--I DON'T MEAN SIMPSON-BOWLES PRECISELY, BUT SOMETHING MATERIALLY CLOSE TO IT

BUFFETT ON STOCK BUYS:

NO. WE SOLD THAT, WE'VE SOLD KRAFT, WE'VE SOLD SOME COMPANIES THAT ARE VERY, VERY GOOD COMPANIES. AND WE'VE USED THAT MONEY, WE'VE USED IT TO BUY, WHAT, 11 OR $12 BILLION WORTH OF IBM IN THE LAST 12 MONTHS. WE'VE BOUGHT--WE BOUGHT MORE WELLS, ANOTHER BILLION DOLLARS WORTH OF THAT. AND THEN WE BOUGHT SOME MORE WALMART A WHILE BACK, ANOTHER 7 OR 800 MILLION OF THAT. AND THEN ADDITIONALLY, I'VE GIVEN SOME MONEY TO THESE TWO NEW MANAGERS TO RUN, TOO. SO YOU'LL SEE A LOT OF STOCKS THAT THEY'VE SELECTED. SO THE MONEY MOVES AROUND. IT MOVES AROUND PRETTY SLOWLY, BUT IT MOVES AROUND.

BUFFETT ON EUROPE:

THEY HAVE A REAL BANKING PROBLEM. I MEAN, THEY, TO SOME EXTENT, ENCOURAGE THEIR BANKS TO LOAD UP WITH SOVEREIGN DEBT SO YOU HAVE THE SOVEREIGNS COUNTING ON THE BANKS AND THE BANKS COUNTING ON THE SOVEREIGNS. AND YOU KNOW, THAT CREATES A PROBLEM. AND THEN IT'S GOING TO BE A VERY TOUGH THING TO HAVE AUSTERITY AND AT THE SAME TIME GROW GDP. I--IT'S NOT AN EASY SOLUTION. EUROPE ISN'T GOING TO GO AWAY. I MEAN, WE'LL BE DOING LOTS OF BUSINESS THERE FIVE OR 10 YEARS FROM NOW, BUT I THINK IT COULD BE PRETTY ROUGH THERE FOR A WHILE.

BUFFETT ON GREG SMITH:

I HAVEN'T READ THE BOOK. I SAW AN INTERVIEW, BUT I THINK THE IDEA OF A GUY 33, WHO WAS MAKING $500,000 A YEAR AND IS UNHAPPY BECAUSE HE ISN'T MAKING A MILLION AND PROBABLY IN ANY OTHER OCCUPATION BUT INVESTMENT BANKING WOULD BE MAKING $75,000 A YEAR, I THOUGHT IT WAS--I THOUGHT--THE IDEA THAT ONE DISGRUNTLED EMPLOYEE LEAVING A COMPANY WITH 30,000 EMPLOYEES WARRANTS AN OP-ED WITH NO SPECIFICS REALLY IN IT EXCEPT THE WORD BUFFETT, SO I THINK I--I DID NOT THINK THAT REFLECTED GREAT EDITORIAL JUDGMENT.

BUFFETT ON QE3:

I WOULD LISTEN VERY CAREFULLY TO BERNANKE, BUT MY INSTINCTS WOULD PROBABLY BE TO GO THE OTHER DIRECTION. BUT I WOULD LISTEN TO HIS ARGUMENTS. AND...THAT'S WHY I'D LISTENED CAREFULLY. BUT MY INSTINCTS ARE TO GO AGAINST IT. I THINK IT'S MUCH EASIER IF YOU'RE A CENTRAL BANK AND YOU COULD PRINT MONEY. IT'S MUCH EASIER TO ACQUIRE 2.6 OR 7 BILLION OR TRILLION, ACTUALLY, OF SECURITIES THAN IT WILL BE TO UNWIND THAT OPERATION

BUFFETT ON BERNANKE:

I THINK BERNANKE HAS DONE AN ABSOLUTELY SUPERB JOB. I MEAN, WHAT HE DID IN THE FALL OF 2008 WAS GUTTY. IT WAS BASICALLY RIGHT. YOU KNOW, EVERYBODY TALKING ABOUT TINKERING AT THE EDGES. BUT I WILL SAY THIS: IF BEN BERNANKE HADN'T BEEN THERE IN 2008, I'M NOT SURE WHERE WE WOULD BE NOW. SO I HAVE ENORMOUS RESPECT FOR HIM.

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