Warren Buffett is prescribing some serious medicine to remedy the economy. And it could be a bitter pill for many to swallow.
In an exclusive interview CNBC's Julia Boorstin reveals that the Oracle of Omaha advocates halting the construction of homes.
“If you want to end the recession as soon as possible do nothing to encourage new homebuilders,” says Buffett. "That’s tough on the homebuilders but that’s the prescription for getting supply and demand back in balance.”
Talk about tough love, that's downright brutal especially if you’re one of the millions who work for our nation’s homebuilders. But desperate times calls for desperate measure.
“There is no silver bullet,” Buffett adds. “The original cause of this was the housing bubble… we built a couple million housing units a year… surprise we had too many houses.. you can’t work that off in a day, week or month. The best thing we can do is not to be building a lot of new houses.”
And that’s not all Buffett told us. He’s also on board with a second stimulus. When asked if there should be another one he replied, “I think there probably should be.”
That may have something to do with his outlook for Main Street. At best he’s cautious. He tells Boorstin, the consumer is still very soft. We’re still in the middle of a movie that started in September and he’s still not sure how long the movie is.
Let’s hope it ends soon. This movie could give you nightmares.
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