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CNBC EXCERPTS: BILLIONAIRE INVESTOR WARREN BUFFETT ON CNBC'S "SQUAWK BOX" TODAY

WHEN: TODAY, MONDAY, NOVEMBER 14TH AT 6:00AM ET

WHERE: CNBC'S "SQUAWK BOX "

Following is the unofficial transcript of a CNBC interview with billionaire investor Warren Buffett, Chairman and CEO of Berkshire Hathaway, today, Monday, November 14th at 6:00AM ET. A full transcript of the interview will be at: buffettwatch.cnbc.com.

All references must be sourced to CNBC.

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BUFFETT ON EUROPE

THEY FOUND KIND OF A FUNDAMENTAL FLAW WHICH IS THAT THEY CAN'T PRINT MONEY. AND WHEN YOU HAVE A LOSS OF CONFIDENCE, THAT BEGINS A RUN WHICH HAS OCCURRED TO SOME DEGREE ON BOTH SOVEREIGN DEBT AND BANKS OVER THERE. IN 2008, WE HAD OUR OWN RUN IN THE UNITED STATES AND IT TOOK THE FULL POWER OF THE UNITED STATES AND SOME VERY STRONG ACTION. THE BELIEF THAT THE AUTHORITIES WOULD DO WHATEVER IT TOOK AND WE DID BELIEVE THAT AND IT LED US OUT, BUT IT'S NOT CLEAR WHO CAN SAY WE'LL DO WHATEVER IT TAKES OVER THERE AND IF THEY HAVE THE ABILITY TO DO WHATEVER IT TAKES.?

BUFFETT ON EUROPEAN MARKETS

WE HAVEN'T DONE IT AND IT'S SOMETHING I LOOK AT EVERY DAY. I'M SURE PEOPLE IN ITALY THAT HAVE DEPOSITS IN EUROS IN ITALY THINK THERE'S SOMETHING RATHER STRANGE HERE WHEN I CAN GET 5X, WELL 3X ESSENTIALLY IN ITALY AND GET X IN GERMANY AND THEY'RE BOTH DENOMINATED IN EUROS. AND WHETHER GERMANS ARE DECIDING THEY'LL PUT THEIR MONEY IN ITALY, I DOUBT IT. IT'S VERY VERY TOUGH TO STOP A RUN. IT TAKES A BELIEF WIDESPREAD BELIEF THAT THE PEOPLE AND AUTHORITY WILL DO WHATEVER IT TAKES TO STOP IT AND THEY HAVE THE ABILITY TO DO WHATEVER IT TAKES.

BUFFETT ON EUROPEAN BANKS

WE THINK OUR BANKS ARE TOO BIG, BUT THOSE BANKS ARE EVEN BIGGER RELATIVE TO THEIR ECONOMIES. AND THEY DO DEPEND ON WHOLESALE FUNDING. AND WHOLESALE FUNDING IS NOT SENTIMENTAL. AND OUR MONEY MARKET FUNDS THAT HAVE HAD LARGE INVESTMENTS IN EUROPEAN BANKS ARE PULLING THEM DOWN. EUROPEAN BANKS NEED MORE CAPITAL. AND THE SOONER THEY GET IT, THE BETTER.

BUFFETT ON GOOD BUSINESSES

IF U TAKE YOU OUR FIVE LARGEST BUSINESSES OUTSIDE OF INSURANCE THAT WOULD BE THE BURLINGTON NORTHERN RAILROAD, MIDAMERICAN ENERGY, MARMON WHICH HAS OVER 110 BUSINESS SERVING BASIC INDUSTRY, ISCAR WHICH MAKES CUTTING TOOLS USED THROUGHOUT THE WORLD -- A BAROMETER OF INDUSTRY-- AND I WOULD TAKE OUR NEW ACQUISITION GROUP AS WELL. EVERY ONE OF THOSE COMPANIES WILL SET A RECORD FOR EARNINGS THIS YEAR. IN AGGREGATE THEY WILL EARN $9 BILLION PRETAX AND IT IS A RECORD FOR ALL FIVE AND THEY CUT ACROSS INDUSTRY. IF YOU LOOK AT MANY OF OUR SMALLER BUSINESSES, RECREATIONAL VEHICLE BUSINESS, FARM BUSINESS, YOU NAME IT, THEY'RE ALL DOING WELL. WHAT IS GETTING KILLED AND WHAT IS NOT IN A RECESSION BUT IN A DEPRESSION IS ANYTHING CONNECTED WITH RESIDENTIAL CONSTRUCTION.

BUFFETT ON NO QE3 NEEDED

I DON'T THINK IT IS STIMULUS THAT IS NEEDED, WHAT IS NEEDED IN HOUSING IS TO CREATE MORE HOUSEHOLDS THAN HOUSING UNITS. AS SOON AS THAT GETS TIGHT - OBVIOUSLY ITS A LOCAL SITUATION SO IT IS NOT GOING TO BE THE SAME IN OMAHA AS FLORIDA - BUT EVERY DAY WE ARE REDUCING THE HOUSING STOCK, WE ARE CREATING MORE HOUSEHOLDS THAN HOUSING UNITS AT THIS 600,000 PACE OF HOUSING STARTS. YOU KNOW THE ANSWER IS COMING YOU JUST DON’T KNOW EXACTLY WHEN. AND WHEN IT COMES IT WILL BE A BIG CHANGE.

BUFFETT ON ECONOMY SEGMENTED

YOU HAVE A HUGE SEGMENT OF THE AMERICAN ECONOMY THAT'S DOING REALLY QUITE WELL. AND THEN YOU HAVE THE OTHER SEGMENT WHICH IS IN A DEPRESSION AND THAT DEPRESSION HAS MUCH MORE EFFECT ON UNEMPLOYMENT I BELIEVE THAN IS GENERALLY REALIZED. WHEN THAT COMES BACK AND IT WILL COME BACK, WHEN THAT COMES BACK, WHEN WE GET A MILLION HOUSING UNITS ANNUALLY STARTED, I THINK UNEMPLOYMENT WILL GO DOWN A LOT.

BUFFETT ON JOB CREATION

IF YOU BUILD A TOMB FOR ME, IF I START BUILDING A HUGE TOMB AND I EMPLOY 20,000 PEOPLE TO HAUL GRANITE BLOCKS ACROSS THE PLAINS OF NEBRASKA TO BUILD THE TOMB WHICH WILL MAKE EVERYBODY FORGET ABOUT EGYPT, THAT CREATES JOBS, TOO. BUT EVERYBODY CLOAKS EVERYTHING IN JOB CREATION. SO I'M SUSPICIOUS WHEN PEOPLE THIS WILL CREATE JOBS, IF I OPEN A HAMBURGER STAND, IT WILL CREATE JOBS. THERE'S A LOT OF RHETORIC THAT GETS A LITTLE LOOSE.

BUFFETT ON IBM

I JUST CAME AWAY WITH A DIFFERENT VIEW OF THE POSITION THAT IBM HOLDS WITHIN I.T. DEPARTMENTS AND WHY THEY HOLD IT AND THE STICKINESS AND A WHOLE BUNCH OF THINGS. AND ALSO I READ VERY CAREFULLY WHAT SAM PALMISANO SAID ABOUT WHERE THEY'RE GOING TO BE AND HE'S DELIVERED BIG TIME ON HIS FIRST PLEDGE ALONG THOSE LINES-- SO WE BOUGHT ABOUT 64 MILLION SHARES AND COST US ABOUT $10-POINT-SIX OR SEVEN BILLION DOLLARS.

BUFFETT ON IBM REVERENCE

A FEW YEARS BACK THEY HAD 240 MILLION OPTIONS OUTSTANDING. NOW THEY'RE DOWN TO ABOUT 30 MILLION. THEY TREAT THEIR STOCK WITH REVERENCE WHICH I FIND IS UNUSUAL AMONG BIG COMPANIES. THEY REALLY -- THEY ARE THINKING ABOUT THE SHAREHOLDERS. ?

BUFFETT ON MICROSOFT

MICROSOFT IS OFF BOUNDS TO US BECAUSE OF MY FRIENDSHIP WITH BILL. IF WE SPENT SEVEN MONTHS BUYING MICROSOFT STOCK AND DURING THAT PERIOD THEY ANNOUNCED A REPURCHASE OR INCREASE IN THE DIVIDEND OR ACQUISITION, PEOPLE WOULD SAY YOU'RE GETTING INSIDE INFORMATION FROM BILL. SO I HAVE TOLD TODD AND TED AND MY CLIENT AND MYSELF THAT WE DO NOT EVER BUY A SHARE OF MICROSOFT. I THINK MICROSOFT IS ATTRACTIVE. BUT WE WILL NEVER BUY MICROSOFT. PEOPLE WOULD JUST ASSUME I KNEW SOMETHING.

BUFFETT ON CHINA AND US

CHINA AND THE UNITED STATES OVER TIME WILL LARGELY GET ALONG. WE LARGELY HAVE THE SAME INTEREST. WE BOTH HAVE NUCLEAR BOMBS. AND NOT IN OUR INTEREST TO START GETTING REALLY FURIOUS WITH EACH OTHER. AND THERE WILL BE TENSIONS. WE'LL WANT TO PLAY THE GAME OUR WAY. THEY'LL WANT TO PLAY THE GAME THEIR WAY AND WE'LL BOTH HAVE TO GIVE IN SOME CASES.

BUFFETT ON CHINA PRESENT

THEY'RE REALLY COMING OFF 40 YEARS ESSENTIALLY OF A REAL HISTORY. I MEAN FOR CENTURIES THEY WERE STUCK IN THE SAME PLACE. RIGHT. AND THEY'RE 40 YEARS INTO THE LIFE OF WHAT I CONSIDER THE PRESENT CHINESE COUNTRY. AND 40 YEARS INTO OUR COUNTRY WE HAD HAVE SLAVERY. WE HAVE -- SO I WOULDN'T EXPECT THEM TO ACCOMPLISH IN FORTY YEARS WHAT IT'S TAKEN US 200 YEARS TO ACCOMPLISH.

BUFFETT ON PENALTIES

THERE SHOULD BE MUCH MORE EXTREME PENALTIES FOR THE CEOS, THE DEPARTING CEOS OF COMPANIES THAT ARE IMPORTANT ENOUGH TO REQUIRE SOCIETY TO INTERVENE. THE IDEA THAT HUGE INSTITUTIONS FAIL AND TAXPAYERS HAVE TO, THE REPRESENTATIVES HAVE TO RUSH IN AND ROIL MARKETS AND ALL THAT SORT OF THING AND THEN THE CEO'S WALK AWAY RICH IS, I THINK -- I THINK IT'S A TERRIBLE THING MORALLY. BEYOND THAT, I THINK IT ENCOURAGES BAD BEHAVIOR.

BUFFETT ON WELLS FARGO

I BOUGHT WELLS FARGO IN THE LAST QUARTER AND THE QUARTER BEFORE THAT THAT AND THE QUARTER BEFORE THAT AND I ALSO BOUGHT IT 20 YEARS AGO. IF I FIND A GOOD BUSINESS - IF I OWN PRIVATELY A GOOD MCDONALD'S STAND, I OWN 40% AND SOMEBODY WANTED TO SELL ME TEN PERCENT MORE AT AN ATTRACTIVE PRICE, I WOULD BUY 10% MORE AND I WOULDN'T WORRY ABOUT THE NEWS HEADLINES THAT DAY I'M GOING TO OWN THE BUSINESSES FIVE, 10, OR 20 YEARS FROM NOW.

BUFFETT ON SIMPSON BOWLES

I THINK WHAT HAPPENED WAS SIMPSON BOWLES WAS AN ABSOLUTE TRAGEDY. I MEAN HERE ARE TWO EXTREMELY HIGH GRADE PEOPLE. THEY HAVE DIFFERENT IDEAS ABOUT GOVERNMENT. BUT THEY'RE SMART. THEY'RE DECENT. THEY GOT GOOD SENSES OF HUMOR, TOO. THEY'RE GOOD AT WORKING WITH PEOPLE. THEY WORK LIKE THE DEVIL FOR TEN MONTHS OR SOMETHING LIKE THAT. THEY COMPROMISE. THEY BRING IN PEOPLE AS FAR APART AS DURBIN AND COBURN TO GET THEM TO SIGN ON. AND THEN THEY'RE TOTALLY IGNORED. I THINK THAT'S A TRAVESTY.

BUFFETT ON SUPER COMMITTEE

I WOULDN'T JUDGE IT TOO SOON BECAUSE I THINK THE COMMITTEE DID SOMETHING VERY SMART IN TERMS OF STAYING PRIVATE FOR A LONG TIME. IF YOU GO UP THERE AFTER THE FIRST SESSIONS AND PLANT YOUR FEET FIRMLY IN CEMENT, IT MAKES IT MUCH TOUGHER TO NEGOTIATE AND WORK AS YOU GO ALONG. ALMOST ANY BIG IMPORTANT NEGOTIATION WHERE PEOPLE HAVE STRONG FEELINGS ON BOTH SIDES, THAT HAS A DEADLINE, THE ACTION TAKES PLACE VERY SHORTLY BEFORE THE DEADLINE. SO I WOULD NOT RULE OUT THEM DOING SOMETHING SIGNIFICANT.

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