Buffett says financial crisis is an 'economic Pearl Harbor' that needs immediate counterattack

It seems there is a tough time ahead, world's greatest investor has openly announced that consequences of these financial crisis is going to be very bad and US congress need immediate fix.

One must not forget that recently Buffett has done investment in Goldman & GE assuming that $700bn bailout package will be approved by Congress and things will be under control, so it is a human nature to react and create statement causing panic & which can put pressure on congress, in case if he finds that congress might not approve the bailout or might do some modification in it, under such situation his investments in Goldman or GE etc will be lost in value.

So, HBJ Capital team suggests our reader not to get panic with his statements but for short term global market will be under selling pressure and we might see at least 6 months or more period of stagnation in the equity market, only after next year mid i.e, mid 2009, we can see recovery coming in Indian Stock Market.
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News Update:-
Billionaire investor Warren Buffett said the nation has been hit with an "economic Pearl Harbor," and the government must respond quickly. "This really is an economic Pearl Harbor," Buffett said. "That sounds melodramatic, but I've never used that phrase before. And this really is one." Buffett said the nation's economic problems are already starting to be felt by furniture and jewelry stores such as the ones owned by Buffett's company, Berkshire Hathaway Inc.

The billionaire predicts that the rest of the "Main Street" economy will start to have problems if the government's financial bailout plan doesn't pass Congress soon.

"In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now," the 78-year-old Buffett said. The fear in the marketplace has allowed Buffett to make several sizable investments over the past month in proven companies that needed cash quickly. And Berkshire, which had $31.2 billion cash on hand at the end of June, was ready to invest because, Buffett says, he always tries to be greedy when others are fearful.

But Buffett said in an interview with CNBC Wednesday that if Congress doesn't approve the bailout plan soon, then "I will have done some dumb things." Buffett compared the U.S. economy to a top athlete who has suffered a sudden and severe heart attack. He said the proper response to such a heart attack is to use a defibrillator as soon as possible, not argue about the precise placement of the paddles or argue about whether the athlete should have taken blood pressure medication beforehand.

And Buffett said taxpayers will eventually turn a profit on the $700 billion plan if the bailout passes and the U.S. government buys mortgage debt at market prices. "We are not spending the money. If we buy these assets intelligently, the United States Treasury will make money," Buffett said.

"The recession is going to get worse," Buffett said. "I don't want to hold out false hopes that -- by some magic bullet -- that things will turn around in a couple months." Buffett has said for several months that the economy is in a recession because most Americans aren't doing as well today as before. The technical definition of a recession most economists use is two consecutive quarters of negative growth in the nation's gross domestic product.
-HBJ Capital Team