In the following interview, Warren Buffett makes two key points:

  • First, he tells CNBC’s Becky Quick that the current crisis in Europe amounts to a very large bank run. The only way to stop such a run is to assure the investing public that the powers that be are both capable and willing to do whatever it takes to keep the banks solvent. As of today, that’s not quite happening. Thus the spread of PIIGS yields over German yields continue to widen.
  • Second, currently the US economy is clearly bifurcated. Housing and related industries are in a “depression.” Everything unrelated to residential real estate, however, is doing very well. Buffett illustrates the point by revealing that Berkshire’s five largest companies outside of insurance, which represent a broad array of industries, will all turn in record earnings for 2011. Once housing recovers the economy will perform very strongly and jobs will come roaring back.

Hat tip, Pragmatic Capitalism

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