And people believe what he is saying now, I have no clue why cnbc continues to interview him at least 20 times a month, why does anyone listen to him, so he made his billions and thats, that. This was what he thought about subprime in 2007, of course the guy was totallllly wrong, however today when he speaks people still think he knows what he is talking about, especially when he says no double dip recession and an improving residential housing market. If asked a year ago if we were going into a recession he would have yelled out NO..... Subprime crisis not big threat: Buffett But housing slowdown hurting some Berkshire businesses, chairman says By Alistair Barr, MarketWatch OMAHA, Neb. (MarketWatch) - Rising delinquencies and defaults in the subprime mortgage business probably won't be a big threat to the U.S. economy, Warren Buffett said on Saturday. Still, the Berkshire Hathaway chairman said some of the company's construction-related businesses are being hit by the slowdown in home building, and that could continue "for quite a while." House prices fell at their fastest pace in 13 years in February, according to the S&P/Case-Shiller home price index, which was released in late April. The slowdown, combined with an increase in interest rates in recent years, has triggered turmoil in the subprime mortgage business, which lends to poorer home buyers with blemished credit records. Borrowers and lenders in the subprime mortgage business were betting that house prices would go up in future, Buffett said. Now that delinquencies and foreclosures are increasing there's extra supply of homes for sale, which changes the dynamics of the real estate market, he explained. "You'll see plenty of misery in that field. You've already seen some," Buffett said. "I don't seen a big impact on the economy though." 'You'll see plenty of misery in that field. You've already seen some. I don't seen a big impact on the economy though.' Warren Buffett The situation has been exacerbated by securization, in which the loans are packaged up and sold on again to investors as mortgage-backed securities, he added. "Once you package those things and sell them through major investment banks, discipline leaves the system," Buffett said. Subprime borrowers have been missing their first and second monthly payments recently, he noted. "That shouldn't happen. Securitization has made the problem worse," he added. Legislators have been discussing possible new regulations to deal with the crisis, including making investors in mortgage-backed securities more responsible for future delinquencies. The subprime shakeout probably isn't going to cause big trouble for the economy, but in certain areas of the country, the real estate market will take longer to recover, Buffett said. Berkshire owns one of the largest networks of real estate agencies in the U.S. and several construction-related businesses, including carpet maker Shaw Industries and building products companies Acme Building Brands, Benjamin Moore, Johns Manville and MiTek. Shaw revenue fell 11% in the first quarter. Sales and profit are likely to be "significantly" lower for the rest of 2007, Berkshire warned on Friday.