Warren Buffet - S&P made a mistake !

Billionaire Warren Buffett said Standard & Poor’s (S&P) erred when it lowered the US credit rating and reiterated his view that the economy will avoid its second recession in three years.

The US, which was cut August 5 to AA+ from AAA at S&P, merits a “quadruple A” rating, Buffett, 80, said yesterday in an interview with Betty Liu at Bloomberg Television. The downgrade followed the biggest weekly selloff in US stocks in 32 months, with the S&P 500 slumping 7.2 per cent to its lowest level since November.

“Financial markets create their own dynamics, but I don’t think we’re facing a double dip recession,” said Buffett, chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc. “Clearly what stock markets do have is an effect on confidence, and this selloff can create a lack of confidence.”

Stocks plunged last week amid signs the US economy is slowing and speculation that Europe will fail to contain its sovereign-debt crisis. Reports on manufacturing and consumer spending trailed economists’ forecasts. Euro region central bank governors are planning emergency talks aimed at limiting the market fallout from the first US rating downgrade in history.

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