Buffett sees uneven recovery, craves big deals

NEW YORK (Reuters) - Billionaire Warren Buffett said he is optimistic about U.S. economic prospects, despite an uneven recovery that mirrors the fortunes of businesses at his company, Berkshire Hathaway Inc.

Buffett also said that despite his "enormous respect" for the efforts of Federal Reserve Chairman Ben Bernanke to move the economy forward, more stimulus is not the answer now.

"In the end, I don't think we need more of that," Buffett said in an interview on CNBC television on Wednesday.

Buffett said he remains on the prowl for a big acquisition, having lost a sizable one in the last day or two, but there is not a "high probability" of one soon.

Improvements in the business environment are likely in future months to be reflected by a decline in the U.S. unemployment rate, probably to the low 7 percent range by the November 2012 elections from 9 percent now, Buffett said.

Activity is probably "inching" ahead in most businesses at Berkshire and in much of the economy, while others are "moving forward" and others are "stuck," he said.

Housing remains a problem, and Buffett said it might take a year to have "sopped up the excess supply" of homes.

In contrast, Buffett said Tuesday's purchase by Berkshire's NetJets unit of up to 120 aircraft from Canada's Bombardier Inc for a potential $6.7 billion based on list prices reflected an expectation that demand for luxury business travel will grow.

"There is a resiliency to the American system," he said. "It does work. It sputters from time to time, it will sputter from time to time, but you don't want to get worried."

Buffett nonetheless said the U.S. dollar will "become less important over time" as other economies grow faster.

ELEPHANTS AND A FLEETING ZEBRA

Over the weekend, Omaha, Nebraska-based Berkshire said in its annual report that full-year profit had increased 61 percent to $13 billion.

Sitting on $38.2 billion of cash, Berkshire is eager for large acquisitions, which Buffett calls "elephants."

But Buffett said they were hard to find, including the sizable acquisition -- a "zebra" -- that fell through.

"There aren't many elephants out there, and not all of the elephants want to be in my zoo," he said. "It's going to be rare that we find something in the tens of billions of dollars where I understand the business, where the management wants to join Berkshire, where the price makes the deal feasible."

It is "rational to worry" that Middle East unrest could result in wider oil supply disruptions, Buffett said, although he is not now concerned about the impact on Berkshire.

He also maintained that stocks are a better investment over the long term than bonds, saying "it's a terrible mistake to buy into fixed-dollar investments" at current rates.

Buffett expressed comfort with many Berkshire stock investments, including its second-largest, Wells Fargo & Co, whose chief financial officer, Howard Atkins, departed suddenly last month.

While Buffett said Wells Fargo could have done a better job handling Atkins' departure, "it has nothing to do with the financials."

Buffett said he spent four hours on Saturday reading the bank's annual report. "I feel very good about the whole Wells operations," he said.

Berkshire Class A shares closed Tuesday at $128,050. A day earlier, they had reached a 52-week high of $131,463.

(Reporting by Ben Berkowitz and Jonathan Stempel in New York; Editing by Derek Caney and Lisa Von Ahn)