The US is already in a recession and it will be longer as well as deeper than many people expect, US investor Warren Buffett said. Warren Buffett said the economy is still in a recession and unlikely to improve before 2009 but that stocks appear better valued than a year ago.

He said in an interview the US was “already in recession” and added: “Perhaps not in the sense that economists would define it” with two consecutive quarters of negative growth. “But the people are already feeling the effects,” said Buffett, the world’s richest man. “It will be deeper and last longer than many think.”

“You always find out who’s been swimming naked when the tide goes out. We found out that Wall Street has been kind of a nudist beach,” said Buffett, who in March was called the world’s richest person by Forbes magazine.

But that is just part of a market system. And you know, if I had to pick the chances that we are going into a recession, I would say they are fairly significant, but I don’t know anything that you don’t know.

However he said that won’t stop him from investing in selected companies and said he remained interested in well-managed German family-owned companies.

“If the world were falling apart I’d still invest in companies,” he said.

Well, historically they’ve always said that if we get a cold, the rest of the world gets pneumonia or something. But, we are still very important in the U.S., and we are still very linked in many ways. But we aren’t as important as we used to be relative to the rest of the world.

Buffett also renewed his criticism of derivatives trading. “It’s not right that hundreds of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets even though the sectors are actually in good health.”

Buffett complained about the lack of effective controls. “That’s the problem,” he said. “You can’t steer it, you can’t regulate it anymore. You can’t get the genie back in the bottle.”

Buffett earlier said anyone found responsible for wrongdoing should leave ratings group Moody’s, in which his investment company Berkshire Hathaway owns some 20 per cent.

In terms of pure economics, you know, our children will live better than we live, our grandchildren will live better than our children. There is economic progress. Mankind has not used up its potential yet and we find ways to become more and more productive, turn out more and more goods and services that people want. So I’m a bull long-term on mankind’s possibilities.