WARREN BUFFET PREPARES HIS EXIT

WARREN Buffett has given the most extensive comments to date about the future of Berkshire Hathaway Inc after he is gone, saying he still expects the conglomerate to be a partner of choice for distressed companies.

Buffett, 82, also defended his plan to install his son, Howard, who has little investing experience, as non-executive chairman, saying the younger man's role would be to ensure that Berkshire had the right CEO in place.

During the financial crisis and its immediate aftermath, Berkshire helped prop up a number of companies, among them blue chips such as General Electric and Goldman Sachs. Buffett's investments were viewed by many shareholders as a seal of approval from one of the world's most respected businessmen.

Short-seller Doug Kass, invited by Buffett to Berkshire's annual meeting on Saturday to offer contrarian points of view, asked whether a successor would have the same heft. Buffett said it would not matter.

"Berkshire is the 800 number when there is really some panic in the markets, and people really need significant capital," Buffett said.

"If you come to a day when the Dow has fallen 1,000 points a day for a few days and the tide has gone out and you find some naked swimmers, those naked swimmers ... will call Berkshire," he added.

Whoever ultimately takes over Berkshire will run a conglomerate that employs more than 280,000 people in dozens of businesses worldwide, covering everything from ice cream to insurance and retail to railroads.

Kass later asked what qualified Howard Buffett, a 58-year-old farmer and philanthropist, to step in as Berkshire's non-executive chairman when his father is gone. The elder Buffett insisted his son was ideal for the task at hand.

"He has no illusions at all of running the business. He won't get paid for running the business," Warren Buffett said. "He'll only have to think about whether the board ... needs to change the CEO."

As in the past, Buffett talked about his successor as CEO without actually identifying him. Speculation usually focuses on a small group of top Berkshire executives, among them insurance boss Ajit Jain and railroad leader Matt Rose.

One long-time Buffett-watcher said the legendary investor seemed to handle the pressure from Kass and others well.

"Buffett hasn't broken much new ground, but he's handled Doug's question well ... and, as always, reinforced the Berkshire culture every chance he's had," said Jeff Matthews, founder of hedge fund Ram Partners LP and a Buffett biographer.

Berkshire's breadth means that its performance is seen as a barometer for the broader economy. On Saturday, Buffett said he still stands by the actions taken by the US Federal Reserve to stimulate the economy, even as he cautioned that the program could be "very inflationary."

"This is like watching a good movie, and I do not know the end," he said. "We have benefited significantly, and the country has benefited significantly, by what the Fed has done."

Buffett also endorsed the last four years of deficit spending by US President Barack Obama's administration, saying it is a problem to get off that program but much less of a problem than if the government had followed a strict austerity program instead.

"We are seeing some recovery in housing prices which has psychological effects," he said. By the next annual meeting, "I think we will have moved forward ... I don't think there will be a surge of any sort, but I don't think we will stall."