Buffett on CNBC: Economy fell off a cliff but will recover

Whether talking about the housing industry or the car industry, Warren Buffett's message on CNBC this morning was that the economy fell off a cliff, but it will recover. He placed the recovery between two to five years from now depending on industry. But, when asked where the DOW will be, he said, "I have no idea where they'll be at any time." He said he never tries to predict the level of the Dow. He also said, "I've never seen this level of fear before."

He added that "the world has changed in a way we haven't seen before." He believes, "Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen." From what he's seeing with his own companies, he said jewelry companies are struggling, while GEICO is doing well as people look to cut their insurance costs. He believes there is a scar on people's psyche about investing and that it will change the public's saving and investing habits for a long time. He thinks people need to "stay away from debt" unless they are sure they can handle it.