President Bush insists the US economy is in a “downturn,” but legendary investor Warren Buffett warned today that the US is in a recession — one that will be more severe than most people expect.

“This will not be short and shallow,” said Buffett on CNBC. “I think consumers are feeling gas and food prices and not feeling they’ve got a lot of money for other things.”

Speaking about the ongoing US credit crisis, Buffett said: “I think there will be rippling secondary, tertiary effects …

The housing crisis continues to drag on and drag down the US economy. This piece from Reuters says it all:

A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it “a mistake” to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments.