Warren Buffett on Cancer Diagnosis, Succession Plans, Economy & Housing Recovery - CNBC 2012 Interview

First interview since Buffett announced stage one prostate cancer diagnosis. At 81 years old, Buffett reports feeling no different with no change in energy level. Describes it as 'the time to get it' at his age. Shareholders have sent lots of mail, typically saying 'welcome to the club,' showing many have dealt with similar diagnosis.

Cancer diagnosis sparked interest in Buffett articulating succession plan. AFL-CIO presenting Saturday proposal pressing him to detail who will take over. Buffett deflects by asking who will succeed the president of the AFL-CIO. Points out he doesn't know next CEO at Exxon Mobil, Apple, American Express, Coca-Cola, Wells Fargo - emphasizes that's the board's job to take care of succession planning.

Berkshire has 70+ operating businesses as proxy for economy. Last year all did well except residential construction. This year all are doing well. Named five largest companies outside insurance (not in home construction) - all doing better than last year and will stay that way. Housing market has ticked up but 'very very very slightly.' Acknowledges incorrect prediction from year ago about housing recovery.

Buffett sees danger that Fed keeping rates way too low, setting up major inflation down the road. Says it's 'fairly likely' but doesn't know exactly when it takes off. Key insight: 'If you could keep rates at this level and pour money into the economy and there were no side effects, we'd have been doing it a long time ago. There are side effects but they're delayed.' Defends Fed's crisis response: saw country in free fall three and a half years ago, had to act big, convince public they had will and ability to step in when nobody else was. When whole world was deleveraging, somebody had to leverage up - only Fed could do it.

Investors titillated that Buffett finally bought tech stocks IBM and Intel. Reveals it was his idea: 'If it doesn't work out we'll say it was Charles.' New investment managers Ted Weschler and Todd Combs did not know he was buying until he was way into it. Even Charlie Munger didn't know until halfway through. Emphasizes complete independence: 'I don't talk to Ted and Todd about what I'm buying or selling or what they're buying or selling. We all go our own way on that.'

Year ago Buffett and Munger predicted Donald Trump would not be next president - proven correct. Now down to Obama vs Romney. Buffett thinks Obama is favorite but will depend very much on economy in three months prior to November. If economy starts getting worse, it hurts Obama a lot. Says president will get credit or blame for whichever direction economy goes - 'that's just the way American people will react.' Everything he sees says economy more likely to be improving but cautious. Still supports Obama 100%.

Facebook about to steal Berkshire thunder with IPO pricing. Don Graham of Washington Post (Buffett's friend) sitting on Facebook board. Asked if he'd buy Facebook stock, Buffett jokes: 'I kind of mentioned quite a ways out to buy IBM. My Facebook would be - my doctor would require a checkup then.' Clear indication he has zero interest in Facebook stock, considers buying IBM already a major stretch into technology.

Last year big story was David Sokol of MidAmerican Energy resignation with questions about his behavior that affected Buffett and Munger deeply. Buffett reveals no development on SEC investigation he knows of. Last time he talked to SEC was June 2011 - informal, no oaths, not recorded, just Q&A. That's the last he's heard. However, Berkshire is paying significant legal fees every month in range of $150,000-$200,000 to Sokol's lawyers until there's final adjudication if there is one.