May 19 (Bloomberg) -- Billionaire Warren Buffett said the U.S. economy is less than halfway through a credit crisis that already sent home foreclosures to a record and sparked the collapse of Wall Street's fifth-largest securities firm.

``I don't necessarily think we're halfway through or necessarily a quarter of the way through the effects throughout the general economy,'' Buffett, 77, told reporters today in Frankfurt, Germany. ``The initial effects are felt by the people who really did the silliest things, but you can have a whole bunch of domino-type effects that eventually can get to people who are doing fairly sound things.''

The worst housing slump in a quarter century sank the mortgage securities market. Banks and securities firms worldwide amassed $344 billion of writedowns and credit losses, and at least $35 billion of additional writedowns included in their balance sheets weren't deducted from reported earnings, regulatory filings show.

The danger of multiple investment bank failures probably ended when the Federal Reserve orchestrated the takeover of Bear Stearns Cos. by JPMorgan Chase & Co., said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc. Yet the damage to the economy and individuals will keep mounting, he said.

``In my judgment, there's a good chance that most of that is not over,'' said Buffett, who's on the first leg of a four- day European tour to meet owners of family-run businesses that may someday be inclined to sell to Berkshire.

China, Israel

Buffett, 77, built Berkshire into a $200 billion investment and holding company, buying companies whose management they trusted and whose business models they deemed superior. Buffett owns about a third of the shares, making him the world's wealthiest man, according to Forbes magazine.

With about $35 billion in cash to help pay for a purchase, Buffett has complained he can't find anything big enough in the U.S. to have an impact on Berkshire. He has been investing in China, Israel and the U.K. to spur profit growth.

The tour is scheduled to take Buffett to Lausanne tomorrow, Madrid on May 21, and to Milan on May 22.

To contact the reporter on this story: Josh P. Hamilton in Omaha at jphamilton@bloomberg.net.

Last Updated: May 19, 2008 11:58 EDT