Washington, Sept 25 : Billionaire investor Warren Buffett has described the current Wall Street meltdown as an “economic Pearl Harbour”, requiring immediate action of lawmakers.

Amid growing rancour over the terms of a 700 billion dollar bailout for the American financial system, Buffett said the panic of last week would "look like Nirvana" if the legislation is not passed.

According to the Independent, his comments came a day after he paid five billion dollars (2.7 billion pounds) for a stake in Goldman Sachs, the banking giant, in what he described as a bet that politicians would indeed act to repair.

Federal Reserve Chairman Ben Bernanke, on the second day of testimony in front of sceptical lawmakers in Capitol Hill, pleaded with them not to attach punishing conditions on the participation in the bailout, which allows the Treasury to buy toxic mortgage assets that are clogging up bank balance sheets.

One Congressman questioned whether the bailout is necessary, since Buffett''s purchase suggested that confidence is returning.

Meanwhile, the Democrats are also pushing for the government to take equity stakes in companies that receive assistance, and some have suggested that the 700 billion dollar should be released in increments.

Since the downturn in the housing market, the value of trillions of dollars of mortgage-related derivatives has collapsed, and their ultimate value now rests on where house prices settle and how widespread th foreclosures become.

The latest data on the sale of existing homes shows 10.7 per cent fewer transactions in August than a year ago, at an average price down of 9.5 per cent.

Bernanke, in his testimony to the Joint Economic Committee of Congress, highlighted the bleakest outlook yet of the US economy and warned that it could get even worse if the bailout is not successful. (ANI)