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other than the section that dealt with derivatives my fav part was this: <<Our long-avowed goal is to be the “buyer of choice” for businesses – particularly those built and owned by families. The way to achieve this goal is to deserve it. That means we must keep our promises; avoid leveraging up acquired businesses; grant unusual autonomy to our managers; and hold the purchased companies through thick and thin (though we prefer thick and thicker). Our record matches our rhetoric. Most buyers competing against us, however, follow a different path. For them, acquisitions are “merchandise.” Before the ink dries on their purchase contracts, these operators are contemplating “exit strategies.” We have a decided advantage, therefore, when we encounter sellers who truly care about the future of their businesses. Some years back our competitors were known as “leveraged-buyout operators.” But LBO became a bad name. So in Orwellian fashion, the buyout firms decided to change their moniker. What they did not change, though, were the essential ingredients of their previous operations, including their cherished fee structures and love of leverage. Their new label became “private equity,” a name that turns the facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure compared to that previously existing. A number of these acquirees, purchased only two to three years ago, are now in mortal danger because of the debt piled on them by their private-equity buyers. Much of the bank debt is selling below 70¢ on the dollar, and the public debt has taken a far greater beating. The privateequity firms, it should be noted, are not rushing in to inject the equity their wards now desperately need. Instead, they’re keeping their remaining funds very private. In the regulated utility field there are no large family-owned businesses. Here, Berkshire hopes to be the “buyer of choice” of regulators. It is they, rather than selling shareholders, who judge the fitness of purchasers when transactions are proposed.>> imo, private equity is exceedingly deserving of being called out as the rip-off artists that they are. yes, the PE operators come in & institute a "lean & mean" operating culture. but that is more than offset negatively by the peril they expose those co.'s to in the longer term by piling on massive debt appended to sliver thin equity structures. its a fools game that requires buoyant capital & credit markets & an ocean of emboldened greater fools to forward lateral it off to before the music stops. as for webs comments & analysis of his long dated derivatives sales, i wonder how doug kass & others belonging to the cramer club cadets corp will spin their absurd charges of (to paraphrase) "buffett suffers style drift" and "hypocritically embraces the same 'weapons of mass destruction' that he warned others about" type of arguments they have been scoring brownie points with in the news lately?

snip: <<Most investors (who are long-biased), and indeed the very U.S. stock market as a whole, are disadvantaged in a market dominated by momentum-based quant funds and by ultra bear ETFs, both of which prey on a weakening hedge fund industry riddled by redemptions and by a community of individual investors whose confidence is badly broken. These quant funds and ultra bear ETFs, which bypass Federal Reserve Regulation T margin rules governing the extension of credit by securities dealers and brokers in the U.S., wreak havoc in a market that needs all the regulatory support it can get. Today's investors no longer walk tall as they have seen their portfolios shrivel up. For several years, institutional and individual investors have been competing on an uneven playing field dominated by the powerful quant funds and ultra bear ETFs that not only have a disproportionate role in total NYSE trading but, more importantly, have had an undue influence on pushing stocks lower during the course of the bear market. The pages of RealMoney have included an extensive and effective discourse on the effect of the ultra bear ETFs on the market, so I won't spend much time repeating what others on the site have written. >> from doug kass. i still find much of what he says enlightening...except when he goes off on his "buffett has lost it" tangents, a subject which, as a TRADER, he is ill equiped to opine on with insight, imo. rest of the article here: http://www.thestreet.com/p/newsanalysis/investing/10466702.html

thnx for drawing my attn to this. i have finally glimpsed a little light at the end of the sears holdings tunnel & picked up a small position.

totally agree with you on jcf. i was a shareholder of his enstar group for a while a year and a half ago, thinking that here was an attractive insurance runoff biz rum by a highly regarded, smart private equity guy witha tremendous record behind him of outsized returns (ref his original shinsei coup). it soon became clear, tho, that this was a guy who benefited from the unprecedented boom in the credit markets, not from any investment acumen or operational wizardry...like most PE guys...which, after all, are really LBO guys dressed up in new clothes & going by a more socailly acceptable name. i bailed when he made his $60 a share bid for sallie may. the financing scheme was brilliant, but the investment rationale was suspect no matter how you cut it!

it does kinda feel that way to me too. but then practically the whole market feels that way, especially stocks of a financial persuasion. what's definately being subjected to a bear raid, imo, is buffett's reputation. i cant believe all the sniping & second guessing i'm seeing. cramer & kass from the street .com are especially piling on. its disgusting.

i'm pleased as punch too. i was especially interested to hear prem say in a recent interview someone posted here from the national post that he believed inflation was not a problem now but probably would be a year from now. and the big move by fairfax into munis 87% insured by berkshire is delicious!

<<F--ers deserve everything they have coming.>> raw, primal elegance...touche! couldnt agree more. the sec needs to put an end to illegal trading & market manipulation. period...exclaimation point!

i've been waiting for charlie to weigh in on this financial crisis with one of his blunt, politically incorrect zingers. i'll bet he is going to have a field day writing this years wesco annual report letter.

this stuff would be right at home in a robert ludlam novel...unbelievable! some of my fav parts: <<In an upcoming story, I will tell you more about Ladenburg Thalmann’s role in the naked short selling scandal. I will tell you more about Pond Securities and its relationship with a man who remains a fugitive in Austria. And I will tell you more about Carl Icahn, who is not only one of the most “prominent investors” in America, but also a man with a certain cachet. * * * * * * * * Another employee of Gruntal – a fellow who sat next to Steve Cohen (later known as “the most powerful trader on the Street”) – was Stephen Feinberg, who had moved to Gruntal from Michael Milken’s operation at Drexel Burnham Lambert. Feinberg had been one of Milken’s most favored employees. Most likely, he moved to Gruntal (“the “shabby side of the Street,” as Fortune magazine described it) to reinforce the relationship between Gruntal and Milken’s nation-wide stock manipulation network. Nowadays, Feinberg runs Cerebus Capital, one of the most powerful private equity firms in America. In an upcoming story, I will tell you how Cerebus loots the companies it seizes. Its techniques have a certain cachet.>> i cant wait for the upcoming stories that expound more on certain "techiniques have(ing) a certain cachet", especially among some of the so called prominent private equity & activist investors like icahn & feinberg.

this is fantastic. what an auspicious start to the corner of berkshire & fairfax (perhaps soon to be the corner of berkshire, faifax, & western?).

its feeling like home already here. nice work, sanjeev. but is there ant way to choose between a sequential & a threaded view?