Parsad

Carol Loomis covers the debt donation: http://finance.fortune.cnn.com/2012/01/18/warren-buffett-scott-rigell-match/?section=magazines_fortune Cheers!

Yup! And existing cash flows are already enough to cover legal expenses and legacy loan losses. They've reduced exposure to Europe...so really their business will be determined by how the U.S. economy behaves and the housing market here. Cheers!

You are correct Eric. They are mutually exclusive. The $5B in cuts is coming from just normal operating cuts at various levels...nothing to do with the separate legacy costs associated with the loan portfolios. The $11B number would be correct, and you should see cuts on both ends showing up quarter after quarter. As I said...lean and mean! You will have a business focused solely on core banking, running efficiently, with a solid balance sheet and a constantly improving loan portfolio. They'll be smaller than JPM and WFC long-term, but run as efficiently and as strong...if not stronger. This will be one of the greatest turnarounds in the financial industry once Moynihan is done...he managed to save the Titantic! Cheers!

Good article in Forbes. Cheers! http://www.forbes.com/sites/toddwoody/2012/01/19/warren-buffetts-long-quest-to-build-a-geothermal-power-plant/?partner=yahootix

Article in Investopedia about Fairfax. Cheers! http://stocks.investopedia.com/stock-analysis/2012/Fairfax-Financial-No-Stone-Goes-Unturned-FFH.TO-BRK-A-L-MKL-A0119.aspx?partner=YahooSA#axzz1jwZhGycA

Flat, but better than last week. Cheers! http://www.bloomberg.com/news/2012-01-19/north-american-rail-freight-carloads-for-jan-14-table-.html?cmpid=yhoo

Good article! Cheers!

Room for improvement of course, but I like the trend in all departments. Primarily stabilization in real estate loan losses and provisions, and overall their loan loss provisions are showing nice drops. We still have to see the impact from the $5B in operating costs that will be eliminated over the next couple of years...this thing is going to get lean and mean. I still see it hitting tangible common equity per share sometime in 2012...so the $12+ range per share. Based on their legacy loan portfolio, I would prefer if they used capital to increase Tier 1 common equity further, rather than distribute it in dividends. Some cash spent on share buybacks would be fine with me. Cheers!

I don't remember the quotes you referred to Carl, but I have on numerous occasions adjusted my views on LVLT primarily to ease the burden on a friend who has an ungodly sum tied up in LVLT...whenever emailed. ;D We've never owned LVLT in our personal, corporate or fund accounts other than some call options we owned briefly in 2008, lost money on, and sold. Batting 0% in actuality! My friend is batting 0% too! Cheers!

Level 3 has done nothing but grow the intrinsic value of the business. It is Mr. Market who has been so destructive on incorrectly placing a price on the worth of the business. Intrinsic value is all the cash that can be taken out of a business over its life and discounted back to the present. Take a look at the chart below and is cash coming out of LVLT or being sucked in by LVLT? http://financials.morningstar.com/ratios/r.html?t=LVLT&region=USA&culture=en-US Building the most advanced IP fiber optic network in the world is no easy task. Now the next stage is to deliver the content or goods, by hooking up the ends. The Super Bowl streamed live online is a prime example. Live streaming HD video over the Internet will bring in the big bucks. Probably, but is it enough to compensate for the annual capital costs required to build out and maintain the network, as well as pay back all of the debt the company has and will continue to accumulate? I have no idea, and I don't think you know either, and I'm pretty sure the executives at LVLT aren't sure as well. Why does FAIRFAX FINANCIAL HOLDINGS LTD/ CAN hold so many shares of Level 3 Communications? They own the debt too, so they've hedged their bets. If the company goes under, they get part of the network. If the company succeeds, they get their notes paid off and their shares go up. In the meantime, they've enjoyed and continue to enjoy some pretty nice interest payable on those notes. The worst thing that will happen to Fairfax is that they will break even over the years. The worst thing for just equity owners is they could get completely wiped out. Cheers!

Incidentally, I used the term "value trap" in the conventional sense. Personally, I don't think there is such a thing, only poorly run businesses. And LVLT is one of the worst as far as destruction of shareholder capital, and keeping their shareholders waiting in anticipation of that day where critical mass occurs. Cheers!

since it's been 14 years of no ROI, and you say it could be 10 years; but ROI is coming. that's some opportunity cost. 24 years? Yup! But at least there is some possibility of a return. One of the biggest value traps of the last 30 years. Cheers!

AT&T is jacking up data rates. They say that the boom in wireless usage...growing at 40% a year...is responsible. I'm sure there is an opportunity cost for some long-time LVLT shareholders, but it is very likely that within the next ten years, this sucker may start to make some real money...for its shareholders and not just Fairfax! ;D Cheers! http://finance.yahoo.com/news/t-jacks-data-plan-prices-233528599.html;_ylt=AhnvQ3HkHqxukOMT6ZRvxOSiuYdG;_ylu=X3oDMTQzODhpcjV1BG1pdANGaW5hbmNlIEZQIEp1bWJvdHJvbiBMaXRlBHBrZwM3Y2YzMTQ0Ny05MDY2LTM5OTgtODE4Yi1kN2VmZWE5Y2Y4MjgEcG9zAzEEc2VjA2p1bWJvdHJvbgR2ZXIDYzExMWYwNjAtNDIyZi0xMWUxLWJkZWMtMDc3ZGJkOGExZDZh;_ylg=X3oDMTFvdnRqYzJoBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3

Virginia representative Scott Ringell has been donating 15% of his congressional salary to pay down the national debt for the last two years, and Buffett has matched it. Buffett contacted Ringell and was delighted that the representative was already doing this before Buffett's challenge. Ringell has an invite to come to Omaha. Cheers! http://finance.yahoo.com/news/-Impressed-Delighted-Warren-cnbc-3066968483.html?x=0

Government is close to a deal with banks to writedown the principal on nearly a million mortgages! Cheers! http://finance.yahoo.com/news/donovan-very-close-foreclosure-deal-172113197.html;_ylt=AnIyAMAzrjv7mBfRIsFgPIWiuYdG;_ylu=X3oDMTQ0cGphMDQ1BG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yeSBSaWdodARwa2cDZDEzZGJjNDUtMTgzMC0zYmQ5LTg2N2MtYTI2ODQ4NWRkNjE3BHBvcwMxBHNlYwN0b3Bfc3RvcnkEdmVyA2YwNDJlZjkwLTQxZmYtMTFlMS1iZmZmLTMzNTRjYzY4NWIwOA--;_ylg=X3oDMTFvdnRqYzJoBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3

Going to be very hard to nail SAC. Too smart, too deep pockets, and the tentacles cannot be tracked back to SAC. Cheers!

He took a hint! ;D Cheers!

Regular annual stress tests will be required for large banks. Good move by the FDIC. Cheers! http://online.wsj.com/article/SB10001424052970204555904577166721385547642.html

I think most of us knew this well before Fitch stated it. I expect it to be orderly as well. Barring any last minute agreements or plans, default or some sort of agreement with creditors (still technically a default) is inevitable. Cheers! http://www.cnbc.com/id/46021999

Incidentally, for those haven't seen the "Monkey Boy" video (like myself), here it is...not impressive stuff! http://www.youtube.com/watch?v=wvsboPUjrGc This guy may need a handler! Cheers!

Even if he paid under another name, I would get security (other Fairfax shareholders circa 2003-2006) to throw him out! ;D Actually, I wouldn't toss him out. I would sit him on the same table as myself, Uccmal, Cardboard, LessthanIV, JamesEast, et al, and let him squirm a bit. Cheers!

I did for quite a while...I wore a Western Sizzlin hat...then a Friendly's hat...finally a Steak'n Shake hat. I stopped at wearing a Biglari Holdings hat, once the CEO took 25% of the long-term intrinsic value away from me. As such, the only hats I continue to wear are Fairfax and Berkshire, and the CEO's would never dare dream, let alone actually do, the same thing. Cheers!

No, but Steak'n Shake got a huge bit of advertising by Letterman in tonight's show. They did about a 8-10 minute segment on Steak'n Shake with Letterman telling a story about Steak'n Shake and his youth, how the new owners bought Friendly's then sold it, and now he thinks Tony Danza owns it! Very, very funny! The cameras then went into the restaurant and Letterman chatted with the staff, and ordered his burger exactly how he wanted it. It will probably become one of the busiest restaurants in the entire chain. Cheers!

Wonderful picture of Buffett on the cover of Time: http://www.time.com/time/covers/0,16641,20120123,00.html You read the article here if you are a subscriber (with another nice photograph of Buffett)...I'll be buying a copy instead! Cheers! http://www.time.com/time/magazine/article/0,9171,2104309,00.html

Any long-term boardmember here and shareholder of Fairfax knows of Fabrice Taylor. Taylor wrote a few articles in the Globe & Mail about Fairfax back in the day, that pretty much mimicked the articles written by Peter Eavis for the Street.com. Both journalists in their articles sounded eerily like John Hempton (who was working for Platinum Asset Management at the time) and John Gwynn (who worked for Morgan Keegan). Eavis wrote some 80 articles over a year and a half, and then disappeared to start a tax shelter...err...church in New York. Hempton left or was dismissed from Platinum, went somewhere else, and then started the blog, Bronte Capital. Gwynn was terminated from Morgan Keegan for distributing his research on Fairfax Financial to Kynikos and SAC Capital before publication, and died after being sued by Fairfax...I don't know anyone who ever found out how he died. Eventually, Fabrice Taylor left the Globe & Mail to start a new venture...the reinvigoration of "Frank" magazine...which was going to expose the seedy underbelly of Bay Street (Toronto's Wall Street). Taylor who held himself to the highest standards of disclosure and ethics, was funded by private investors associated or familiar with Bay Street, yet he refused to disclose exactly who was funding him. Regardless, with his trusty CFA designation, his steely analytical mind, deep pockets of his investors, and the network of contacts he coveted, he ended up running "Frank" into the ground in about nine months! An ignominious end to another Fairfax antagonist...so I thought! Taylor eventually crawled back out from under his rock and began writing for the Globe & Mail again. Now his newest venture, in coordination with The Globe, is "The President's Club" Investment Letter. I know, I know...already all of you are getting goosebumps from just the title alone..."The President's Club". You've always wanted to be a member of a club, and you've always wanted to do better with your investments, now you can have both! And all for $99 + tax. Or you could join the "Premium" club, but you'll have to contact them directly to see how much the shake-down...err...newsletter costs. https://www.thepresidentsclub.ca/ Cheers!