Zorrofan

Credit continues to contract so is the economy getting better or is this a pause before the next leg down? It seems to me that Koo called it correctly - we are in a balance sheet recession until consumers deleverage, a process no where complete. As long as FFH has strong liquidity there should be some interesting opportunities ahead for Prem et al! http://www.telegraph.co.uk/finance/economics/7259323/US-bank-lending-falls-at-fastest-rate-in-history.html cheers Zorro

Just a guess but he may favour that approach because stimulus spending creates jobs if done correctly - thats why the GDP doesn't shrink. Straight tax cuts might be faster but they may also result in greater short-term pain, i.e. jobs are lost as the GDP shrinks, so this might be more political than anyhthing else....I also want to say thanks to txlaw for the start of a great discussion! cheers Zorro

thanks printing to PDF should do the trick.

Is there anyway of downloading the presentation as a PDF? thanks Zorro

I don't really consider myself a bear, mainly because I think things will get better. But while many can argue things are recovering it's my belief that with high unemployment, consumer debt at all time highs, a weak housing market etc etc, people are just getting ahead of themselves. Eric Sprott had a great comment about celebrating the 26th consecutive month of job losses simply because they were lower. The deleveraging process will take longer than the market seems to think. Here is a link to an interesting article on the deleveraging process, an arguement for a long period of slow economic growth while the deleveraging takes place..... http://www.ft.com/cms/s/0/1a646218-0175-11df-8c54-00144feabdc0.html?nclick_check=1 cheers Zorro

Hi Sanj, I totally agree with you. I shudder to imagine how bad it would be with out government support. I just think many are too optomistic about the strength of the recovery. As you said, can the economy stand on its own two feet without government support? Should be interesting going forward... Cheers Zorro

Came across some interesting stats from the Department of labour..... The advance number of actual initial claims under state programs, unadjusted, totaled 801,086 in the week ending Jan. 9, an increase of 156,165 from the previous week. There were 956,791 initial claims in the comparable week in 2009. The advance unadjusted insured unemployment rate was 4.6 percent during the week ending Jan. 2, an increase of 0.4 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,988,940, an increase of 503,924 from the preceding week. A year earlier, the rate was 4.4 percent and the volume was 5,855,855. Extended benefits were available in Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, and Wisconsin during the week ending Dec. 26. Initial claims for UI benefits by former Federal civilian employees totaled 1,466 in the week ending Jan. 2, a decrease of 187 from the prior week. There were 1,454 initial claims by newly discharged veterans, an increase of 73 from the preceding week. There were 25,959 former Federal civilian employees claiming UI benefits for the week ending Dec. 26, an increase of 193 from the previous week. Newly discharged veterans claiming benefits totaled 36,116, an increase of 1,742 from the prior week. States reported 5,002,180 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending Dec. 26, a decrease of 141,279 from the prior week. There were 1,666,412 claimants in the comparable week in 2008. EUC weekly claims include first, second, third, and fourth tier activity. The highest insured unemployment rates in the week ending Dec. 26 were in Alaska (7.4 percent), Oregon (6.6), Idaho (6.2), Wisconsin (6.2), Michigan (5.9), Montana (5.7), Nevada (5.7), North Carolina (5.6), Pennsylvania (5.5), and Washington (5.4). The largest increases in initial claims for the week ending Jan. 2 were in New York (+22,810), North Carolina (+20,942), Georgia (+11,172), Wisconsin (+9,938), and Alabama (+5,748), while the largest decreases were in Illinois (-6,928), Florida (-6,523), Kansas (-3,701), Maryland (-2,309), and California (-2,284). Also some stats on foreclosures... http://money.cnn.com/2010/01/14/real_estate/record_foreclosure_year/index.htm Makes one wonder.... cheers Zorro

Anything new on FFH's lawsuit and how things are proceeding? Just curious as to when I can add that $6 billion to my book value calculations! :D cheers Zorro

Always an interesting read........... http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2010/Let%E2%80%99s+Get+Fisical+January+2010.htm cheers Zorro

You are looking at the short-term! WEB is not going to be around forever. I am more worried about preserving what WEB has built than short-term fluctuations in the share price. Even with WEB at the helm there are times when BRK trades at a discount. Do you want some hedge fund coming along and tearing BRK apart , selling off the pieces for short-term gains? If you do, you don't understand in the least what BRK is about. That would be very stupid all things considered. Warren Buffett is the best capital allocator in the world, if you want a dividend sell 5 % of your shares. Enjoy Berkshire trading at a discount, it won't last forever and it has nothing to do with Gates selling shares.

Personally, I think the best solution is for BRK to declare a dividend, I believe it would need to be around 5%, and for Gates not to sell any shares but use the dividends instead. Having Gate's charitable foundation holding WEB shares could help ensure that BRK maintains its "culture" well into the future. Cheers Zorro

My preference would have been for the Gates foundation to hold the shares, thus ensuring the "BRK Culture" is not swayed in the future, and have BRK pay a small dividend to meet the legal requirements of the foundation. I believe WEB was going to originally have a foundation set up and pay out something like a 5% dividend. cheers Zorro

i thought it was "a fool and his money, they shall party"? ;D cheers Zorro

While the shorts did attack Prem, accusing him of all sorts of absurb things, the shorts allegations were found to be false. The SEC investigation into FFH found nothing. Ultimately Prem maintained his reputation for honesty and integrity. This seems to be a big difference to me..... cheers Zorro

One symptom of the cheap money coming to an end may be the rising yields on longer-term T-bills. If the federal government is having troubling rolling over debt already this would explain why rates are higher even though there is not yet a clear sign of inflation. The steep yield curve is a sign of harder debt refinancing not a strong recovery as some economists may be predicitng..... cheers Zorro

How about gold....Eric sprott is always an interesting read, whether you agree with him or not.... http://www.sprott.com/Docs/Reports/tripleA_Asset.pdf cheers Zorro

Merry Christmas to all!

The government has to refinance $2.5 Trillion next year, plus fund $10 trillion in deficit spending over the next ten years. If the dollar is still going to be a safe haven with all that, what the heck is the rest of the world going to face? cheers Zorro

At the risk of being labelled a "bear" here are a few more links...... http://ems.gluskinsheff.net/ http://www.reuters.com/article/idUSN1419042320091214 http://www.bloomberg.com/apps/news?pid=20601103&sid=aBMXN4DFRge4 http://ems.gluskinsheff.net/ I can't help but feel that the "Great Recession" is not over. It may even be why FFH is taking money off the table (example selling H & R warrents), putting some hedges in place.....food for thought Cheers Zorro

Cheaper to buy reserves than find them on your own? I have a feeling that this is the start of some consolidation in the energy sector.... cheers Zorro

It was mentioned in an interview done with Bruce recently. The interview mentioned that Fairholme had started buying BRK again as well. I will try and find the link to the article..... cheers Zorro

Interesting to note that while Fairholme has started buying LUK once again, insiders seem to be selling! Any thoughts on why? Estate planning, charitable donation..... http://finance.yahoo.com/q/it?s=LUK cheers Zorro

SD, twacowfca, uccmal et al thanks for the advice! Uccmal, if I might enquire, why June puts instead of something longer dated? Is it just cost or are you anticipating a correction sooner than later? cheers Zorro

If you wanted to protect your portfolio from a potential correction are you better off buying S & P LEAP Puts, a leveraged ETF that bets on the market correcting, or just out of the money puts? I ask as I am not familiar with options at all and I am more worried about protecting my portfolio than guessing what the next bubble is.... thanks Zorro

Great interview - thanks for posting it Sanj! cheers Zorro