The Real Deal

Buffett's Burlington Buy Is Really a Bet on China

Of course he is betting on China. But it has nothing to do with China's commodity exports.

1) First he stocks a large chunk of his money in hard assets like BNSF to protect it from dollar devaluation. Commodities are already locked up by other 'investors', and volatility a bit high for the Oracle taste. This is the preservation move.
2) Next comes the actual China play. That play is based on China's historically massive investment in that country railroad infrastructure. We are talking 21th century technology rail here - not what we see today. To compete against that, and to reduce ever rising cost of oil, USA has to revamp its rail structure. This must be done of US is finished. This is where Buffet BNSF holding will accept massive investments from US private & public sectors, plus China capital and technological investments in exchange for ownership.
3) Leverage green technology. The railroad lands and rights of way will be critical to any build out of green power grid infrastructure. It becomes the new interconnect, able to bypass existing power grid interconnect. Already China is selling hundreds of wind turbines to a Texas wind farm. They would love to sell thousands more to Buffet new 'railroad' wind farm and interconnects.

All the Oracle has to do is to sit on his assets on the ground, protected from inflation, and wait for the 2) and 3) investment money coming his way. And looking pretty.

Meriwether: When Failed Genius Is Rewarded

Felix, I only take issue with the title of this post - 'genius'.

Failed or not, using the word genius to describe anybody trading funds is a insult to humanity.

A genius is one who made major discovery, design or build the most incredible things.

Hedge fund traders bet the future. If they win, they got lucky. If they lose, they got unlucky. If they win time again, consistently, against all odds, we can call them prophets and seers. But not genius.

A Radical Solution for America's Insolvent Financial System

The following is far simpler and will work much better:

1) No bailout and let all US banks fend for themselves.
2) Remove all restrictions for foreign banks to enter the US market and conduct business in all manner.
3) Any foreign banks willing to enter will be large, well-capitalized, and have a sterling reputation.

Such foreign banks will fix the US banking system automatically without costing tax payers a dime.

Yes, the nationalists and big biz elite will cry murder. But it is time for them to get murdered for a change.

Should Bernanke Be Reappointed?

NO. No reappointment.

Because we need a new face. A new face to run a new kind of Fed. A break from the past. A new kind of Fed that's NOT owned by the major banks, totally independent but much more transparent and accountable. We also need a new mandate for the Fed. Yes to monetary policy, yes to economic forecast, yes to reserve and credit policy, yes to targeted inflation control, stability of currency. Yes to audit by Congress. But NO to regulator, NO to promote so-called economic growth through the interests of the banking system.

The existing Fed must be re-invented. Then install a new kind of chairman to run it.

Dr Bernanke has done a reasonable job under stress. Thanks but good bye. Give him a medal and let him write a book.

There Is More to Why Canada's Banks Are Better

The real difference is not what you described or quoted.

The real difference is economic philosophy driven by cultural preference. Yes Canada has a market-based capitalist competitive economy. But the country is keenly aware of its downside and therefore shy away from Utopian excess. It therefore implemented a financial system, including regulatory regime, that clips at the excess BEFORE it happened. The regulators dare not go to bed with the regulated, nor asleep at the table, because they know the public won't stand for it, and will call for severe punishments when things go wrong. Canada has a parliamentary system - meaning the government can be replaced at moment's notice if big bad things happen. Politicians are always insecure, always on the lookout. They have no time for corruption.

On the contrary, the US economic system has shifted from a reasonably good check-and-balance of the 70's - 80's into a utopian fundamentalism of the past 2 decades, where everybody - from the hotdog guy all the way to the Fed chair, bought into a $10 trillion dollar nonsense. Not only are the financial regulators went to sleep, the whole country got dis-regulated. The national hubris is so great even the penguins in Antarctica smell it. Except the country of course.

The Fate of General Motors' Rick Wagoner

So Rich Wagoner, CEO of a huge international corporation, shining example of capitalism, begged a supposed 'socialist' president for money. And it is the 'socialist' who demanded and got capitalist accounting for results from the famed capitalist.

I got to climb up to my attic and find that old dusty textbook book I locked away since I took economics 201 a very long time ago. Something about a certain Mr Marx who predicted that one day it will be socialism who save capitalism from its inevitable corruption.

Ah but we are not done. The CEOs of the Big 5 of Wall Street fame are still counting their fat bailout money, smiling all the way to the 'bank'. Isn't socialism such fun, especially when you can get away with it.

Helicopter Ben Turns into Ballistic Missile

Fed took this step because of one big thing - all actions thus far failed to fix the banks, and as economy further tanks, even more banks will be hit. There is no way to arrest the spiral. Except to print the money to absorb the banks' bad assets, and to fund Obama stimulus package. It is also a reflection that foreigners no longer will by Treasuries.

And so here we are. This is probably the last step in monetary policy. Either this is the beginning of a fix, or the beginning of hyper-inflation. Bernanke made the call. Now it's our turn.