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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (9679)	11/6/2009 2:38:01 PM
From: Alastair McIntosh	1 Recommendation Read Replies (1) \| Respond to of 24213

How to Play Buffett's Big Bet on America Shouldn't that read How to Play Buffett's Big Bet on Coal? mineweb.co.za Warren Buffett's $34 billion bet on the future of the U.S. economy puts Berkshire Hathaway in charge of the U.S's biggest shipments of cleaner, western coal to major utilities including its own MidAmerican Energy Holdings. Burlington Northern Santa Fe (BNSF), which hauls enough coal to power one out of every 10 U.S. homes, has become Berkshire Hathaway's largest acquisition. The railway controls the critical rail lines linking coal from the Powder River Basin, the Northern Great Plains, the Western Interior Basin and the Illinois Basin to the major utility companies of southern California. Jack Albin, chief investment officer at the Harris Private Bank in Chicago, told Reuters, "Buffet is trying to get into coal but doing it in a cheaper way." "It's leveraged against coal's demand without actually having to buy the commodity itself," he said. Buffett already owns 22% of the nation's second largest railroad and is now spending $34 billion in cash and stock in order to buy up all of Burlington Northern Santa Fe. He will also assume about $10 billion of the railroad's debt. Berkshire will pay $16 billion in cash and the rest in stock. In a news release Tuesday, Buffet said, "Berkshire's $34 billion investment is BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry." "Most important of all, however, it's an all-in wager on the economic future of the United States," he said. "I love these bets." Buffett already has holdings in the Union Pacific Railway (1.9% stake) and a 0.5% stake in the Norfolk Southern. It should be noted that imports of coal to China are up 20% year to year. Burlington Northern ships the coal to through western U.S. ports. Coal shipments accounted for half the tonnage moved by Burlington Northern in this first nine months of this year. BNSF also is a key shipper of Asian products into the U.S. Interior.