TwistedSifter

Every Wednesday you will find links and top-line summaries to current events around the globe.

Berkshire Bets on U.S. With a Railroad Purchase [New York Times]

- Berkshire Hathaway, the investment vehicle of Warren E. Buffett, said on Tuesday that it planned to buy the 77.4% of Burlington Northern Santa Fe it did not already own for $26 billion in cash and stock, in the largest deal in Berkshire history. “It’s an all-in wager on the economic future of the United States,” he said in a written statement. “I love these bets.”
- During the financial crisis of last year, Mr. Buffett spent $14.5 billion to buy preferred shares of three blue-chip American companies, Wrigley, General Electric and Goldman Sachs. These companies didn’t get Mr. Buffett’s seal of approval for free, however; the preferred stock carries hefty dividend payments
- Burlington Northern was created in June of 1994 with the merger of Burlington Northern Inc. and the Santa Fe Pacific Corporation in a stock swap valued at $2.7 billion. The merger was seen as complementary, giving it access to the coal fields of the West as well as West Coasts ports and Mexico and Canada

Lloyds and R.B.S. Announce Major Shuffle [New York Times]

- In a major shuffle of the British banking sector on Tuesday, Lloyds Banking Group announced plans to keep the government from taking a majority stake, while Royal Bank of Scotland would give up even more control. Both banks were forced by the European Union to sell large parts of their businesses to comply with competition regulation
- R.B.S. agreed to sell its insurance business and some bank branches to meet European competition rules on accepting state aid. Already majority-owned by the British government, R.B.S will take an additional investment of $41.6 billion from the Treasury. As a result, the government would increase its stake in the bank to 84.4% from 70%
- In contrast, Lloyds announced plans to tap investors for $34.69 bn in what would be Britain’s biggest rights offer to avoid handing over a majority stake to the government. Britain’s government is seeking to increase competition in its banking market after the credit crisis forced three of the country’s largest lenders either completely or partially into government hands

Pakistan Takes Taliban Stronghold [BBC]

- Pakistani forces say they have seized control of the town of Kaniguram in South Waziristan, one of the Taliban’s key regional strongholds. The offensive has sparked a string of suicide bomb attacks. About 35 people were killed in an attack in Rawalpindi and seven were injured on the outskirts of Lahore
- Pakistan’s government has offered rewards totalling $5m for information leading to the capture of Hakimullah Mehsud, two other Taliban leaders and 15 commanders. In a front-page ad in Pakistan’s daily, The News, the largest sum of $600,000 was promised for the capture - dead or alive - of Hakimullah Mehsud
- About 300 people have been killed in attacks since mid-October. Last week, more than 100 people were killed when a huge car bomb ripped through a busy market in Peshawar

Online gambling boss jailed in US [BBC]

- A US court has jailed the founder of an online gambling firm for more than four years and ordered him to forfeit more than $43m in illicit earnings. Gary Kaplan, 50, had admitted various charges of fraud and racketeering related to his company, BetOnSports
- US authorities have been investigating offshore sports gambling since 1997, and BetOnSports since 2001. In August, Kaplan admitted setting up offshore businesses in Antigua, Costa Rica and the Caribbean island of Aruba, to provide gambling for US residents through the internet and toll-free telephone numbers
- By 2004, BetOnSports’ main base in Costa Rica employed 1,700 people and had nearly one million registered customers, the St Louis Business Journal reported. In that year, Kaplan sold BetOnSports shares on the London Stock Exchange which netted him more than $100 million

Despite Slump, Venture Firm Sets Up $575 Million Fund [New York Times]

- On Monday, Greylock Partners, which has backed Facebook and LinkedIn, announced that it had put together a new $575 million fund, one of the biggest to be created in the last year. It has also hired a new partner, Reid Hoffman, the founder of LinkedIn and an active investor in early-stage start-ups
- Endowments, pension funds and foundations that invest in venture funds have been cutting back because of losses in their portfolios and shrinking returns in venture capital. In the third quarter, only 17 venture firms raised fresh capital, down from 63 in the same period last year and the lowest number since 1994
- Ten-year returns for venture capital, which reached 36% in 2000 at the height of the dot-com bubble, shrank to 14% in the period ending June 30, according to Cambridge Associates, though venture capital has still outperformed the public markets

Cost-Cutting Boosts Ford Profits [BBC]

- Pre-tax profit for the quarter came in at $997m, compared with a loss of $161m a year earlier. Revenue was $30.9bn, down $800m on a year ago. Ford cut costs by $1bn during the quarter, bringing the total reduction for the year-to-date to $4.6bn. This exceeds the target of $4bn that the carmaker set itself for the whole of 2009
- It said these reductions came from lower manufacturing costs due to improved productivity and staff cuts. The carmaker also reported increased market share in the US and in Europe, and a 63% jump in sales in China
- Unlike its rivals, General Motors and Chrysler, Ford has managed without a US government bail-out. However, it has not escaped unscathed from the financial crisis and economic downturn. The company has cut tens of thousands of jobs and closed factories to reduce costs

China’s Africa Goals More Than Just Natural Resources [Reuters]

- Communist China’s friendly relations with Africa go back decades, to when Beijing backed newly independent states as well as liberation movements. The continent’s backing was vital in getting China into the United Nations in 1971. In 2006, President Hu Jintao promised a leap in investment, trade and aid at Beijing’s first summit with African leaders. At the G20 summit last November, he raised Africa’s needs during the global economic turmoil
- Africa’s GDP is about $1.2 trillion, roughly one quarter the size of China’s $4.4 trillion economy. Trade between China and African countries has surged by an average annual 30% for much of the past decade, driven by China’s appetite for oil and minerals, and its sales of clothes, cars, telecommunications and other goods to African markets
- Africa also offers China important diplomatic support that it invariably does not get from the United States, Europe or even other countries in Asia, especially when it comes to contentious issues like United Nations’ votes over human rights

- File-Sharers are Big Spenders Too [BBC]
- Karzai Declared Elected President [BBC]
- If Fox Is Partisan, It Is Not Alone [New York Times]
- Johnson & Johnson to Slash 7,000 to 8,000 Jobs [Reuters]
- Nokia Siemens to Cut Up to 9% of Workforce [New York Times]
- Italy, Vatican in Uproar Over Court Crucifix Ruling [Reuters]
- Chinese Crime ‘Godmother’ Jailed [BBC]
- $3.5 Billion Toolmaker Deal Ends a 28-Year Courtship [New York Times]
- Honduras Politicians Defer Vote [BBC]
- CIT Group in US Bankruptcy Move [BBC]
- Children Watch More TV Than Ever [New York Times]
- European Water Mission Lifts Off [BBC]
- Risks and Rewards on China’s New Stock Board [New York Times]
- Former Spy Shot Dead Near Putin’s Moscow Office [Reuters]

AP Photo/Mohammad Iqbal
A man stands near the scene of an explosion in Peshawar, Pakistan. A car bomb has torn through a busy marketplace collapsing several buildings, setting fires and killing at least 93 people including 60 women and children

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