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Berkshire Sets Sights on a Comeback


Warren Buffett still has some tricks up his sleeve.

Minyan Mourning Memo

This morning's memo is dedicated to John Hughes, The Breakfast Club director. Gone but never forgotten.

One to watch: Friday afternoon in the summer is normally prime time to bury bad news but Berkshire Hathaway (BRK-A) may buck the trend when it reports second quarter results after the close. This week the 'A' shares, topped $100,000 for the first time since January on anticipation it's about to end six successive quarters of lower earnings.

Stock in the conglomerate which encompasses everything from candy to car insurance to Clayton Homes is still some way from its all time peak of $148,000 at the end of '07. Areas of concern include Oracle of Omaha Warren Buffett entering his 80th year at the end of August and his holding company recently enduring its first quarterly loss since 2001. Still, those who say the sage whose product portfolio includes Fruit of the Loom underwear is now an emperor without clothes do so at their peril. Don't be fooled by the folksiness; in between bites of peanut brittle and games of bridge, Buffett found time to buy a stake in Goldman (GS) last autumn, a move which increasingly looks like a masterstroke.

What just happened: Stocks, and Steven Tyler, both slipped with the S&P 500 ending under 1,000 for the first time all week. Losses were limited by a 13% gain in Limited Brands (LTD). Sugar soared to a 28 year high. The Bronx basked in both Sonia Sotomayor's Senate confirmation and the Bombers finally besting those boys from Beantown.

What's happening: Asia ended largely lower, dragged down by commodities. European shares are reversing earlier declines after a better than expected U.S. jobs report. Here at home stocks equities opened up.

What will happen: In economics, the month's key release came at 8:30AM Eastern when the Labor Department announced July nonfarm jobs fell 247,000, far ahead of forecasts. Adding to a feelgood factor the unemployment rate dipped to 9.4% and there were net upward revisions to May and June. As ever however, context is key: this is still a record 19th straight month of payroll declines.

We'll be learning about earnings from AES Corp (AES), AIG (AIG), Ambac Financial (ABK), Edison International (EIX), Mirant (MIR), and Warner Chilcott (WCRX). And President Obama is scheduled to speak on the economy a little after 1 PM Eastern.

Happenstance: Though the layoffs are too late to be included in today's jobs report, news comes that the cast of "9 to 5" are soon to join America's idle. The Broadway bomb is scheduled to close, ironically enough, around Labor Day.
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