BNSF

 Rail traffic has been on fire this year, which has been cited in some quarters as a sign of economic recovery. But it is one type of rail traffic that is driving growth: intermodal. Container freight shipped via rail has risen 17.3% (in September) and 17% year-to-date through August in a startling contrast to the anemic economy.

My first take on the shareholder letter this a.m. is that it didn't say a whole lot that was new but there are some interesting points worth commenting on. Forgive me for starting out with a gripe but as a former CPA, I must say this. Berkshire has been growing less transparent year by year. Now it is going to combine BNI with its utlity segment for financial reporting next year. Buffett made the argument for combining them (regulated, high capex etc.), but the result is less transparency. BNI is in the transportation business.

My cover story for this week's Bloomberg BusinessWeek appears on newsstands today and on BusinessWeek website (read it here).

Erin would like more on the Burlington-Northern deal. (Refer here to Bloomberg column on this subject.) The BNI strikes me as a classic Buffett way to solve a group of unrelated problems with one stroke. Uses capital in a way that will earn steady predictable returns more or less forever. Some people have described it as a bullish bet on the economy -- I disagree and think that Buffett is, rightly, making a bearish bet on the economy (although BNI will do fine either way).

   This deal reminds me of some stories. I wrote in The Snowball about the giant train set in Warren's attic; about how, as a boy, he used to go to the Brandeis department store at Christmas and "drool," as he put it, over the huge multi-track train display that raced around the eighth floor toy department. One of his fondest memories as a child was being taken on a train to Chicago as a surprise by his grandfather to see a Chicago Cubs game.