Warren Buffett releases his annual letter to Berkshire Hathaway Inc.

Investor Warren Buffett released his annual letter to Berkshire Hathaway Inc. shareholders Saturday morning. The Berkshire chairman and chief executive spent a large part of the letter explaining the guiding principles he and Vice Chairman Charlie Munger follow in running the Omaha-based company. The full letter is available online at http://www.berkshirehathaway.com.

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“We will never become dependent on the kindness of strangers,” Buffett wrote. “Too-big-to-fail is not a fallback position at Berkshire. Instead, we will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity. Moreover, that liquidity will be constantly refreshed by a gusher of earnings from our many and diverse businesses.

“When the financial system went into cardiac arrest in September 2008, Berkshire was a supplier of liquidity and capital to the system, not a supplicant. [Read the full article]

Prudential PLC, Britain’s largest life insurer, is exploring a bid for the Asian life-insurance arm of American International Group Inc., according to media reports Saturday.

The Wall Street Journal, citing people familiar with the matter it did not name, reported a deal could come in a week. Prudential would pay with a mixture of cash and stock, but the terms are still being negotiated, it reported. Talks of a deal were first reported by Sky News.

AIG has said it plans to sell the unit, American International Assurance Co., or spin it off into a separate company through an initial public offering, part of an effort to pay off the debt it owes to the U.S. government.

AIG said Friday it lost $8.87 billion in the fourth quarter as its general insurance business remained weak. It also warned it may need additional support from the government. However, AIG has included such warnings in past filings with the Securities and Exchange Commission. [Read the full article]

President Barack Obama said Saturday he is ready to compromise with Republicans on health care if they are serious about it, but that an overhaul must go forward. “Let’s get this done,” he said.

Obama’s comments in his weekly Internet and radio address, two days after an all-day bipartisan summit across from the White House, were the latest sign that Democrats are getting set to try to pass health care legislation without any Republicans on board.

Success will require colossal efforts on the part of Obama and Democratic leaders to round up votes after a year of corrosive debate and a Senate special-election upset that threw the overhaul effort into limbo last month. But Obama and the Democrats reject the piecemeal approach sought by Republicans and have no intention of scrapping their 10-year, $1 trillion bill and starting over, as the GOP demands. [Read the full article]

Labor’s high hopes for major gains under President Barack Obama and a Democratic Congress have dimmed, raising fresh doubts about union leverage even in the best of political times.

Prospects for a health overhaul have faded. Even slimmer are the chances of achieving labor’s chief goal, passage of a bill making it easier for unions to organize workers. A bipartisan jobs bill passed this week by the Senate drew tepid praise from the AFL-CIO president, Richard Trumka, who called it a “Band-Aid on an amputated limb” — far short of what unions wanted.

This wasn’t what unions expected a year ago after spending more than $400 million to help elect Obama and increase the size of Democratic majorities in the Senate and House. [Read the full article]

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