Warren Buffet’s move to buy a railroad company has garnered a lot of attention. His purchase is not only seen as an investment, it is also widely viewed by others as a sign that the recession has bottomed out. As many know, Warren Buffet is known by many as one of the greatest investors today. His firm, Berkshire Hathaway has a significant amount of “cash hoard” from his previous initiatives.

How Much Did Warren Buffet Buy the Company For?

The firm will be buying the Burlington Northern Santa Fe Corp. at $44 billion ($100 per share). During the last year, the stock price of Burlington has dragged the performance of the Dow Jones Transportation Average. Financial analysts believe that Buffet has paid 18.2 times Burlington’s estimated earning for 2010. The move is not characteristic of the revered investor especially with his past history of not paying a premium when investing new capital. As a result, many think that the explanation behind this is that the man sees hidden potential in the company.

Contrary to Market Trends

Transportation is an ailing industry. As of the November 2 market close, its stocks were dragging behind the entire stock market in the United States at a margin of 15.94 percent. In addition, the number of passengers that the rail services are depressed, a key indicator of an economic downturn.

The Association of American Railroads announced that for the week ending Oct. 10, there was weak demand for goods all over the United States. On the West Coast, it was down 15.4 percent and on the East; it was down by a staggering 19.7 percent.

Given all this, Warren Buffet’s decision to invest in the railway industry come a surprise to everyone. However, even if it proves to be a good move in Buffet’s part, it isn’t necessarily an indication of an economic recovery.

Foreclosure is an intimate concern among families. It affects their lifestyle, standard of living, and their future. It is no wonder that when people hear about foreclosure stories, they cannot help but emphasize with the evicted homeowners. There are even cases when viewers are outraged in the circumstances surrounding the eviction. Whatever the case, it is clear that foreclosure has become a big problem in American society.

In addition, aside from being a personal problem, foreclosure is also a social problem. For instance, areas that have a high foreclosure rate tend to experience a more drastic decline in home prices compared to other areas. Unoccupied homes also become a target among the homeless seeking some shelter. It destroys communities as well as the relationship among neighbors as people put their guards up. Some interesting news, stories, and developments about foreclosure are below:

Bill Shrink Guy @ Shrinkage is Good uploaded a compilation of disturbing news in his post, “10 Outrageous Foreclosure Stories.” Among the stories he compiled include one about a home that was foreclosed about the couple was scammed by Bernie Madoff. The house was turned into a party pad by a Wells-Fargo executive. There was also a story about how one woman committed suicide while another poisoned the kids.

Katie Lopez @ Valley Central posted an article titled “McAllen Seeing Increase in Foreclosures”. The revelations outlined in the article are not at all surprising. With the economic crisis still not completely resolved, more people are losing their homes. It also featured several stories about real homeowners who faced foreclosure.

If you are looking for some inspiring stories, then the blog Man vs. Debt might be the right one for you now. Adam posted an article, “How I Paid Off $15,000 in 9 Months by Selling My Stuff on Ebay”. Although the article is not exactly related to foreclosure, it might as well be. After all, the amount he raised is enough to pay off the mortgage and head off foreclosure for many households.

With the GDP growing by 3.5 percent in the third quarter, economists and market watchers are expressing a small sigh of relief. However, no one can deny that a lot of taxpayer money has been invested into the economy through tax hikes and this contributed significantly to the growth. The question is, how much can be attributed to the bailout and how much to the real economy? To find the answer to this question, it is essential to know what recovery really is.

Basically, there are three developments that are required to get the economy back on tract. The first development required is bank stabilization. Recklessness in the financial institution was a major cause of the recession. The turmoil in this industry started in August 2007 and reached its peak at the early autumn of 2008. The crisis has passed and the stabilization of the financial industry laid the foundation that allows the economy to heal. The second development is GDP growth. From the first paragraph, it is apparent that this has been met as well.

The third development that needs to happen is the job growth. Unlike the first two factors, it is slower to develop but it affects people’s lives more intimately than the first two. Even during the shallow recession in 2001, it took almost 2 years before job growth became positive once again. Another problem in determining what the real “job growth” really means is unreliable data. For example, the government released new figures that said the stimulus package “created or saved” more than a million jobs.

These data was collected from agencies that received funds under the American Recovery and Reinvestment Act of 2009. Unfortunately, the figure is not reliable because of reporting basis. Recipients feel encouraged to inflate the number of “jobs” they created in the race for federal money. It would be misleading to take the numbers at face value. The unemployment rate stands at 9.8 percent, few are comforted that a million jobs were said to be “retained”.

The bankruptcy of CIT, the biggest SME lender, is adding anxiety to retailer worries ahead of the Christmas season. CIT filed for Chapter 11 bankruptcy protection in New York on Sunday after months of trying to stay afloat. The company is most well-known for providing much-needed credit to small and medium-scale businesses. It helps retailers stock up their shelves, expand business operations, and stimulate growth. Through the years, it has become an important player in enabling capital to flow in the retain sector.

While the bankruptcy spells bad news for most, CIT announced that its lending activities will continue even as it proceeds with the bankruptcy. It hopes to shed around $10 billion in debt and implement the prepackaged reorganization plan. Chairman and CEO Jeffry Peek said that the reorganization “will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the US economy.”

No matter CIT’s good intentions though, analysts and retailers said that the case will most likely contribute to instability within the retail industry. CIT works with 2,000 vendors that provide merchandize to 300,000 stores. And a majority of players in the apparel industry rely on CIT for credit. Stores have already begun stocking up on holiday merchandize. However, they will require a reliable source of funding to restock their inventory, avoid shipping disruptions, and ensure continues supply.

Even a day without financing could create a bottleneck because shipments can be left in vendor’s warehouses or in the dock. CIT entered bankruptcy in a critical season but it dodged the worst of it for now because most merchandize for the holidays are already in distribution centers. More serious problems may emerge in the 2010 spring season as retailers gear up for a rebound in customer spending.