In what is being portrayed as a billion-dollar bet on the U.S economy and the future of freight rail, billionaire investor Warren Buffett bought out the Burlington Northern Santa Fe Corp. last week, paying $100 a share for the 77 percent of the company he didn't already own. Buffett, who is known for making investments for their long-term value, made this bold move despite the economic downturn and the resulting decline in freight traffic.
What does this development mean for the rail industry? Buffett presumably expects the demand for freight transportation to rebound, but any number of variables could thwart rail's resurgence (such as losing its antitrust exemption, not getting the investment tax credit it wants, lack of a national intermodal freight program -- not to mention the repercussions if Congress enacts climate change legislation or if the recession deepens). What other variables are in play and what questions did the Buffett deal raise in your mind?