Warren Buffett’s Berkshire Hathaway sees profits jump

Billionaire Warren Buffett’s investment firm Berkshire Hathaway has reported a sharp rise in profits thanks in part to strong returns on derivative contracts.

Net profits for the second quarter were $3.4bn (£2.1bn), a rise of 74% on the $2bn the company made a year earlier. Revenue grew to $38.3bn.

The profits on derivatives helped offset insurance losses.

Mr Buffett is the world’s third richest man, with an estimated fortune of about $50bn, according to Forbes.

Berkshire Hathaway has sustained losses at its insurance businesses this year owing to the natural disasters in Japan and New Zealand.

US man charged over Facebook spam turns himself in

A US man charged with sending more than 27 million spam messages to Facebook users has turned himself in.

Sanford Wallace, who is known as the “Spam King”, surrendered to FBI agents in California.

Prosecutors allege he developed a program that breached Facebook spam filters and lured users to submit their account details.

Mr Wallace denies the charges, which carry prison sentences of up to 10 years.

He has been released on $100,000 (£61,000) bail.

Prosecutors say Mr Wallace’s program posted messages on Facebook users walls – purportedly from friends – urging users to visit a website where their account details were then harvested.

They were then redirected to an affiliate website that earned Wallace “substantial revenue”, the charges say.

The program also retrieved lists of Facebook users’ friends and posted spam messages on their walls, the indictment adds.

About 500,000 Facebook accounts were compromised between November 2008 and March 2009, leading to more than 27 million spam messages being sent, prosecutors said.

Mr Wallace, who is from Las Vegas, is charged with six counts of electronic mail fraud, three counts of intentional damage to a protected computer and two counts of criminal contempt.

Facebook sued Mr Wallace in 2009 and a federal judge ordered him not to access Facebook’s computer network. However, prosecutors say he repeatedly violated that order earlier this year.

Mr Wallace also lost a civil case brought against him by MySpace in 2008 over junk messages sent to members of the social networking site.

Gold Volatility Jumps to Highest Level This Year

In a note to clients this morning, Susquehanna noted that gold volatility reached a new high for 2011:

“Alongside the increase in the price of the metal, we have also seen an increase in implied volatility associated with gold, with the GVXX (Gold VIX) spiking over 7% yesterday to reach its highest level of the year. As such, the cost of hedging a gold position through protective puts has become more formidable.”

The firm went on to say that “For those looking to gold but cautious of all-time high levels and elevated volatility, we recommend taking advantage of the call skew in the GLD by hedging through protective risk reversals, specifically highlighting the October 150/174 collar as a low-cost or zero-cost strategy.”