– Billionaire investors Warren Buffett has sent US stock-index futures rallying after his Berkshire Hathaway announced it will buy $5 billion worth of perpetual shares in soon-to-be bank-holding company Goldman Sachs (NYSE:GS). The news sent shares in Goldman up almost 8%. Shares in Morgan Stanley (NYSE:MS), which is also converting into a bank, rose 9.8%.

– December-dated S&P 500 futures rallied 13.10 points, Dow futures were up 101 points, and Nasdaq-100 Index futures rose 18 points on the news. Yesterday, US stocks ended the worst two-day rout since 2002.

– The Fed, nevertheless, is upping its effort to juice up the credit markets.. It has set up swap lines that will provide $30 billion to central banks in Australia, Sweden, Denmark and Norway for short-term loans to commercial banks. The Fed has now made a total of $277 billion available for short-term money-market lending in dollars through foreign central banks

– Crude oil prices climbed by more than a dollar this morning. This brings light sweet crude for November delivery to $108 dollars a barrel in New York. Yesterday, oil prices dropped $3 on profit taking following a $25 one-day jump, the biggest ever in history.

– Oil rollercoaster behavior this year appears to have been too much for legendary-oil-investor-turned-wind-energy-activist T. Boone Pickens. His star is waning, reports the WSJ.

[The] downturn in energy has blindsided the industry veteran, leaving one of his hedge funds that focuses on energy stocks down almost 30% through August. A smaller commodity-focused fund is down 84%.

All in, the funds have lost around $1 billion this year, a figure that includes $270 million of personal losses. “It’s my toughest run in 10 years,” said Mr. Pickens, a former geologist who earned billions by building an oil company and investing in energy. “We missed the turn in the market, there’s nothing fun about it.”

– Other commodities were also up yesterday. The Reuters/Jefferies CRB commodity index had its best day in history.

– Hank Paulson’s $700 billion bailout bonanza is still causing controversy. Writing for CNN Republican congressman Ron Paul had this to say about the plan:

Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.

The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.

It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place.

The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector.

Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.

– The meltdown on Wall Street has given Barack Obama a clear lead in the polls of over John McCain, reports the Washington Post. Obama now leads McCain by 52% to 43%.