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                                                                                                June 11, 2009

Mr. V. Prem Watsa
Chairman and Chief Executive Officer
Fairfax Financial Holdings Limited
95 Wellington Street West, Suite 800
Toronto, Ontario Canada M5J 2N7

Re: Fairfax Financial Holdings Limited
 Form 40-F for the Fiscal Year Ended December 31, 2008
Filed March 6, 2009 File No. 1-31556
 Dear Mr. Watsa:

We have reviewed your filing and have the following comments.  In our
comments, we ask you to provide us with  information to better understand your
disclosure.  Where a comment requests you to  revise disclosure, the information you
provide should show us what the revised disc losure will look like and identify the annual
or quarterly filing, as appli cable, in which you intend to fi rst include it.  If you do not
believe that revised disclosure  is necessary, explain the reason in your response.  After
reviewing the information provided, we may raise additional comments and/or request
that you amend your filing.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or on any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Exhibit 2

Notes to Consolidated Financial Statements
 4. Securities Sold but not yet Purchase d and Derivative Transactions, page 41

1. In 2008, you “closed-out” your short equity  and equity index instruments,
realizing pre tax gains of $2.1 billion. Please revise your disclosure to explain the
process and accounting for these “close- out” transactions. Tell us how each
payment made or received was recorded  and the amount of any gain or loss
recognized. Link this disclosure to the re lated amounts recorded in your financial

Mr. V. Prem Watsa
Fairfax Financial Holdings Limited   June 11, 2009 Page 2
 statements, including derivative liabilities  and any amounts of collateral received.
Discuss, as applicable, counterparty nett ing activity that occurred in connection
with these transactions.
2. Since 2003, you have been purchasing credit default swaps referenced to various
issuers in the banking, mortgage and insurance sectors of  the financial services
industry that served as an economic hedge  against fair value declines of your
financial assets. In 2008, you realized a $1.3 billion gain from the sale of these
credit default swap contracts with a notional value of $12.6 billion. Please revise
your disclosure to explain the process a nd accounting for these credit default swap
sales, including how the $1.3 billion gain on these sale s related to previously-
recognized changes in fair value for these derivative financial instruments. Tell us
how each payment made or received was r ecorded and the amount of any gain or
loss recognized. Link this disclosure to the related amounts recorded in your
financial statements, including derivative liabilities and any amounts of collateral
received. Discuss, as applicable, counterp arty netting activity that occurred in
connection with these transactions.

18. Financial Risk Management, page 60

3. Please describe your objectives and strate gies for using derivatives instruments
and quantify how derivative instruments and related hedged items affected and
are expected to effect your financial positi on, results of operations  and cash flows.
Credit Risk
4. Please describe and quantify how your cred it default swaps have served as an
economic hedge against fair value declines in your financial asse ts, as well as the
effects that these hedging activities may be expected to have on the Company’s
future financial position, li quidity and operating results.
Liquidity Risk
5. Please revise your disclosure to present the claims liability in the schedule of
payment obligations on a gross and not a net basis.  This comment also applies to
your disclosure in the tabl e of contractual obligations  on page 147 in Exhibit 3.
 Market Risk
6. As a result, of your close-out of synthetic short positions in various global equity
indices and listed common stocks and sale  of credit default swaps, you appear to
have eliminated a significant portion of the economic hedges protecting your
capital, despite your asserti on that the current recession is going to be long and
deep. In addition, given the decline in  equity valuations, you significantly
increased your equity holdings in the fourth quarter of 2008. Please revise your
disclosure to explain the impact of these transacti ons on your financial risk

Mr. V. Prem Watsa
Fairfax Financial Holdings Limited   June 11, 2009 Page 3
 management programs, particularly your st rategy for controlling future credit risk
and market risk.

Market Price Fluctuations
7. You disclose that at December 31, 2007 the fair value and notional amount of
certain derivative positions represented 85.6% of the Company’s aggregate equity
holdings. However, similar disclosure was not provided at December 31, 2008.
Please revise your disclosure to describe and quantify how he dging activities have
mitigated realized losses on your equity  securities for each period presented, as
well as the effects that these hedging activ ities may be expected to have on the
Company’s future financial position, li quidity and operating results. Also, we
were unable to find your disclo sure in Note 4 of the shor t positions in the form of
SPDRs, common stocks and total return swaps with an aggregate fair value and notional amount of $2,856.9 million. Please te ll us where this disclosure is
located.

Exhibit 3

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
 Components of Net Earnings

Net gains on investments, page 111
8. Please revise to disclose how the $2,079.6 m illion of gains related to the close-out
of your short equity and equity inde x positions relates to the corresponding
$1,876.8 million notional amount at Decem ber 31, 2007 and the corresponding
reclassification from accumulated ot her comprehensive income in 2008.
9. Please revise to disclose how the $1,290.5 million of gains recognized on the sale
of credit default swap instruments in 2008 relates to the corresponding $1,802.9
million of gains disclosed in the table on page 111. Explain how the original acquisition cost of approximately $245.8 m illion, as presented in this table,
impacted the determination of gains reco rded in your consolidated statement of
earnings. In addition, reconcile the notiona l amount of credit default swaps at
December 31, 2007, as disclosed in Note 4, with the notional amounts presented
in this table.
10. You use third party broker-dea ler quotes to determine fair value for these credit
default swaps, which you assert is subject to significant volatility. The fair value
of credit default swaps sold in 2008 represented approximately 18% of notional value while the fair valu e of credit default swaps held at December 31, 2008
represented approximately 5% of notional value. Please revise your disclosure to
explain the factors that caused this apparent decrease in fair value.
11. In connection with the re maining credit default swaps with an $8.9 billion
notional value at December 31, 2008, please di sclose the material terms of these

Mr. V. Prem Watsa
Fairfax Financial Holdings Limited   June 11, 2009 Page 4
 credit default swap contract s, including the identity of counterparties to these
transactions, the specific c overed financial risks, the defined credit events and
collateral posting requirements, as well as the nature of events and conditions that
trigger them.
*    *    *    *
Please respond to these comments within  10 business days or tell us when you
will provide us with a response.  Please furnish a letter that  keys your responses to our
comments and provide the requested information.  Detailed letters gr eatly facilitate our
review.  Please furnish your letter on EDGAR under the form type label CORRESP.

 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comment on your filing.

Please contact Frank Wyman, Staff A ccountant, at (202) 551-3660 or Don
Abbott, Senior Staff Accountant, at (202) 551-3608, if you have any questions regarding
the comments. In this regard, do not he sitate to contact me at (202) 551-3679.

Sincerely,

Jim B. Rosenberg Senior Assistant Chief Accountant