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Berkshire hit $800 Billion market cap today *rocketshipemoji*

Well I agree that QE and QT had almost zero effect on interest rates. The Fed‘s own studies showed the same - a few basis points, maybe, in theory. It’s not just the net interest (losses) paid by the Fed into the private sector that is stimulating. The much larger factor is the increase in the interest component of deficit spending into the private sector. Such a large portion of the debt is short term, as there is enormous demand for the most useful collateral in the world - US Treasury Bills. Fed hikes increase deficit spending, stimulating the private sector, but only the folks that are flush. Uncle Warren might have skipped the PPP for optics but he’s the real beneficiary of the current policy. deficit spending is the ultimate stimulus. Much more potent than conventional monetary policy

What's amazing in that last chart is how little bank reserves the system "needed" until recently, when all of a sudden QE apparently pushed a ton of un-needed bank reserves into the system by swapping one interest bearing government liability for another. Now the Fed has this balance sheet where they own long dated paper in an inverted yield curve environment and they are increasing the stimulus into the economy by running the Fed at a loss (paying net interest into the economy). Just another example of the Fed having it totally backwards and stimulating while they say they are trying to tighten...

Well I don't think the fact that it isn't particularly strong vs. the USD is what is keeping it from becoming the "new reserve currency" or whatever. It is sort of amusing how it was all the rage to label China "currency manipulators" and talk about how unfair it was. But here we are with the Chinese government, through directives to the major Chinese commercial banks to re-lend and recirculate dollars, manipulating the currency daily to try to keep it stronger. Markets are not convinced. USD-CNY and USD-JPY has been a very tight correlation lately. A lot of dollar funding in Asia comes through Japan or by transforming Japanese collateral into USD-denominated monetary instruments, derivatives, etc... Indian Rupee will be taken along for the ride. *I'm sorry, Bharat, old habits die hard

Well I purposely didn't post this on the Fairfax India thread but of course the topic of discussion went straight to Fairfax India. Apart from being way too illiquid for most large investors to get involved with a meaningful investment in FIH.U, I think the currency dynamics are a big part of why investors would reduce the size of their exposure. If the INR chart were a stock chart people would be chomping at the bit to short the shit out of INR for the breakdown. The intervention line on USD-INR is even more obvious than the CNY dynamic, where the Chinese just keep fixing the midpoint of their target WAY higher than CNY is trading. Recently the market has just over-ruled the Chinese gov.'s wishes and taken CNY down to 2008 levels.

Thanks for the color on Citizens. Nothing like waiting 3 months to hear back when your roof is already partially gone. I guess USAA won't write the wind coverage for you? We have USAA coverage for all of our properties, wind, named storms, etc - everything but Flood which is FEMA. USAA has been wonderful when you need to file a claim. The mutual membership model makes the whole experience much less adversarial. Hell, a former tenant once sued us for a sprained wrist on a slip-and-fall during a rainstorm (documented on security camera footage) and USAA actually lowered our premium because they said they didn't know we had cameras before. I never served in the Military, but I've had USAA coverage since I was 15 because my Father had been in the Air Force. Not sure we could have purchased our home in New Orleans right after Katrina (when people were scared, prices were very low, and insurance was hard to come by) if it wasn't for USAA.

With the Chinese currency breaking down to new lows at 7.317 to the USD (despite continued intervention by Chinese commercial banks at the behest of the government) - there is no way the INR will be able to hold the ridiculous line in the sand that Indian authorities have defended all year. CNY, JPY and INR are all being taken town by demand for USD in Asia. Looks like INR has some room to weaken after breaking this manipulated "floor" at 83 1- year USD-Rupee 2- year USD-Rupee

One of my favorite deals they did years ago with Florida Citizens was get paid an insurance-like premium up-front - not to insure a claims risk directly - but to commit ahead of time to buy some newly issued municipal bonds from Citizens in the future if losses exceeded a certain threshold. No mega-cat, collect your premiums and book the profit. Huge mega-cat, buy a few hundred million dollars of muni bonds. Nice work if you can get it.

Thanks for the post Cigarbutt. It certainly is interesting to see a big headline where Berkshire writes $1 Billion of cat reinsurance to Citizens and then read the details to see that they didn't participate in the Coastal account at all. PLA layer is further inland, non-coastal areas of the state.

I just got off the phone with an old friend who recently moved from Cook County, IL to Naples, FL. She mentioned offhand that she immediately got $400 more in each paycheck (I assume every two weeks, didn't ask) when she became a Florida resident. She promptly pre-spent it on financed durable goods but that's the American way...

FWIW, Berkshire Hathaway Energy still owns 98.6 million BYD (hk:1211) shares with a current value of $3 Billion USD.

$3.3 Billion cash deal for Cove Point closed today. Greg Abel continuing to put his mark on the company. This is what they used the proceeds from the partial BYD share sale for. https://www.businesswire.com/news/home/20230901350178/en/Berkshire-Hathaway-Energy-Completes-Acquisition-of-Additional-Stake-in-Cove-Point-LNG

I assume you are referencing Sidney Weinberg. I'm not sure of what the best books are on this period or his influence but I'm sure if you google his name you can find a bunch of articles about him and several histories of Goldman Sachs. One of the best monetary histories of the United States is this one, but it's probably not the book you are looking for in your question: https://www.amazon.com/dp/0691003548/?coliid=I255V4DNCMU3UD&colid=1UBQAXGQNN2BF&psc=1&ref_=list_c_wl_lv_ov_lig_dp_it

It's probably where Sardar got the idea

well that gives it away - BND.

Off the top of my head, the purchase price was based on multiples of prior year's earnings, which were much higher. Berkshire shut down some lines of business after acquiring the company. There was also a change in upper management. Another very big factor is purchase/acquisition accounting related amortization that kicks in in a major way as soon as Berkshire bought the company and wrote up the value to the implied purchase price. Here's a blurb on the reduced reported profits - " Pilot’s revenues and earnings are highly dependent on fuel volumes, prices and margins. Revenues for the second quarter of 2023 and the five months ending June 30, 2023 were $14.8 billion and $24.3 billion, respectively. Pilot’s pre-tax earnings for the second quarter of 2023 and the five months ending June 30, 2023 were $186 million and $322 million, respectively. Operating and other expenses include depreciation and amortization expense of $243 million in the second quarter of 2023 and $411 million in the five months ending June 30, 2023, a significant portion of which derives from property, plant and equipment and finite-lived intangible asset fair value remeasurements in connection with our application of the acquisition accounting method in 2023."

Did this already get posted here? https://www.bloomberg.com/news/articles/2023-08-25/veritas-is-said-to-consider-takeover-offer-for-blackberry

Atlas / Poseidon still reports to the SEC for those that are curious - https://www.sec.gov/Archives/edgar/data/1794846/000162828023030275/atlascorpq220236-k.htm

If you are taking underwriting profit out of the equation in your example above, the simple math in your example is 5.5% on $56.6B of invested assets against an $18.6B common shareholders' equity. The leverage is closer to 3 than 2. Which is what gets you to 15% on equity.

They sold the GM on May 10th at $34.41 avg. per share. Not at the top of the year's price range.

I took a look at the Columbia Insurance filing for q2 and the only new information there was that they bought and completely sold Pulte Group during the quarter as part of the homebuilder basket someone is doing. This filing makes it look like they bought some Apple stock in the quarter but they really didn't. This is just a transfer from Brilliant National Services, one of the bankrupt asbestos liability shells that BRK put out the press release about earlier this year. columbia ins q2 pgs 177 178.pdf

I think that is all of the Japanese activity there in NICO but I haven't pulled the Columbia Insurance subsidiary filing for Q2 yet so I can't say for sure. I'll let you know if I see them anywhere else. The filings are at https://insdata.naic.org but they cost around $4 USD each so I post them to save the other nerds the $.

This is an excerpt from National Indemnity's 2nd quarter NAIC filing, with the pages showing the investments acquired and disposed during the quarter. You can figure what price they got for the early sales of ATVI ($79.57 average per share). They also sold some Munich Re shares in NICO. Also an interesting new derivative security with a 3 year term that seems to be effected if there is another earthquake in Chile. nico q2 naic pgs 178 181.pdf

For anyone that is curious about Berkshire's Q2 activity in Foreign stocks other than BYD, here is Gen Re's Q2 activity - no equity purchases. Sales of Nestle, Munich Re, and Allianz. (one page pdf attached) gen re q2 page 159.pdf