No. of Recommendations: 19
The real question is why is there almost $60 B more "actual" cash and $60 B less T bills? That's in the neighborhood of what $CSX would cost. Just sayin'.That's dumb. There was a distortion in t-bill rates during the quarter associated with maturities that fell around the estimated x-date for the debt ceiling. The distortion was both a "too-high" yield on 60 day bills and a "too low" yield on 30-day bills as shown in these two CNBC graphs linked below.
The commenter's "actual" cash is still t-bills - they are just t-bills of 3 months or less at the time of purchase. T-bills of 3 and 6 months are affected by rate cut expectations so the distortion is best seen in the unique opportunity 2 month t-bills offered to earn a few extra bps.
2 month t-bill yield index (the ones BRK likely piled into):
https://www.cnbc.com/quotes/US2M1 month t-bill index (these are just linked to show how the distortion was related to debt ceiling x-date and resulted in a piling in by money market funds and other scaredy-cats):
https://www.cnbc.com/quotes/US1MSo suggest it had something to do with a merger that hasn't even been announced and would take a year to close to actually require any "cash" is pretty dumb. Also, when large amounts of "cash" are delivered by Berkshire in acquisitions, it is still t-bills that are transferred. It isn't a personal check for $60 billion out of a Wells Fargo savings account.
