The Guardian:
It is one of the world’s largest hedge funds, with $121bn under management, but its name is virtually unknown in financial circles. Braeburn Capital is not operated from the top floor of a Manhattan skyscraper or a plush Mayfair townhouse. It is located in a quiet suburb of Nevada’s capital, Reno, and it belongs to Apple.
Much of Apple’s money is trapped overseas, sheltered from the US taxman, who would demand a 35% cut were the money to be repatriated. But it can be invested at home. Apple’s financial reports show it holds $21bn of US government debt – a vast sum for a single private investor. Foreign governments like investing in US securities, but Apple owns more than the $19bn held by Malaysia, and just $4bn less than Spain.
“Problem”? We should all have such problems.
The other problem is that Reno isn’t the capital of Nevada…
Jim would probably buy Heineken B.V.
It will be a problem if US securities tank in the coming future. There’s some who believe this to be a certainty: cough Peter Schiff cough (http://www.youtube.com/watch?v=kriqAhay2TY [see 4:25])
Heineken Holding has a market cap. $11.24B and Heineken N.V. $27.36B.
Just trinkets.
You could read it as Reno being a quiet suburb of Nevada’s capital (and that’s probably how it’s intended).
I’m not sure Reno’s really “quiet,” and I’m not sure Carson City is loud for that matter, but that’s what they were after.
They’re British – cut them some slack. 🙂
The interest from their cash generates a bigger profit than Amazon made last quarter.
But could Jim, alone, sustain their value?
Amazon made a loss last quarter…
Right.
A 10 year Treasury bond issued today has a rate of 1.74%. The US inflation rate as of 1 October was 2.00%, at the lowest end of inflation targeting. Typically, the Fed aims for 2-3% inflation.
That means that anyone buying US T-bills is doing so on the assumption that they will lose money over the life of their bond. The reason that they do so, the only reason that they do so, and the reason that the yield is so low, is because they know that US T-bills would be among the very last assets to default. That’s how the free market works. And investors know that if the T-bill defaults, the problems will be so bad that it won’t much matter where their money is, if it’s not in bullion.
What’s actually worrying is that Apple’s “investment branch” is carrying so much in T-bills. Either they want them because they can be easily traded/liquidated, or they have very little confidence in the health of the global economy.