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Warren Buffett doesn't need the Fed's help. But he's getting it anyway

June 29, 2020. Summarized by summa-bot.

Warren Buffett, CEO of Berkshire Hathaway, attends the 2019 annual shareholders meeting in Omaha, Nebraska, May 3, 2019. (Photo by Johannes EISELE / AFP) (Photo credit should read JOHANNES EISELE/AFP via Getty Images)

An emergency program run by the Federal Reserve now owns bonds issued by Warren Buffett's Berkshire Hathaway.

Berkshire Hathaway, a company valued at $426 billion, is listed as one of the dozens of companies whose bonds have been scooped up by the Fed lending facility, according to disclosures the central bank made on Sunday.

It's not that Berkshire (BRKA) needs or requested assistance from the Fed -- nor that the relatively tiny bond purchases will move the needle for Buffett's massive company.

Still, the fact that Buffett's Berkshire, which is sitting on $43 billion in cash, now has some of its bonds owned by the Fed program underscores just how far the central bank is going to prop up the capital markets.

Now, the Fed is for the first time directing the purchase of corporate bonds, including risky junk bonds, through its Secondary Market Corporate Credit Facility.

In other words, there is nothing stopping a company whose bonds are now owned by the Fed vehicle from laying off thousands of workers.

The Fed facility also purchased $5. 7 million of bonds issued by Berkshire Hathaway Energy, a division of Buffett's conglomerate that owns utilities such as PacifiCorp, MidAmerican Energy and Nevada's NV Energy.

"The corporate winners have the market perception that the wind is at their back, otherwise why would the Fed buy our bonds?"

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