The Phaserl


Swiss Central Bank Holds $5.3 Billion in Amazon, Apple, Google, Facebook and Microsoft Stocks

by Pam Martens and Russ Martens, Wall Street On Parade:

At the end of the first quarter of this year, Switzerland’s central bank held $119.7 billion in publicly traded stocks. The Swiss National Bank’s (SNB) web site indicates that it is now allocating 20 percent of its foreign currency reserves to stock investing. Twelve days ago, SNB made its quarterly filing with the U.S. Securities and Exchange Commission showing large positions in individual U.S. stocks.

In just five tech names, SNB held over $5.3 billion with $1.489 billion invested in Apple; $1.2 billion invested in Alphabet, parent of Google; $1 billion in Microsoft; $803 million in Amazon and $741.5 million in Facebook.

Both Apple and Microsoft are among the 30 stocks that make up the Dow Jones Industrial Average (DJIA), a heavily watched gauge of the U.S. economy’s health. The Swiss National Bank owns over $1 billion in two other names in the DJIA: $1.17 billion in Exxon Mobil and $1.032 billion in Johnson & Johnson.

Swiss National Bank positions of $500 million or more that are components of the DJIA include: AT&T ($862 million); General Electric ($823 million); Verizon ($739.6 million); Procter & Gamble ($718 million); Pfizer ($644 million); Coca Cola ($582 million); and Chevron ($557 million).

Switzerland’s central bank has invested zero dollars in two DJIA components — the two big Wall Street banks, Goldman Sachs and JPMorgan Chase.

The Swiss National Bank is just one of more than a dozen central banks that are now investing in publicly traded stocks – a policy that looks like a train wreck in motion to quite a number of Wall Street veterans.

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2 comments to Swiss Central Bank Holds $5.3 Billion in Amazon, Apple, Google, Facebook and Microsoft Stocks

  • rich

    Why Some Life Insurance Premiums Are Skyrocketing

    But for life insurers — where more than three-quarters of the industry’s $6.4 trillion in invested assets are parked in bonds — low rates like these can be calamitous.

    But in recent years, even as low interest rates ate into the industry’s profits, some companies engaged in complex financial maneuvers that enabled them to pay hefty shareholder dividends. Normally, life insurers cannot pay shareholder dividends unless their balance sheets are flush. These maneuvers involve shifting a company’s future obligations to policyholders into special financial vehicles that do not appear on the insurer’s balance sheets.

    Many of the moves were made with the blessing of state regulators who, in some cases, waived accounting rules or also approved the dividends.

    For instance, one British company told investors in 2011 that it used techniques like these to navigate around “redundant” American insurance regulations requiring it to hold “excess” reserves for future claims. The firm’s American subsidiary, Banner Life Insurance, then sent the parent company “extraordinary dividends” totaling $785 million.

    But now some Banner policyholders are being told their monthly payments must rise as much as sixfold, prompting a lawsuit that accuses Banner of raiding customers’ accounts to pay the dividends.

    Having to Walk Away

    Similar problems are playing out in the long-term care insurance business, which has sold policies designed to pay for nursing homes, assisted-living facilities and home health. Today, however, long-term care insurers face accusations of badly underpricing their policies as costs skyrocket. Many have either left the industry or severely reduced benefits. The remaining players, contending with low interest rates, are getting state regulators across the country to approve big premium increases.

    In recent years, Transamerica has used a series of complex financial transactions to shift a large share of its obligations to policyholders into off-balance-sheet vehicles. That allowed it to send about $2 billion in “extraordinary dividends” to its corporate parent in the Netherlands, Aegon.

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