S&P 500 Earnings Season Update: August 7, 2026

 S&P 500 Earnings Season Update: August 7, 2026

**The strongest earnings season in five years has pushed the S&P 500 to record highs, with 85% of companies beating expectations. But beneath the headline numbers, a more complex story is unfolding—one of AI-driven concentration, widening margins, and a market that's beginning to reward "good enough" with skepticism.**

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## The Headline Numbers: A Blowout Season

Second-quarter 2026 earnings season has been nothing short of spectacular. With approximately 85% of S&P 500 companies having reported, the blended earnings growth rate for the index now stands at roughly **49% year-over-year**—the strongest quarterly gain since the second quarter of 2021 .

Here's what the numbers look like so far:

| Metric | Q2 2026 Value | Historical Context |

|--------|---------------|-------------------|

| **EPS Beat Rate** | 85% | Well above 10-year average of 76%  |

| **Revenue Growth** | ~15% YoY | Strongest pace since Q4 2021  |

| **EPS Growth** | ~49% YoY | Highest since Q2 2021  |

| **Aggregate EPS Beat** | 31.4% above estimates | Among the highest on record  |

| **Beat Rate (Ex-Tech)** | Broad-based | All 11 sectors positive, 8 in double digits  |

The beat rate of 85% is **well above the 10-year average of 77%** and represents the highest rate since the first quarter of 2021 . Revenues have also exceeded expectations at a higher-than-normal rate of roughly 77% .

## The Magnificent 7: Still Driving Growth, But the Lead Is Narrowing

The Magnificent Seven—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—remain the primary engine of S&P 500 earnings growth. Goldman Sachs data shows that the top 10 contributors to EPS growth, led by Alphabet (28%), Amazon (16%), Micron (10%), and Nvidia (9%), accounted for roughly 79% of the index's total EPS growth .

**However, a notable shift is underway.** Deutsche Bank strategist Binky Chadha noted that the contribution from megacap growth and tech has fallen "from 90% a year ago to 57%" . This is significant: the AI beneficiaries and the rest of the market are now nearly even in their contribution to earnings growth.

**The Magnificent Seven are on track to bring in more than 29% of all S&P 500 earnings this year**, up from 16.4% in 2020, and account for 32.7% of the index's market capitalization . While that concentration remains historically high, the trend toward broadening earnings growth is unmistakable.

## The AI Infrastructure Story: $182 Billion in Capex

Perhaps the most consequential development of this earnings season has been the massive capital expenditure announcements from hyperscalers. Alphabet, Amazon, and Microsoft reported combined second-quarter capital expenditures of **$182 billion** against roughly **$5 billion in free cash flow** .

**The numbers tell a stark story of financial engineering:**

| Company | Q2 Capex | Other Income | Free Cash Flow Impact |

|---------|----------|--------------|----------------------|

| **Alphabet** | ~$60B | $98B (unrealized gains) | Capex exceeds FCF significantly |

| **Amazon** | ~$60B | $53B (unrealized gains) | Funding gap filled with debt |

| **Microsoft** | ~$50B | $3B | Capex exceeds FCF significantly |

The total capex of these three companies reached $182 billion, funded largely through about **$51 billion in bond issuance and $50 billion in equity** . Goldman now forecasts hyperscaler capex will exceed **$1 trillion in 2027**, up 33% year-over-year .

## The "Other Income" Illusion: $151 Billion in Investment Gains

Here's where the headline growth numbers get complicated. Goldman Sachs estimates that of the S&P 500's 45% year-over-year EPS growth, approximately **19 percentage points came from "other income" at Alphabet and Amazon**—primarily unrealized gains on equity investments .

**Breaking down the Q2 EPS growth:**

| Component | Contribution |

|-----------|--------------|

| **Total Q2 EPS Growth** | **45%** |

| Less: "Other Income" (Alphabet + Amazon) | -19% |

| **Operating EPS Growth** | **~26%** |

Alphabet's other income for the single quarter was about **$98 billion**, and Amazon's was about **$53 billion**, mainly from the rise in value of equity investments in private companies . Microsoft added roughly $3 billion in other income .

Excluding these non-operating gains, S&P 500 EPS growth was about **26%**—still the fastest since 2021 and above the 20% recorded in the first quarter . But it's a reminder that the headline numbers are, in some cases, masking the true underlying profitability.

## Margins: The Hidden Driver of Earnings Growth

Widening profit margins have been a critical driver of this earnings season. According to Michael Walker of investment firm AllianceBernstein, **operating margins are fueling more than half of this year's earnings growth** .

| Contributor | Percentage Points |

|-------------|-------------------|

| Revenue Growth | 9.6 |

| Operating Margin Expansion | 13.5 |

| Taxes, Interest, Buybacks | 0.9 |

Walker's analysis shows that earnings growth driven by margins is at **13.5 percentage points**, while revenue growth accounts for just 9.6 points . This margin expansion is broad-based, with no single sector continuously increasing margins since 2021, but several enjoying rising margins for three consecutive years .

**There is a cautionary note.** Margin expansion cannot continue indefinitely. As companies approach limits on cost-cutting, additional streamlining produces diminishing gains. The peak operating profit margins realized in the late 1990s, 2007, and 2018 "preceded stretches of earnings disappointment" . Sustainable earnings growth requires revenue growth, not just margin expansion.

## The Market's Response: "Good Enough" Is No Longer Enough

One of the most notable trends this earnings season has been the market's muted reaction to earnings beats. Historically, S&P 500 companies that beat EPS estimates outperformed the index by about **95 basis points** the following day .

**This quarter, that premium fell to just 39 basis points** .

**The divergence is even more stark in tech:** Technology, media, and telecom stocks that beat estimates underperformed the S&P 500 by an average of **192 basis points** the day after reporting. Non-TMT beaters, however, outperformed by **75 basis points** .

Barclays echoed this observation, noting that "both beating and missing earnings expectations have led to a negative stock price reaction. This rare pattern suggests that investors had already priced in much of the good news" .

**The message is clear:** For AI leaders, investors have already priced in high growth expectations. Simple earnings beats are no longer sufficient to drive further stock price increases.

## Sector Performance: Energy and Tech Lead the Way

All sectors except health care are expected to post positive earnings growth in Q2 .

| Sector | Expected Q2 EPS Growth | Key Drivers |

|--------|------------------------|-------------|

| **Energy** | ~127% | Higher oil prices from Iran war  |

| **Information Technology** | ~91% | AI-driven demand, hyperscaler spending  |

| **Basic Materials** | ~50% | Higher commodity prices, infrastructure demand  |

| **Financials** | ~23% | Strong loan growth, resilient trading  |

| **S&P 500 (Overall)** | ~49% | Broad-based strength  |

The energy sector has been the biggest beneficiary of the Iran war, with higher commodity prices providing a significant tailwind. Technology remains the primary driver of overall index earnings growth, but the improvement is now broad-based .

## What's Next: Guidance and Revisions

Corporate guidance has leaned constructive. Of the S&P 500 companies that have issued guidance, **34 have provided positive third-quarter EPS guidance** compared to 20 providing negative guidance .

Earnings expectations have improved dramatically throughout the reporting season :

| Period | Expected Q2 EPS Growth |

|--------|------------------------|

| **End of June** | ~23% |

| **July 31** | ~47% |

| **August 7** | ~49% |

Deutsche Bank has raised its 2026 EPS forecast to **$358** (from $342) and its 2027 estimate to **$420** (from $390), implying growth of 28% and 17%, respectively .

## The Human Element: What This Means for Investors

For American investors, this earnings season tells a story of a market at a crossroads:

- **The AI story is real.** Hyperscaler capex is hitting record levels, and AI demand is converting into cloud revenue .

- **But the financing gap is widening.** The $182 billion in capex against $5 billion in free cash flow raises questions about sustainability .

- **The market is getting pickier.** Companies that merely beat estimates are not being rewarded the way they used to be .

- **Breadth is improving.** Growth is broadening beyond the Magnificent Seven, with small-cap earnings expected to outpace large-cap by 2027 .

As Tom Siomades, chief market economist at AE Wealth Management, put it: "The market should be reacting to weak job numbers and higher inflation and the possibility of a slow-growth economy that may need to have rates raised rather than cut, and yet it's not. We're setting records, so go figure" .

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## Frequently Asked Questions

### Q: How much did S&P 500 earnings grow in Q2 2026?

A: The blended earnings growth rate for the S&P 500 in Q2 2026 is approximately **49% year-over-year**, the strongest quarterly gain since Q2 2021 .

### Q: What percentage of companies beat earnings expectations?

A: Approximately **85%** of S&P 500 companies have beaten EPS estimates, well above the 10-year average of 76% .

### Q: What is the "other income" issue?

A: Roughly 19 percentage points of Q2 EPS growth came from unrealized investment gains at Alphabet and Amazon rather than core operating earnings . Excluding these, EPS growth was about 26%.

### Q: Why is the market not rewarding earnings beats as much this quarter?

A: Investors had already priced in much of the good news. Beating earnings estimates this quarter has resulted in a smaller stock price bump than historically—about 39 basis points vs. the historical average of 95 basis points .

### Q: Which sectors are leading earnings growth?

A: Energy (127% EPS growth), Information Technology (91%), and Basic Materials (50%) are the top performers .

### Q: What is the outlook for the second half of 2026?

A: Deutsche Bank raised its 2026 EPS forecast to $358 (up from $342) and its 2027 estimate to $420 (up from $390), implying 28% and 17% growth respectively .

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## Conclusion: Record Growth, But Questions Remain

The Q2 2026 earnings season has been exceptional by any measure. The S&P 500's 49% earnings growth, 85% beat rate, and record highs reflect a corporate sector that is delivering in ways that seemed unlikely at the start of the year.

But beneath the headline numbers, questions linger. The AI infrastructure buildout is driving a financing gap that will eventually need to be addressed. "Other income" has inflated reported earnings for some of the largest companies. The market is becoming more skeptical, rewarding earnings beats less than in the past.

Yet the underlying story is one of remarkable resilience. Even excluding one-time investment gains, S&P 500 earnings are still expected to grow **25.5% in 2026**, the strongest pace outside the 2021 COVID rebound . Earnings growth is broadening beyond the Magnificent Seven, with all sectors except health care posting positive growth and small caps expected to outpace large caps by 2027 .

As one analyst put it: "If you're an earnings watcher, you know these results are about as good as it gets" .

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## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. Earnings estimates, beat rates, and forward-looking projections are subject to revision and change. Past performance is not indicative of future results. You should consult with a qualified financial advisor before making any investment decisions.

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*Published: August 8, 2026*

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**Tags:** S&P 500 earnings, Q2 2026 earnings, earnings season, stock market analysis, corporate earnings, EPS growth, Magnificent Seven, AI infrastructure, hyperscaler capex, earnings beats, sector performance, market outlook, investment strategy, financial news, Wall Street

"Evidence Box": How Scammers Are Stealing $100M in Gold Bars from American Seniors

 "Evidence Box": How Scammers Are Stealing $100M in Gold Bars from American Seniors

## The NYPD has investigated over 100 cases in two years, with losses exceeding $100 million. Here's how the scheme works—and how to protect your family.

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### Introduction: The Pop-Up That Cost a Life's Savings

It starts with a pop-up on a computer screen. A warning that looks like it's from Microsoft, claiming the computer is infected with a virus. A phone number to call for help. That call leads to remote access, fake investigations, and a terrifying claim: the victim's bank accounts have been compromised. The only way to save the money? Convert it into gold bars and hand them over to a "courier" for "safekeeping."

It sounds like an elaborate fiction. But according to the NYPD's Financial Crimes Task Force, this exact scheme has stolen more than **$100 million** from seniors over the past two years . In one case, a victim lost **$9.8 million** in gold bars . In another, a Manhattan woman handed over **$9 million** . The scammers are methodical, cruel, and increasingly sophisticated.

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### How the Scam Works

The gold bar scheme is a multi-stage fraud designed to exploit fear and create a false sense of urgency . It unfolds in several steps:

#### The Initial Bait: A Fake Computer Alert

The scam begins with a pop-up message on the victim's computer. It often resembles a legitimate cybersecurity warning from Microsoft or another major tech company, claiming that the computer is infected or that the user's information has been compromised . The pop-up urges the victim to call a phone number to resolve the issue .

#### Gaining Control and Building the Narrative

When the victim calls, a scammer posing as a tech support representative answers. They coerce the victim into providing remote access to their computer, which allows the scammers to view files, access financial information, and even use the victim's webcam . The scammers may create fake "evidence" of hacking or identity theft on the victim's computer to further the illusion.

#### The "Investigation" and the Gold Bar Solution

The victim is then connected to another scammer posing as a law enforcement officer—sometimes claiming to be from the U.S. Treasury Department, the Federal Trade Commission, or the local police . The fake officer claims the victim's bank accounts have been compromised by an insider and that their money is in immediate danger. To "protect" the funds, the victim must withdraw their savings and purchase physical gold bars or coins. The scammers claim this is standard government procedure to secure assets.

#### The Handoff: "Evidence Box"

Victims are instructed to purchase gold bars from legitimate dealers. They are then told to place the gold in a cardboard box—often labeled "Evidence Box" at the scammers' direction—and await a "courier" who will collect it . A code word or number is often used to confirm that the handoff is legitimate . The victim is sworn to secrecy, warned not to tell family members or bank employees, and told that any deviation could jeopardize the "investigation" .

#### The Money Laundering Network

The couriers, often recruited from overseas or part of organized criminal networks, collect the gold and disappear. The gold is then sold or melted down, making it almost impossible to trace.

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### The Human Toll

The emotional and financial devastation is immense. One victim, a woman who lost her life savings, described to NYPD Detective Emilio Gomez how she was ready to retire but now lives "paycheck to paycheck" . New York Attorney General Letitia James, who issued a consumer alert on the scam, called it "flat-out cruel" .

**Key Impacts:**

- **More than 100 cases** investigated by the NYPD's Cyber Investigations Group.

- **Total losses exceeding $100 million**, with a single victim losing **$9.8 million** .

- **Hundreds of victims** across the U.S. have been impacted .

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### Who Is Being Caught?

Law enforcement is actively working to dismantle these networks. Recent arrests demonstrate the transnational nature of the scheme:

- **Yongxian Huang**, 24, of New York, was sentenced to over two years in prison for his role in a six-figure scam targeting an elderly Bethesda, Maryland couple .

- **Chu Lin, 50**, and **Xiean Cheng, 42**, were arrested in Washington D.C. for attempting to collect over $200,000 in gold bars from an 85-year-old man .

- **Harsh Fojalal Shah, 25**, an Indian national, was arrested in Hawaii for allegedly acting as a courier in a $137,000 gold bar scheme. He admitted to conducting approximately ten similar pickups from older adults .

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### How to Protect Your Family

Experts from the NYPD, the Department of Justice, and the New York Attorney General's office offer clear guidance :

1.  **Hang Up and Log Off:** If a pop-up appears, do not call the number. Simply log off your computer or shut it down. This is the most effective way to stop the scam.

2.  **Never Give Remote Access:** Legitimate companies and government agencies will never ask for remote access to your computer. Never give control to an unknown individual.

3.  **Verify Independently:** If someone claims to be from your bank, the IRS, or the police, hang up and call the official customer service number from your bank statement or a government website. Do not use the number provided in the pop-up or call.

4.  **Beware of Urgency:** Scammers create a false sense of urgency. If someone is pressuring you to act immediately, it is a red flag. Slow down and talk to someone you trust.

5.  **Talk to Your Family:** Have a conversation with older relatives about this scam. Make sure they understand that no legitimate government agency will ever ask them to convert their savings into gold bars.

6.  **Monitor Accounts:** If you have access to a senior's accounts, watch for large, unusual withdrawals.

### What to Do If You Think You've Been Targeted

- **Report it:** Contact your local police precinct. In New York, you can call the NYPD's Financial Crimes Task Force.

- **File a complaint:** You can file a complaint with the Office of the Attorney General at 1-800-771-7755 or online .

- **Contact Crime Stoppers:** You can submit an anonymous tip at 800-577-TIPS (for Spanish, dial 888-57-PISTA) or online at crimestoppers.nypdonline.org .

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### Frequently Asked Questions

**Q: What should I do if a pop-up appears on my computer claiming it's infected?**

A: Do not call the number on the pop-up. Simply log off your computer or shut it down. Logging off "solves every issue you have" .

**Q: Would a legitimate agency ever ask me to buy gold bars?**

A: No. No legitimate law enforcement agency, bank, or government entity will ever ask you to purchase gold bars or coins to "protect" your money . This is a scam.

**Q: Why would a scammer want gold bars instead of cash?**

A: Gold is a nearly untraceable commodity. Once the bars are collected, they can be easily sold, melted down, and resold, making it very difficult for law enforcement to trace the money.

**Q: What does "remote access" mean and why is it dangerous?**

A: Remote access allows the scammer to view and control your computer from a remote location. This gives them access to your files, financial information, and potentially your bank accounts .

**Q: Who do these scams target?**

A: The scammers primarily target seniors in their 60s to 90s, who often have significant retirement savings and may be less familiar with current technology scams .

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### Conclusion

The gold bar scam is a devastating fraud that preys on fear and trust. As Attorney General Letitia James stated, "The best way to combat this is to hang up and contact someone you trust" . Spread awareness, protect your loved ones, and remember: the call is the scam.

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### Disclaimer

This article is for informational and educational purposes only and does not constitute financial, investment, legal, or professional advice. The information contained herein is based on publicly available sources as of August 2026. Law enforcement investigations are ongoing, and the details of these scams may evolve. If you suspect you or a loved one have been targeted, please contact local law enforcement immediately.

Lloyd Center Closes After 66 Years: The End of an Era for Portland's Iconic Mall

 

Lloyd Center Closes After 66 Years: The End of an Era for Portland's Iconic Mall

On August 8, 2026, Portland's Lloyd Center—a landmark that defined the city's retail landscape for over half a century—officially closed its doors. The closure marks the end of an institution that was once the largest shopping center in the nation, a beloved community gathering place, and the site of the country's first indoor mall skating rink .

## A History Written in Concrete and Caramel Corn

When Lloyd Center opened on August 1, 1960, it was a celebration of mid-century ambition. Mayor Terry Schrunk cut a 100-foot ribbon as 700 homing pigeons were released to carry news of the event to dozens of Northwest cities . The mall was the culmination of a decades-long dream by California oil baron Ralph Lloyd, who had begun buying up eastside Portland real estate in the 1920s with the vision of building an "alternate downtown" .

At its debut, Lloyd Center boasted 1.2 million square feet of rentable space and over 80 stores, making it the nation's largest urban shopping center—a distinction that, while short-lived, cemented its place in retail history . It wasn't just a place to shop; it was a destination. Families flocked from across the region to visit its open-air ice rink, the first of its kind in a U.S. shopping mall, where a young Tonya Harding famously first learned to skate .

For decades, Lloyd Center thrived. Generations of Portlanders have memories of scampering up its spiral staircase, enjoying a meal at the restaurant overlooking the ice rink, or browsing its eclectic mix of stores . It was a place where teenagers loitered, where holiday visits with Santa were a tradition, and where the community found a shared living room.

## The Long Decline

The seeds of Lloyd Center's closure were planted in the changing retail landscape of the late 20th and early 21st centuries. The rise of online shopping and the downsizing of department store chains took a heavy toll. Anchor stores like Nordstrom and Sears departed, and a series of expansions and renovations proved insufficient to reverse the decline .

By 2020, the mall's fate was sealed. The COVID-19 pandemic further accelerated the exodus of shoppers and tenants. In 2021, the last anchor store closed, and the mall entered foreclosure . Its ownership was eventually transferred to a consortium led by Urban Renaissance Group (URG) and KKR Real Estate, who saw the mall's future not as a shopping destination but as a site for something new.

## A Final Farewell

The final weeks and days of Lloyd Center were a poignant mix of sadness, nostalgia, and celebration. As the closure date approached, community members organized a slate of farewell events, including a "Prom on Ice" where skaters donned formal attire, a final retro fitness "Food Court 5000" walk, and a final skate led by a couple who had frequented the rink for nearly six decades .

The closure left a deep emotional impact on the community. For some, it was the loss of a "safe space for weirdos" where niche communities, like the Beyblade club, found a home . For others, it was a profound personal loss.

"I'm kind of sad to say that this place is going to shut down permanently. It's been a childhood for me," said Krisine Menbioro, acting manager of Trend Shoes, a tenant for over 20 years . For longtime shopper Paul Braukmann, who has been coming to Lloyd Center since 1960, "finding a replacement will not be easy" .

## What Comes Next: A New Neighborhood

While the mall's closure marks the end of an era, it is also the beginning of a new chapter. Urban Renaissance Group plans to transform the 29-acre property into a massive mixed-use neighborhood .

The redevelopment plan calls for:

- Up to **5,000 new apartments** to help address Portland's housing shortage.

- A reconnected street grid to better link the site with the surrounding neighborhood.

- A new pedestrian promenade, courtyards, plazas, and a **2.3-acre park**.

- Space for new businesses and a potential corporate campus .

The plans have been controversial, with groups like "Save Lloyd" and the "Save Lloyd Ice Coalition" fighting to preserve the mall, and particularly its iconic ice rink . Despite hours of testimony, the Portland City Council rejected an appeal in July, clearing the way for demolition . The new music venue being constructed in the former Nordstrom site is a first step in that transformation .

## The Human Element: A Place Beyond Shopping

The closure of the Lloyd Center is a reminder that malls are more than just retail spaces; they are a "third place"—a vital community space outside of home and work where people gather, build memories, and create a shared identity .

As Kye Grant of the Save Lloyd group poignantly stated, "Lloyd has a personality, a soul and a beating heart. There’s no other place in the city, or maybe even the world, that brings people together under one roof like Lloyd does" .

The Lloyd Center's story is a classic American tale of rise, decline, and reinvention. The ghosts of its past will linger in the memories of the Portlanders who loved it, but the space it occupied is poised to become a living part of the city's future.

## Frequently Asked Questions

**Q: Why is Lloyd Center closing?**

A: Lloyd Center is closing because it is no longer economically viable. For years, the mall has struggled with high vacancy rates—nearly 90%—and the loss of major anchor stores. The current owners plan to redevelop the site into a mixed-use neighborhood, which will involve demolishing the existing mall structure .

**Q: What was special about the Lloyd Center?**

A: When it opened in 1960, it was the largest shopping center in the U.S. It was also home to the first indoor shopping mall ice skating rink in the country, where notable figures like Tonya Harding first learned to skate. For decades, it was a beloved gathering place for families and the community .

**Q: When will the demolition happen?**

A: The mall closed to the public on August 8, 2026. The exact timeline for demolition has not been confirmed, but redevelopment is expected to be a long process, with some describing it as a "construction zone—at best—for a decade" .

**Q: What will replace the mall?**

A: The owners plan to build a new mixed-use neighborhood on the site. The plan includes up to 5,000 apartments, a reconnected street grid, parks, plazas, and new commercial spaces.

**Q: Will the ice rink be saved?**

A: The current redevelopment plan does not include preserving the ice rink. It will be demolished as part of the project. Despite community efforts to save it, an appeal to the City Council was rejected in July .

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## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only. The information contained herein is based on publicly available sources and reflects the author's understanding as of August 8, 2026. Redevelopment plans, construction timelines, and specific project details are subject to change. The closure and demolition of the mall, as well as the future of the site, are subject to ongoing processes that may be modified.

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*Published: August 8, 2026*

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**Tags:** Lloyd Center, Portland, mall closure, redevelopment, Urban Renaissance Group, ice rink, Portland history, shopping mall, mixed-use development, community gathering, KKR

The $1.45 Trillion Warning: How Scott Bessent's Financial Engineering Is Masking a Looming Debt Crisis

 The $1.45 Trillion Warning: How Scott Bessent's Financial Engineering Is Masking a Looming Debt Crisis

## The Treasury Secretary is using a short-term fix to fund America's $2 trillion deficit. A secret advisory committee just warned it could blow up by 2028.

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### Introduction: The "Groundhog Day" Strategy That's Running Out of Time

For more than a year, the U.S. Treasury has operated under a predictable, if controversial, issuance strategy. Secretary Scott Bessent has leaned heavily on short-term Treasury bills—essentially, government IOUs that come due in a year or less—to finance a roughly $2 trillion annual deficit . This approach has kept reported borrowing costs artificially low, with three-month bills yielding around 3.8% compared to 4.6% for 10-year notes and more than 5% for 30-year bonds .

But on August 5, 2026, a little-noticed warning from a group of Wall Street bankers sent a chill through the financial world. The Treasury Borrowing Advisory Committee—a panel of senior bond dealers and investors that advises the Treasury on its own funding—warned that at current auction sizes, the government faces a **$1.45 trillion funding shortfall in fiscal 2027–28** .

The strategy, to be clear, didn't start with Bessent. It was Janet Yellen, his predecessor, who first leaned hard on short-term bills to help fund the deficit, and at the time, Bessent was among her sharpest critics. In 2024 he supported an influential analysis that accused Yellen's Treasury of "activist Treasury issuance": flooding the market with bills to hold down long-term yields and flatter the economy ahead of the election . Now Bessent occupies her chair and is doing much the same thing.

The difference? The bill-heavy strategy is meeting its end. With roughly one-third of all outstanding U.S. debt—approximately $10 trillion—set to mature within the next 12 months, the Treasury faces a reckoning . And the bond market is beginning to push back .

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## The Yellen Era: How Short-Term Borrowing Became the Norm

To understand what Bessent is doing, you have to understand what he inherited. Former Treasury Secretary Janet Yellen's tenure was defined by a tactical tilt toward short-term Treasury bills. The strategy relied on the massive liquidity of money-market funds—now totaling approximately $7.6 trillion—to absorb high volumes of T-bills .

While this kept long-term borrowing costs from spiking, critics argue it left the government's debt costs dangerously vulnerable to sudden rate swings and shifts in market sentiment. Key metrics at a glance :

- **Annual Deficit:** Approximately $2 trillion

- **Money Market Liquidity:** $7.6 trillion pool currently absorbing bills

- **The 2026 "Debt Wall":** Roughly one-third of all outstanding U.S. debt—approximately $10 trillion—is set to mature within the next 12 months

### The Irony of Bessent's "Flip-Flop"

Bessent himself was among the sharpest critics of this strategy. In 2024 he supported and amplified an influential analysis by economists Stephen Miran and Nouriel Roubini that accused Yellen's Treasury of "activist Treasury issuance": flooding the market with bills to hold down long-term yields and flatter the economy ahead of the election .

Now Bessent occupies Yellen's chair and is doing much the same thing, while Miran himself works inside the Trump administration. The strategy, to be clear, didn't start with Bessent—but he's now its chief defender.

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## The Bessent Era: Masking the Problem with "Financial Engineering"

### The 3-3-3 Plan

Secretary Bessent's entry signaled the end of the status quo. While he initially maintained Yellen's guidance to avoid immediate market shocks, he is now prioritizing a growth-oriented framework known as the 3-3-3 Plan :

- **3% GDP Growth:** Driven by deregulation and the "One Big Beautiful Bill," which aimed to make 2017 tax cuts permanent

- **3% Deficit Target:** An ambitious goal to slash the federal deficit to 3% of GDP by 2028

- **3 Million Extra Barrels of Oil:** A push for energy independence to lower the "inflationary floor" and reduce federal interest expenses

### The Deficit Math

The problem is that the government's own budget projections do not currently support a 3% deficit target. The Congressional Budget Office projected in February that the federal deficit will reach $1.9 trillion, or 5.8% of GDP, in fiscal year 2026—and will not fall below 5.6% of GDP at any point over the next decade .

The federal government is projected to spend more than $1 trillion on interest payments alone in fiscal year 2026, more than all discretionary defense spending. By 2036, CBO projects annual interest costs will reach $2.1 trillion, approaching the total projected cost of all discretionary federal spending that year .

### The $1.45 Trillion Shortfall

The TBAC's warning is the most concrete signal that Bessent's strategy is running out of road. The committee warned that at current auction sizes, the government faces a $1.45 trillion funding shortfall in fiscal 2027–28 .

What that means takes a primer to understand how Washington actually borrows. The Treasury doesn't take out one huge annual loan; rather, it raises cash by selling debt at regularly scheduled auctions. The shortest-dated IOUs, sometimes called "T-bills," come due in a year or less, while the longer-dated notes and bonds—known as "coupons"—run anywhere from two to 30 years .

The T-bills offer Washington a rare opportunity to borrow money for cheap. At the time of writing, the three-month bill yielded around 3.8%, while the 10-year Treasury yield sat around 4.6%, and the 30-year at a multi-decade high above 5%. So what Bessent has done is lean unusually hard on the cheaper rate today to finance a roughly $2 trillion annual deficit. That holds down reported borrowing costs but leaves the government more exposed to inflation and rising rates .

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## The Human Element: Why This Matters to Every American

For most Americans, the abstraction lands in a concrete place: mortgage rates, which are benchmarked to Treasury yields and sit above 6% while much of the developed world pays closer to something like 4% . The government's total debt on interest alone now runs over $1 trillion annually, more than the United States spends on national defense .

Jon Hilsenrath, the veteran Federal Reserve watcher who spent decades at The Wall Street Journal and now runs his own advisory firm, Serpa Pinto Advisory, puts it bluntly :

> "If there are cracks that show up in the financial system over the next few years, I've been expecting them to show up in Treasury debt. If you look at any serious financial crisis, all you've got to do is follow the debt."

In 2008, that meant mortgages, but today, Hilsenrath argues, "all the growth has been in federal debt."

The even bigger problem, Hilsenrath says, is a collision taking shape between the Treasury and the Fed. Just as Treasury is likely forced back toward longer-term bonds, the Fed under new Chair Kevin Warsh is moving to shrink its own balance sheet. The TBAC minutes note dealers expect the Fed's holdings to drift toward shorter maturities and more bills—and Hilsenrath says a Warsh-appointed new Fed committee, due to report on the balance sheet in December, will almost certainly conclude the Fed is overstocked on long-term Treasuries and must wind them down. That would mean two waves of long-term supply, converging, with fewer buyers .

> "It always comes back to fundamentals," Hilsenrath said. "Trump and a new Congress came into power and chose not to do anything about the deficit."

### The "Frog in Boiling Water" Warning

Hilsenrath offers a chilling metaphor for the slow-motion crisis :

> "We are slowly boiling ourselves like a frog."

Foreign holders like Japan and China have been slowly diversifying into gold rather than dumping bonds or fully "selling America," he noted—which buys Washington politicians time but keeps deferring the problem.

---

## The Collision Course: The Fed's Balance Sheet and the Debt Wall

Just as Treasury is likely forced back toward longer-term bonds, the Fed under new Chair Kevin Warsh is moving in the opposite direction. The TBAC minutes note dealers expect the Fed's holdings to drift toward shorter maturities and more bills .

Hilsenrath says a Warsh-appointed new Fed committee, due to report on the balance sheet in December, will almost certainly conclude the Fed is overstocked on long-term Treasuries and must wind them down.

That would mean two waves of long-term supply, converging, with fewer buyers .

### The "Bessent Put"

The former hedge fund manager has developed a reputation for tamping down sharp market moves. Vishal Khanduja at Morgan Stanley Investment Management is among those labeling him a "volatility seller." President Donald Trump put it more simply in October: "He soothes the markets" .

But the $31 trillion Treasuries market has appeared less than soothed since Trump took the US to war against Iran, sending energy costs sharply higher and boosting inflation. The 10-year yields that Bessent has focused on as his key market metric have soared over half a percentage point in that period, while 30-year bond rates have touched the highest levels since 2007 .

"The 'Bessent put' refers to a belief that Treasury could shift issuance to the front end," said Priya Misra, a portfolio manager at JPMorgan Asset Management .

---

## What's Next: The Options—and Their Limits

Bessent has a few tools at his disposal, but none appear to be a "silver bullet" :

### 1. Buybacks

The Treasury has already repurchased about $2.8 billion of its own debt in a routine buyback operation in January 2026, targeting older Treasury securities maturing in 2028 and 2029 . The goal is to improve liquidity rather than reduce overall debt.

But buybacks are limited in scale. The buyback program is now a standard part of how the Treasury manages its debt, alongside regular auctions and issuance plans . However, these buybacks do not meaningfully reduce the national debt, and they do not change the long-term fiscal outlook .

### 2. Shifting Issuance to the Front End

Bessent could continue leaning on short-term bills, but the strategy is running out of room. The Treasury General Account—the cash balance at the Federal Reserve—is being built up to about $900 billion by the end of June and about $1 trillion by the end of July .

### 3. The GENIUS Act

The administration is attempting to create new demand sinks for government debt. The GENIUS Act creates a structural demand for Treasuries by requiring stablecoin issuers to back their digital assets with U.S. government securities. Bessent predicts this could create up to $1 trillion in fresh demand for T-bills, potentially allowing the Treasury to pivot other issuance toward long-term "coupon" debt .

### 4. "Economic Statecraft"

The administration is countering these pressures through "Economic Statecraft," attempting to find new demand sinks for government debt. Bessent has shown creativity in confronting other market challenges: authorizing a rate-check to help Tokyo stanch a slide in the yen, engineering a swap for Argentina in an ultimately successful effort to support the peso, and reportedly discussing potential intervention in oil contracts .

## Frequently Asked Questions

**Q: What is the $1.45 trillion shortfall warning from TBAC?**

A: The Treasury Borrowing Advisory Committee—a panel of senior bond dealers and investors that advises the Treasury on its own funding—warned that at current auction sizes, the government faces a $1.45 trillion funding shortfall in fiscal 2027–28 . This means the Treasury will struggle to roll over the roughly $10 trillion in debt coming due in the next 12 months.

**Q: Why is the Treasury using short-term bills instead of long-term bonds?**

A: Short-term bills offer cheaper borrowing costs—about 3.8% for three-month bills compared to 4.6% for 10-year notes and above 5% for 30-year bonds . This holds down reported borrowing costs but leaves the government more exposed to inflation and rising rates.

**Q: How does this affect me?**

A: For most Americans, the abstraction lands in a concrete place: mortgage rates, which are benchmarked to Treasury yields and sit above 6% while much of the developed world pays closer to 4% . The government's total debt on interest alone now runs over $1 trillion annually, more than the United States spends on national defense .

**Q: What is the GENIUS Act?**

A: The GENIUS Act creates a structural demand for Treasuries by requiring stablecoin issuers to back their digital assets with U.S. government securities. Bessent predicts this could create up to $1 trillion in fresh demand for T-bills, potentially allowing the Treasury to pivot other issuance toward long-term debt .

**Q: Who is Scott Bessent?**

A: Scott Bessent is the U.S. Treasury Secretary under President Trump. He is a former hedge fund manager who worked under George Soros and Stanley Druckenmiller, helping engineer the bet that "broke the Bank of England" in 1992. He has a reputation as a "volatility seller" who soothes markets .

**Q: What is the "3-3-3 Plan"?**

A: Bessent's growth-oriented framework includes: 3% GDP growth driven by deregulation, a 3% deficit target by 2028, and 3 million extra barrels of oil per day to lower the "inflationary floor" and reduce federal interest expenses .

---

## Conclusion: The "Yellen-Era" Shelter Has Been Dismantled

The Bessent-era strategy is a high-wire act. By leaning heavily on short-term bills, he is buying time—but at a cost. With $10 trillion in debt rolling over in a higher-rate environment, the Treasury's ability to maintain "steady" auction sizes is reaching a breaking point .

The TBAC's $1.45 trillion warning is the canary in the coal mine. If the Treasury is forced to issue more long-term debt at higher rates, it could crowd out private investment, push mortgage rates even higher, and accelerate the debt spiral.

As Hilsenrath put it: "It always comes back to fundamentals. Trump and a new Congress came into power and chose not to do anything about the deficit."

The former hedge fund manager is now dancing with the market he once traded against. The question is whether he can keep the rhythm—or whether the music is about to stop.

--Read more-

## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. Government debt, Treasury yields, and fiscal policy are subject to rapid change. Past performance is not indicative of future results. You should consult with a qualified financial advisor before making any investment decisions.

New Mexico Court Orders Meta to Pay $567M Over Child Mental Health Harm in Landmark "Public Nuisance" Ruling

 New Mexico Court Orders Meta to Pay $567M Over Child Mental Health Harm in Landmark "Public Nuisance" Ruling

**The state judge also mandated sweeping changes to Facebook and Instagram for young users, including time limits, notification bans, and default private accounts—the first time a U.S. court has held a social media giant liable for creating a "public nuisance" through its product design. The total exposure for Meta now exceeds $942 million in this case alone, with the company vowing to appeal.**

## The Ruling That Could Reshape Social Media

On August 6, 2026, a New Mexico state judge delivered a historic ruling against Meta Platforms, ordering the social media giant to pay **$567 million** and implement sweeping changes to Facebook and Instagram to protect young users . The decision marks the first time a U.S. court has held that a social media company can be sued, tried, and held financially and structurally accountable for building products that endanger children .

Judge Bryan Biedscheid ruled that Meta's platforms constitute a **"public nuisance"** under New Mexico law, rejecting the company's claim that Section 230 shielded it from liability . "Although Meta is not alone in this regard, its social media platforms are a significant contributing factor to the current mental health crisis among New Mexico's youth," the judge wrote .

The ruling came in the second phase of a two-part trial. In March 2026, a jury had already found that Meta violated the state's Unfair Practices Act by misrepresenting the safety of its platforms for children, imposing a **$375 million** civil penalty . Combined, Meta's total financial exposure in New Mexico now stands at **$942 million** .

New Mexico Attorney General Raúl Torrez hailed the decision as a "historic moment." "Meta built products it knew would fuel addiction, deepen a youth mental health crisis, and expose children to sexual exploitation, then lied to parents and policymakers about the danger," Torrez said. "Today, it pays for that choice" .

## How the $567 Million Will Be Used

The bulk of the $567 million payment—**$420 million**—will be allocated to mental health treatment services for young people affected by social media harm . The remaining funds will go toward awareness and prevention programs, screening services, referrals and care coordination, and program oversight over the next five years .

The breakdown includes $33 million for prevention and awareness, $90 million for screening and assessment, $15 million for referrals and care coordination, $420 million for treatment, and $9 million for program oversight and evaluation .

## Sweeping Changes to Facebook and Instagram for Young Users

Beyond the financial penalty, the court ordered Meta to implement extensive reforms that will remain in effect for **five years** under court supervision . These are among the most significant restrictions ever imposed on a social media platform for the protection of minors .

### For New Mexico Users Under 18:

- **Time limits**: Users under 18 are limited to **90 hours per month** on Instagram and Facebook (approximately three hours daily on average) .

- **Notification restrictions**: Push notifications are **blocked from 8 a.m. to 3 p.m.** on weekdays during the school year and from **10 p.m. to 7 a.m.** on all other days .

- **Default private accounts**: Teen accounts in New Mexico must be set to **private by default** .

- **Hidden "like" counts**: Public "like" counts must be hidden for users under 18 .

- **Age verification improvements**: Meta must continue to improve age assurance tools, including developing an AI-based "under-13-years-of-age prediction model" within two years .

### For Users Under 13:

- **Account deletion**: Meta must delete the accounts of users determined to be under 13, along with all personal information collected from those accounts .

- **Enhanced age detection**: Meta must request proof of age for users it estimates to be under 13 and treat them as under 18 until age is verified .

### Additional Requirements:

- **Banner and informational screens**: Facebook and Instagram must build and display screens that clearly explain protection features, best practices, and tools to address inappropriate content .

- **Reporting portal**: Meta must partner with schools or a child safety organization to create a portal where school staff can flag users who may be under 13 .

- **Semi-annual compliance reports**: Meta must file public reports with the court twice a year documenting its progress .

The court noted that federal children's privacy laws (COPPA) prevent Meta from applying hard age-verification tools that require children to submit personal data, and that singling out Meta for such requirements would be "inequitable and unduly injurious" to the company .

## The Evidence: Features Designed to Hook Kids

The court's ruling was based on extensive testimony and evidence showing that Meta intentionally designed its platforms with features that keep users—especially teenagers—engaged longer .

Judge Biedscheid found that features such as **endless scrolling, autoplay, push notifications, "like" counts, and algorithmic content recommendations** were deliberately designed to capture and boost engagement, contributing to higher rates of depression, anxiety, self-harm, eating disorders, and suicide risk among young people .

The court also found that Meta's platforms contributed to **child sexual exploitation** and placed added pressure on schools, law enforcement, and New Mexico's mental health system .

"The harmful effects of Meta's platforms on children do not stay contained by its platforms," the judge said during the ruling. "Instead, [they] migrate to the internet as a whole and, perhaps most concerning, to the real world and create a common, societal burden on and harm to the affected children and their families and schools, as well as hospitals and law enforcement" .

## Meta's Response: "We Disagree and Will Appeal"

Meta has vowed to appeal the ruling, arguing that the decision misrepresents the company's efforts to protect young users .

"We work hard to keep people safe on our platforms and have been transparent about the challenges of identifying and removing bad actors and harmful content," a Meta spokesperson said. "We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts" .

Meta has argued that teen mental health is "profoundly complex" and cannot be linked to a single app . The company also points to the more than 30 safety tools it has introduced for teens and families in recent years .

The appeals process is expected to play out over months or years, but Attorney General Torrez said his office would "be pressing the court to order the payment of these funds as quickly as possible" . "The longer we wait, the more harm is done to our kids," he added .

## The Bigger Picture: A Turning Point in Social Media Litigation

The New Mexico ruling represents a watershed moment in the legal battle over social media's impact on children. It was the **first time** a U.S. court has found a social media company guilty of creating a "public nuisance" through its product design .

The ruling comes amid an avalanche of lawsuits against Meta from thousands of families, dozens of states, and school districts across the country . More than 30 states are suing Meta over similar allegations .

Meta is also gearing up for a trial later this month in federal court in Oakland, California, where it will face the first four of 29 states that sued it in a federal multi-district lawsuit filed in 2023 for contributing to the youth mental health crisis . Eight states, including Tennessee, have filed lawsuits in their own state courts .

Late last month, Meta, along with TikTok, Snap, and Google's YouTube, were sued by the families of four teenagers who died by suicide over what they describe as "years of escalating harms" from using their platforms .

## The Human Element: A Victory for Parents and Kids

For New Mexico Attorney General Raúl Torrez, the ruling is personal. "Today's decision is a victory for every parent who has worried about what social media is doing to their child and every child who deserves to grow up safer online," he said .

Amnesty International USA also praised the ruling, calling it "an important step towards creating safer social media for children and young people" . "By ordering changes to platform features, the ruling recognizes that the harms children experience online are often the result of deliberate design choices," said Justin Mazzola, Deputy Director of Research at Amnesty International USA .

Torrez announced he intends to close the remaining regulatory gaps through legislation, starting with a comprehensive social media safety bill in the New Mexico Legislature that would mandate age verification for platforms operating in the state .

"A courtroom can punish what already happened. Only a law can stop it from happening again," Torrez said .

## Frequently Asked Questions

### Q: Why did the New Mexico court order Meta to pay $567 million?

The court found that Meta's platforms—Facebook and Instagram—constitute a **"public nuisance"** in New Mexico and that the company's product design contributed to a youth mental health crisis. The money will fund treatment services, prevention programs, and other measures for children harmed by social media .

### Q: Does this ruling affect users outside New Mexico?

The ruling applies specifically to **New Mexico residents**. However, the changes to Meta's platforms—such as default private accounts, hidden "like" counts, and notification restrictions—are being implemented for New Mexico users only. Meta has not indicated it will extend these changes nationwide .

### Q: What is Meta's total financial exposure in this case?

Meta has now been ordered to pay a **total of $942 million** in New Mexico: $375 million in civil penalties from the March jury verdict plus $567 million in the August ruling .

### Q: Will Meta appeal the ruling?

Yes. Meta has stated it "disagrees with the ruling" and "will appeal." The appeals process is expected to take months or years .

### Q: What changes will Meta make to its platforms?

Meta must implement several changes for New Mexico users, including: a 90-hour monthly time limit for users under 18, blocking push notifications during school hours and overnight, setting teen accounts to private by default, and hiding public "like" counts .

### Q: Why didn't the court order Meta to implement age verification?

The court noted that federal children's privacy laws (COPPA) prevent Meta from requiring children under 13 to submit personal data for age verification. The court also said singling out Meta for such requirements would be unfair when other platforms don't have to comply .

### Q: What other lawsuits is Meta facing?

Meta faces thousands of lawsuits from families, more than 30 states, and school districts across the country. A major federal trial is set to begin in Oakland, California, later this month, where four states will argue that Meta knowingly designed features that addict children to its platforms .

### Q: What does this mean for other social media companies?

The ruling could set a precedent for lawsuits against other platforms like TikTok, Snap, and YouTube. More than 30 states are already pursuing similar claims, and the "public nuisance" theory used in this case could be applied to other companies .

---

## Conclusion: A Reckoning for Social Media

The New Mexico ruling against Meta represents a turning point in the battle over social media's impact on children. For the first time, a court has held that a social media company's product design can constitute a **"public nuisance"**—a finding that opens the door to similar lawsuits against other platforms .

The $567 million judgment and the sweeping changes to Facebook and Instagram signal that courts are no longer willing to accept the argument that platforms are merely neutral conduits for content. Instead, they are being held accountable for how their products are designed and how those designs affect young users .

As Attorney General Torrez put it: "For years, Meta knew its platforms were harming New Mexico's kids, from feeding a youth mental health crisis to connecting predators with children, and it chose engagement and profit over their safety. Today, Meta is paying for that choice" .

The decision is likely to reverberate far beyond New Mexico. With more than 30 states pursuing similar lawsuits and a major federal trial set to begin later this month, the era of unaccountable social media giants may be coming to an end.

---

## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, legal, or professional advice. The information contained herein is based on publicly available sources as of August 8, 2026. The ruling is subject to appeal and may be modified, overturned, or otherwise affected by the legal process. You should consult with a qualified legal professional for guidance on specific legal issues.

---

*Published: August 8, 2026*

-Read more--

**Tags:** Meta, Facebook, Instagram, Mark Zuckerberg, New Mexico, child mental health, social media addiction, public nuisance, youth safety, lawsuit, $567 million, Raúl Torrez, age verification, teen accounts, Section 230, social media regulation, technology law, child online safety, mental health crisis, online harm

The $32 Billion Question: Greg Abel Finally Starts Spending Berkshire's Record Cash Pile

 The $32 Billion Question: Greg Abel Finally Starts Spending Berkshire's Record Cash Pile

## Berkshire's new CEO just made his first major move, deploying billions in buybacks and stock purchases while doubling quarterly profits. Here's what it means for investors.

---

### Introduction: The End of the Cash Hoard

For years, Berkshire Hathaway shareholders have asked the same question: when will the company finally spend its mountain of cash? Under Warren Buffett, the conglomerate's cash pile ballooned to a record **$397.4 billion**, as the 95-year-old investor struggled to find attractive valuations in an expensive market. Buffett was patient, even as critics called him too cautious.

That era is over.

Greg Abel, who took over as CEO in January 2026, is already putting his stamp on the company. In his first full quarter at the helm, Abel led Berkshire to deploy **$31.9 billion** of its cash hoard, bringing the pile down to **$365.5 billion**. The moves included nearly **$20 billion in net stock purchases**, **$4.5 billion in share buybacks**, and a **$6.8 billion acquisition** of homebuilder Taylor Morrison.

Berkshire's second-quarter results were equally impressive. Net income **more than doubled to $25.67 billion**, fueled by a **$12.68 billion investment gain**. Operating earnings rose **16% to $12.98 billion**, beating Wall Street expectations.

The numbers are clear: Abel is not waiting. He's spending.

---

### The Numbers That Matter: A Quarter of Action

| Metric | Q2 2026 Result | Change |

|--------|----------------|--------|

| **Net Income** | $25.67 billion | **+107%** YoY |

| **Operating Earnings** | $12.98 billion | **+16%** YoY |

| **Share Buybacks** | $4.5 billion | Up from $235M in Q1 |

| **Net Stock Purchases** | ~$20 billion | First net buyer in 14 quarters |

| **Cash Position** | $365.5 billion | Down from record $397.4B |

| **Investment Gains** | $12.68 billion | Drove profit surge |

*Sources:*

Berkshire's operating businesses performed well across the board. Manufacturing, service, and retailing earnings jumped **24% to $4.47 billion**, while Berkshire Hathaway Energy's profit surged **27% to $891 million**. BNSF railroad posted a **6% increase to $1.56 billion**.

Insurance was a weak spot. Underwriting earnings fell **13% to $1.73 billion**, and insurance investment income declined **9% to $3.06 billion**. But the strength across other segments more than offset the insurance drag.

---

### Abel's Playbook: Three Moves, One Strategy

#### 1. Share Buybacks: A $4.5 Billion Signal

Berkshire repurchased approximately **$4.5 billion** of its own shares during the second quarter. The move marked a sharp acceleration from the **$235 million** spent in the first three months of 2026, though it fell slightly short of some expectations.

"We only repurchase shares when Abel and Buffett believe they are selling for less than they are worth," the company has stated. In the first quarter, Abel said Berkshire was restarting buybacks because executives found the "intrinsic value" of those shares exceeded their market price.

The buyback signal is significant. Berkshire's Class B shares have rallied **9.6% over the past three months**, outperforming the S&P 500's 4.9% gain. The shares are now trading above the weighted average price Berkshire paid for its repurchases: Class A shares closed at $780,085.97 on Friday, **6.7% above** the repurchase price, while Class B shares closed **7.4% above**.

Berkshire previously repurchased **$78 billion** worth of its own stock between 2018 and 2024.

#### 2. Stock Portfolio: A $20 Billion Reversal

Berkshire became a **net buyer of equities in the second quarter** for the first time in more than three years. The conglomerate had been a net seller of stocks for **14 consecutive quarters** before the latest period.

The company made nearly **$20 billion in net stock purchases** during the quarter. The largest disclosed investment was a **$10 billion addition** to Berkshire's stake in Alphabet (Google's parent company), which Abel pursued after consulting with Buffett.

**Alphabet is now among Berkshire's top five equity holdings**, joining longtime positions in American Express, Apple, Bank of America, and Coca-Cola.

Berkshire's report suggested it added more than **$24 billion worth** of commercial, industrial, and other stocks to its portfolio, but the earnings report doesn't name all the stocks it bought. That will be revealed in a separate 13-F filing due around August 14.

#### 3. Whole Company Acquisitions: The $6.8 Billion Homebuilder Bet

Abel's most decisive move was the acquisition of **Taylor Morrison Home Corp.** for **$6.8 billion** in equity value. The deal, announced in May and completed in July, represents a classic value bet on the U.S. housing market.

Buffett praised Abel's dealmaking abilities: **"Greg did that faster than I could have done it, smoother than I could have done it, and I never talked to the CEO. He has launched"**.

The acquisition closed on July 24 and will be reflected in Berkshire's third-quarter results.

Abel also completed the purchase of **OxyChem from Occidental Petroleum for $9.7 billion** in January, a deal started when Buffett was still CEO.

---

### The Shift: Whole Companies Over Stocks

Under Abel, Berkshire appears to be shifting its focus from buying stocks to buying whole businesses. He spent **$6.8 billion** on Taylor Morrison and inherited the **$9.7 billion** OxyChem deal—far more than the under **$3 billion** he spent on new stock positions (excluding Alphabet) in deals he worked himself.

This strategy has significant implications for shareholders. When Berkshire buys a whole company, its financials get folded into Berkshire's operating results. Shareholders gain from operating performance rather than portfolio moves. It also removes some optionality—you can trade stocks for cash more easily than sell companies.

"Although it's only been one quarter, and it's too early to say this will be Abel's pattern, it dovetails with this model of sticking to bigger plays with greater concentration," Nasdaq noted. "Shareholders may see more of this activity driving the company's work."

---

### The Human Element: What This Means for Investors

#### For Berkshire Shareholders

The Abel era is off to a promising start. He has shown a willingness to deploy capital, a clear departure from Buffett's later years of caution. The $4.5 billion in buybacks and $20 billion in stock purchases demonstrate that Abel is serious about putting cash to work.

Abel appears "more focused on operations and putting Berkshire's enormous cash reserves to work," Bloomberg Intelligence noted, "marking an early shift from Warren Buffett's final years at the helm".

#### For the Broader Market

Berkshire's decision to become a net buyer of stocks after 14 quarters of selling could be a signal to other large investors. If Abel sees value in the market, others may follow.

#### For Value Investors

The Taylor Morrison acquisition is a classic value bet—a homebuilder trading at a discount to its intrinsic value. Abel is signaling that he will continue Buffett's tradition of buying undervalued businesses.

---

### Frequently Asked Questions

**Q: How much cash does Berkshire still have?**

A: Berkshire's cash position declined to **$365.5 billion** at the end of June from a record **$397.4 billion** in the first quarter. The company deployed $31.9 billion in the second quarter through buybacks, stock purchases, and acquisitions.

**Q: What stocks did Berkshire buy?**

A: The largest disclosed purchase was a **$10 billion addition** to Alphabet (Google parent). The company made nearly $20 billion in net stock purchases overall. A complete list will be disclosed in a 13-F filing around August 14.

**Q: Why is Berkshire buying back so much stock?**

A: Berkshire only repurchases shares when CEO Greg Abel and Chairman Warren Buffett believe the price is below the company's intrinsic value. Abel said earlier this year that Berkshire found the "intrinsic value" of its shares exceeded their market price.

**Q: How did Berkshire's businesses perform?**

A: Operating earnings rose **16% to $12.98 billion**, driven by a **24% jump** in manufacturing, service, and retailing, a **27% surge** in energy profits, and a **6% increase** at BNSF railroad. Insurance was weaker, with underwriting earnings down 13%.

**Q: Is Greg Abel different from Warren Buffett?**

A: Yes. Abel appears "more focused on operations and putting Berkshire's enormous cash reserves to work," Bloomberg Intelligence noted. He has shown a willingness to deploy capital more aggressively, including the $6.8 billion Taylor Morrison acquisition and $4.5 billion in buybacks.

**Q: Is Berkshire stock a buy?**

A: Berkshire's Class B shares are trading at $521.80, above a **$512.58 buy point** from a cup-with-handle base. The stock has risen 9.6% over the past three months but is still up just 3.8% year-to-date, underperforming the S&P 500's 13% gain.

---

### Conclusion: The Abel Era Begins

Greg Abel's first full quarter as Berkshire CEO was a statement of intent. He deployed $31.9 billion, repurchased $4.5 billion in shares, became a net buyer of stocks for the first time in more than three years, and completed a $6.8 billion acquisition—all while delivering a 107% profit surge.

The shift is significant. Under Warren Buffett, Berkshire's cash pile grew to nearly $400 billion as the legendary investor struggled to find attractive valuations. Abel is not waiting. He is spending, buying, and deploying capital with a decisiveness that marks a new era.

"The results give Abel credibility and time," one analyst said. "But the company will have to keep producing exceptional numbers to justify its valuation."

Halfway through his first year at the helm, Abel has already done what Buffett hadn't done in years: put the cash to work. The question now is whether the investments will pay off.

---

### Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. Market conditions, stock prices, and company performance are subject to rapid change. Past performance is not indicative of future results. You should consult with a qualified financial advisor before making any investment decisions. The views expressed in this article are those of the author and do not constitute a recommendation to buy or sell any security.

---

*Published: August 8, 2026*

---

**Tags:** Berkshire Hathaway, Greg Abel, Warren Buffett, BRK.B, BRK.A, stock buybacks, Taylor Morrison, Alphabet, AI investment, cash pile, operating earnings, investment gains, value investing, Omaha, conglomerate, earnings season