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Author Topic: Money  (Read 8402 times)

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AGelbert

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Re: Money
« Reply #585 on: April 08, 2019, 12:41:14 pm »
Agelbert NOTE: Notice that the Federal Reserve deliberately low balled (i.e. LIED ABOUT) the total amount of buybacks in 2018 (see article snippet bellow). That said, there is no doubt that buybacks, even from the Fed perspective, are right there with Fed stock bubble inflating intervention  in keeping the Stock Market artificially rising. As the chart above clearly shows, the beneficiaries of this FINANCIAL SCAM are the crooks at the top, NOT we-the-people.

April 8, 2019

SNIPPET 1:
According to the Federal Reserve’s most recent Financial Accounts quarterly report, corporate demand for stocks, measured as gross repurchases minus share issuance plus M&A, totaled $509 billion last year.

Households were the only other net buyer of stocks (+$191 billion).

Pensions, mutual funds, and foreign investors sold $243 billion, $124 billion, and $94 billion of equities in 2018, respectively.

High equity exposure among major investor categories increases the importance of buybacks as a source of equity demand. Equity allocations for each of the major investor categories are elevated vs. history. Aggregate equity allocation totals 44% across households, mutual funds, pension funds, and foreign investors (86th percentile relative to the past 30 years). In contrast, we estimate that allocation to debt and cash are only at the 39th and 3rd percentiles, respectively.

SNIPPET 2:

So as Goldman turns from a carrot to a stick approach, one can summarize the latest Goldman report by observing that very bad things will happen if Congress proceeds with its intentions to ban buybacks. There is a silver lining: while Goldman previously sided with the generally clueless segment of "financial experts", claiming that the impact of buybacks on stocks is at best muted, now that buyback legislation is becoming an increasingly greater threat by the day, Goldman can finally admit the truth: without buybacks the market will crash.

Full article:

 

Quote
adonisdemilo
So, logic suggests that without buybacks the health and wealth of the Market is a pile of crap.

Quote
fulliautomatix
Goldman talking its book.

Allowing stock buy-backs funded by debt in the age of TBTF is effectively corporations holding the taxpayer to ransom: TBTF means low interest rates, means stable and directed (by corporate, of course) governance and means the rent seeking brought about by the low growth environment is rewarded. Nowhere is there economic growth as a result.

Buy-backs nor funded by borrowing (where you might consult with GS for advice, planning and muppetising) are something different.




 
« Last Edit: April 08, 2019, 04:33:38 pm by AGelbert »
Hope deferred maketh the heart sick: but when the desire cometh, it is a tree of life. Pr. 13:12

 

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