Look at this insanity. Practically 100% of the market growth during the last decade has been composed of stock buybacks. No fundamentals whatsoever playing a part.
This is why the market is dropping so violently during this Corona craziness. There's nothing here but hot air and corporations pumping their own stocks up with the help of cheap money and hopes of always getting bailed out. What do you think is going to happen once this debt based system goes tits up as it turns out that they can't reinflate the bubble by printing anymore? We're going to be looking at a total collapse of this shitshow in the coming year or two and then it's going to be a long ass bear market from that point on. Which in turn will take down pensions and completely change the pension system forever and we'll also see a total collapse of the real estate market. Then there's the fact that people are absolutely saturated with debt too.
Don't think for a second that some bounce up or few weeks of green that we'll eventually see is an actual recovery of this clusterfuck. This is going to dive deep in the long run and it won't bounce in a matter of few years like it has done before.
If a total of x stocks exist of a company and the company buys back y stocks of itself, the remaining stockowners now own x/(x-y) times more shares of the company Did i miss anything?
Jayden Nguyen
Well what growth was there? Consumer purchasing power went down since then, and only recovered somewhat during Trump, simply because wages were mostly stagnant. There's also no new markets for companies, China produces everything itself and only scams companies for their trade secrets while throwing them scraps to keep them coming back. How can there be economic growth? Who's going to buy all that shit? Even now you have companies not ramping up production, because they know the current demand is only temporary, and they would go out of business if they spent money on expanding their production. Something has got to give.
Maybe if occupy wall street didn't let itself get subverted into a transsexual shitfest, things would have changed?
Gabriel Cruz
The chart includes non-financial corporations but does not include financial institutions?
Julian Gutierrez
They used to be illegal until 1982, then the rules were relaxed. They're not going to be outlawed for the same reason we're not in the gold standard anymore. Funny money and being able to pump it into your own stocks speeds up the market a whole lot and gives the people at the top more control to fuck with the economy. I mean who's going to be calling for outlawing buybacks when a massive company can pull 100% or more growth a year? It's shortsighted as fuck, but that's people for you. Got to get that quick profit.
Yeah I know this has been more or less public information for ages and even back in 2008 people were calling the forever bailouts and cheap money insane, but many people seem to think the market is fucked just because of corona. There's this weird idea that we're going to rocket straight back up once this blows over. The downfall of the debt market won't stop now even if the virus disappeared tomorrow and the more people realize this the better.
They should have just let the normal market cycle complete back in 2008 and we would have been more or less ok. But no, got to get the fast growth and recovery. This is one of the biggest reasons Millenials got so fucked. The halted market cycle never allowed crab market and slow growth, which would have given younger people time to jump in and start building their wealth. I guess that's one big reason for the lack of buying power. There's a generation missing from the purchasing power equation and everyone is also full of debt. That's what you get for kicking the can down the road and now is the time to pay.
Speaking of which, should we tell the commie homos raiding our beloved /shitcoin/ that if they don't cleanse their ranks of human excrement, they're doomed to forever be hacking off on their sad little containment site?
Probably best to let them never figure that out, right?
Xavier Reed
You are being robbed in slow motion. Don't ask the thieves to steal less. Expect them to accelerate the pace until everything is completely fucked up.
James Thompson
To be fair a New, New, New Deal is not really out of question and they could very well outlaw such naive practices. Even better, in the future, we could probably have built-in trustless contracts using a derivative of blockchain technology (not exactly as it is now since it's just a glorified write-only database). Regardless, if this crisis takes us deep enough into the gutter it's not impossible at all that everyone demands a stop to the insanity, even some of the people who previously benefitted from it.
Chase Barnes
A certain tribe loves inventing new ways to take your money. Don't worry, you'll bail them out when they crash. Keep slaving.
Elijah Barnes
>ONE somethings gotta give >TWO somethings gotta give >THREE somethings gotta give >AAAAAAHHHHHHHHHH >LET THE MARKETS HIT THE FLOOR >LET THE MARKETS HIT THE FLOOR >LET THE MARKETS HIT THE >FLOOOOOOOOOOOR
P/E is a bad measure when taken on its own, because you need to account for things like the risk-free rate. Look at the equity risk premium for a better picture.
Christopher Hall
Why is the european market dropping more? We didn't have crazy buybacks, DAX is down about 40%, ATX 50%
Samuel Green
loans for buybacks are the scammiest thing i learnt about this month, like wtf... surely its illegal to be in debt but do buybacks... nope
boomer remover needs to hurry up
Jayden Jenkins
Awww, look everyone, the doomer drew us a picture with his crayons. Hold it up doomer, tell us what you drew. You drew us all a big scary doom and we are all going to be doomed? Well that is very impressive Mr. Man.
Great point. People are fucking confused about what is going on and you need to pound it into their heads that the bailouts started up months before the virus hit the news.
Ultra low federal funds rate = stock buybacks. Mass adoption of passive investing index funds = inflating prices indiscriminately. Buyback queens boost entire index, fueling more index purchasing. The entire market went tulip-mania for itself. Most of these companies are worthless. Logically we should return to PRE-2008 prices because that year itself was the peak of a bubble and we haven't made any progress since then, outside of creative new ways to offshore American jobs. It's taking all my strength to hold out for an even deeper crash. It took a whole year for the last bottom to come in
Easton Watson
How does multiple expansion disprove the OP’s argument? Multiples expand when people buy stock. His argument is effectively saying that stock multiples have expanded due to buy backs. Obviously, buy backs also increase EPS so they simultaneously offset expansion. But still, his argument that buybacks have expanded multiples stands.
Samuel Ramirez
Look up "Asurion leveraged loan."
Basically a phone insurer got bought up by private equity. The firm had the company borrow $3.75 billion in cov-lite leveraged loans and then used all of it to pay itself dividends. It's definitely going to default now and take everyone's insurance premiums with it.
I forget the exact story, but a major milk producer had this happen as well. Bought out, forced to take out billions of loans, all the loans went to the equity firm, then the firm made them declare bankruptcy. All the farmers got ass fucked.
It's not even the 1980s were you did corporate takeovers to strip assets. The ability to take loans was the asset.
Who bought those loans? JP Morgan, for hefty fees, chopped them up into collateralized loan obligations where it was mixed with other trash and split into traunches. That debt was trash but chopped up the upper traunches were AAA.
If that sounds just like 2008 mortgage games, but with debt, it's because it is. Except there is no home as an asset to bailout and unwind. The rich already took it in cash as "private property."
No go bail em out bucko.
Hunter Stewart
Wow good to see it caught 2008 before it happened. Not.
Its always something. 2008 was toxic swaps, 2020 is buybacks. These ceo scammers will always come up with some new scam.
Zachary Brooks
It really sucks that companies care so much for their share prices. They could use the money to improve their own situation. Investors should just buy the dip and wait.
Wow it's almost like I've been saying for over 2 years that the market is wildly overvalued.
Xavier Moore
Profits flat, stocks up.
Hmmmmmmmmmmmmmm
Thomas Cook
short term gains over long term health which is why we see so many stupid ridiculous actions and policies in place at the brick and mortar level of large corps or business chains. there's no sense or logic to any of it unless your looking at short term high gains as the only goal
Kayden Edwards
>why not seperate serious banking from speculation?
Ask Bill Clinton about Glass-Steagall Act.
Daniel Reed
>it's almost like I've been saying for over 2 years NO ONE GIVES A FUCK ABOUT YOUR AMATEUR ANONYMOUS OPINION NIGGA
Asher Flores
More like ask the obama administration about the reversal of the Glass-Steagall act
Jace Moore
My correct opinion you retarded monkey nigger. Read a book.
Eli Rogers
Number go up, so boomer go buybuybuy! Then "tech" companies that fundamentally have no way to profit off users (ala fb without the cianigger backing) get these insane valuations.
It's like if sirgay locked his tokens in defi, then used the money to buy more link...a ghetto ultra-long if you will. There's no fundamental difference or any change to the sentiment of the project, but some wale just pumped in 75% the MC. That, but with "legit" or "non-scam" entities.
Connor Ramirez
The FED has zero scenarios planned where interest rates rise naturally in a downturn. If we get stagflation then we're fucked.
Daniel Torres
dead set how tf are boomers funding all of this
Jayden Phillips
If you want to go deeper read about Citigroups role in both Obamas and Clintons administration.
Colton White
Off your bitch ass, and your children's trannyfaggot asses. Kill a boomer today and stem the bleeding.
Christopher Campbell
>"Funding" Here's how it works. America used warfare and imperialism to cut up the world, then it showed everyone it wasn't fucking around with 2 nukes. Now you either buy our funny money out risk having "terrorist attacks" run rampant in your country. What we say goes and no amount of little dick Chinese "soft power" is gonna stop Lockheed and Raytheon from giving us their best and brightest for our sick ass DARPA projects.
Aaron Thompson
>They used to be illegal until 1982, then the rules were relaxed. >They're not going to be outlawed for the same reason we're not in the gold standard anymore. >Funny money and being able to pump it into your own stocks speeds up the market a whole lot and gives the people at the top more control to fuck with the economy. >I mean who's going to be calling for outlawing buybacks when a massive company can pull 100% or more growth a year? >It's shortsighted as fuck, but that's people for you. Got to get that quick profit. Late Stage Capitalism
C A N C E R
basado
>Why is the european market dropping more? EUR is kill
>I forget the exact story, but a major milk producer had this happen as well. Bought out, forced to take out billions of loans, all the loans went to the equity firm, then the firm made them declare bankruptcy. All the farmers got ass fucked. +
Takes one to beat one Only a chad can triumph over a chad Betas gunna beta
>These ceo scammers will always come up with some new scam. +
>fb without the cianigger backing) get these insane valuations. +
John Ortiz
>but many people seem to think the market is fucked just because of corona. >There's this weird idea that we're going to rocket straight back up once this blows over. only people that think this are boomers, idiots that are slow at gathering intel and MSM
Matthew James
>Bought out, this is the real problem. Predatory ceos who do all this shit. its mafia tier. Take control of a bushiness runn up the debt and sell all of the shit out the back door. Unfortunately its more profitable to gut a company then it is to actually make things. its going to get worse as the labor force shrinks
James Reed
>In 1999, at the urging of Summers and Rubin, Congress passed the Gramm-Leach-Bliley Act, known to some as the Citigroup Relief Act.
>The Second Citigroup Relief Act, also known as "TARP", was passed just 9 years later.
Everybody knew this already, but asset inflation has been happening forever.
People need returns on investment, but organic growth cannot provide that, so the only option is to pump the price. And no it won't collapse and trigger Armageddon, there's no size limit to the "bubble" we are creating.
Julian Howard
>big banks run our country 1962 called they want their mindblowing facts back.
Charles Garcia
everyone knew who wasnt a boomer. The board is getting flooded with retards now that everyone is home
>why not outlaw buy backs entirely I have no problem using profits for stock buybacks, especially after 2008. If companies want to make themselves more stable to prevent exposure to crashes again, then all the power to them. But this >taking loans for buybacks is downright scummy and should not happen.
Take Nintendo for example, back with the Wii U, their stock was down and people were speculating about the like Apple or Disney buying them. But Nintendo was sitting on a pile of cash from the Wii and did stock buybacks to both consolidate their company and increase their share prices to fight back any takeover bid. But then you have the likes of Boeing, who took advantage of the low interest rates of the past 10 years to take a loan solely for buybacks. That was money they didn't have and are now in even worse position.
James Garcia
>not in my country See my earlier post here We own you unless you're close enough to China or Russia to belong to them, and even their economies start to tank when ours does.
Matthew Cook
> But then you have the likes of Boeing, who took advantage of the low interest rates of the past 10 years to take a loan solely for buybacks. That was money they didn't have and are now in even worse position.
Nero what?! Those fine individuals should be forced to SELL all the shares they bought back!
