Josh Sigurdson talks with author and economic analyst John Sneisen about the continuation of stock buybacks in the markets as an act of desperation. The problem with that is, despite vast amounts of massive stock buybacks, share prices aren’t budging. We’ve seen this wavy sentiment for some time now that seems to indicate a massive crash on its way as we’ve only seen this dozens of times before.
A lot of people note that instead of spending crazy amounts of money on stock buybacks, that money could have actually been used to improve the products of the corporations. But of course this is all built on investor confidence rather than fundamental value like any other bubble.
As the Wall Street Journal notes, S&P 500 companies are looking to repurchase as much as $800 billion in stock this year! This breaks the records back in 2007 when companies went crazy repurchasing their own stock.
The biggest buyers are Oracle, Bank of America and JPMorgan Chase. But there have been less rewards for companies buying back shares in the last 18 months.
57% of the more than 350 companies within the S&P 500 that actually bought back shares this year are trailing the index’s 3.2% increase!
When the manipulative tactics are failing, there is good reason to give it a second look.
The fundamentals are off the table due to the level of manipulation in the monetary system as well as in the markets so one cannot put a date on a crash, but we see all the tell tale signs, so it’s impossible to not note the inevitable.
We saw this before and it’s crazy to think that nothing will come of it this time.
They are propping up and adding pressure to a bubble that has burst before, but at a much larger level, because the bubble was manipulated out of its full burst potential ten years ago and we are just seeing the continuation of an unsustainable hot air balloon. This needs to end. Though there are Senators attempting to challenge the SEC currently on stock buybacks which used to be illegal before the 80s, the government cannot fix this problem. We need to let this problem solve itself by crashing so we can rebuild on a more even, safe ground. Vast centralization only adds to the problem inevitably.
We will continue to cover this issue and the derivative issues that stem from it as we see glassy eyed euphoria teamed with lack of fundamental value.
Stay tuned for more from WAM!