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Here Is The Mystery, And Completely Indiscriminate, Buyer Of Stocks In The First Quarter

Tyler Durden's picture




 

With the Fed having tapered its liquidity injections into the stock market from $85 billion to "only" $45 billion per month, retail investors getting burned by the recent high beta and momentum stock flame out and "greatly unrotating" into the renewed safety of bonds, not to mention a churning market that until last week was unchanged for the year, and hedge funds ever shorter into this latest ramp, many are asking themselves: who is buying?

Here is the answer.

According to the most recent CapitalIQ data, the single biggest buyer of stocks in the first quarter were none other than the companies of the S&P500 itself, which cumulatively repurchased a whopping $160 billion of their own stock in the first quarter!

Should the Q1 pace of buybacks persist into Q2 which has just one month left before it too enters the history books, the LTM period as of June 30, 2014 will be the greatest annual buyback tally in market history.

And now for the twist.

Unlike traditional investors who at least pretend to try to buy low and sell high, companies, who are simply buying back their own stock to reduce their outstanding stock float, have virtually zero cost considerations: if the corner office knows sales and Net Income (not EPS) will be weak in the quarter, they will tell their favorite broker to purchase $X billion of their shares with no regard for price: the only prerogative is to reduce the amount of shares outstanding and make the S in EPS lower, thus boosting the overall fraction in order to beat estimates for one more quarter.

Compounding this indiscriminate buying frenzy is that ever more companies (coughaaplecough... and IBM of course) are forced to issue debt in order to fund their repurchases. So since the cash flow statement merely acts as a pass-through vehicle and under ZIRP companies with Crap balance sheets are in fact rewarded (as even Bloomberg noted earlier) the actual risk of the company mispricing its stock buyback entry point is borne by the bond buyer who in chasing yield (with other people's money) serves as the funding source for these buybacks.

In short, corporate CEOs and CFOs couldn't care less if your friendly Wall Street broker uses the repurchase allocation to buyback the stock at all time highs.

In fact, since a vast majority of executive compensation agreements are tied to company stock "performance" C-suites are perversely happy if their own corporate cash is used to buy the stock near or at all time highs: after all management year end bonus will simply benefit that much more, while keeping activist investors delighted (and away from the embarrassing public spotlight).

So the next time someone asks who keeps on buying stock despite all the negative newsflow, despite the bond yield sliding ever lower despite relentless broken-record pleas that a "recovery is just around the corner", and with vol near all time lows confirming peak complacency... now you know.

* * *

Want more data? Here is buyback activity by year. While the 2007 S&P500 buyback record of just over $560 billion is safe for a few more weeks, should companies buyback as much stock in Q2 as they did in Q1 2014, then the Q2 2014 LTM buyback total will rise an all time high:

 

Don't forget: there is no such thing as a free lunch, bought with stock buybacks or otherwise. Contrary to all the lies you may have heard, corporate debt - both total and net - is now at an all time high!

 

 

Finally, these are the companies that are the most aggressive repurchasers of their own stock, or said otherwise, the companies that have no organic use for the cash and have zero ideas how to grow their top and bottom line or what capital projects to invest their excess capital, they only have stock buybacks as an option to give the impression of "growth."

Source: CapIQ

 

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Tue, 05/27/2014 - 14:23 | 4799049 DoChenRollingBearing
DoChenRollingBearing's picture

Well, that explains that, I guess.  I'm just hanging on for the ride, waiting for the time to bail...

Tue, 05/27/2014 - 14:26 | 4799055 TheRideNeverEnds
TheRideNeverEnds's picture

[spoiler] It never ends [spoiler]

Tue, 05/27/2014 - 14:29 | 4799068 NoDebt
NoDebt's picture

Must be working.  10 more S&P points today.  Only 40 off of Goldman's NEW 1-year-from-now target number.  If we hit 1950 by next week who wants to be me they won't raise the target again?

Tue, 05/27/2014 - 14:34 | 4799078 eclectic syncretist
eclectic syncretist's picture

It worked in Japan in the late 1980's and in the US in the late 1990's too, all they way up until it didn't work any more.

Tue, 05/27/2014 - 14:51 | 4799122 nope-1004
nope-1004's picture

So.... is the "money on the sidelines" meme a thing of the past now?  Like "green chutes"?  That didn't take long.

 

Tue, 05/27/2014 - 14:51 | 4799126 Pladizow
Pladizow's picture

Soon....very soon....Skynet will own all.

Tue, 05/27/2014 - 14:57 | 4799151 dontgoforit
dontgoforit's picture

Isn't this like Green Giant buying it's own corn?

Tue, 05/27/2014 - 16:24 | 4799405 Ham-bone
Ham-bone's picture

Ok - crazy stuff...since '09, the the difference between the budget and trade deficits has very closely correlated w/ the "foreign Treasury demand"...which is to say as their was less excess dollars to be recycled by Foreigners into Treasury's, "foreigners" somehow increased their buying to soak up the excess debt  and @ progressively lower rates.  See (in bold) Foreign Treasury yoy increase in demand on left and  (in bold) Treasury debt yoy in excess of trade deficit on right...

This is in stark contrast w/ pre-crisis...

Is this the most blatant evidence the Fed is truly running a shadow QE through "foreign" locations???  If not, please explain...

Data Below....

Yr. - Foreign - Fed (y o y) = total /   Bud  /   Trade  / GDP / (Fed action)

        T buy       T buy                    Deficit / Deficit

     $6.1 T      $2.4 T (total holdings as of '13)

14. $250 B   $300 B   = $550 B / $-150  (-550) (-400) (-0.5%) est.

13.  $219 B    $542 B   = $760 B / $-205  (-680) (-475)  (1.9%) + tax hike (QE3)

12. $619       $21   = $640 / $-565  (-1100) (-535) (2.8%) (Twist)

11. $733      642   = $1375 / $-742  (-1299) (-557) (1.8%) (QE2)

10. $631      $245   = $876 / $-795  (-1294) (-499) (2.5%)

09. $672      $301   = $973 / $-1029  (-1413) (-384) (-2.8%) + tax reduction (QE1)

Post Crisis

08. $1147 $(-265)  = $880 / $243 B (-459) (-702)   (-0.3%) (FFR 0%) + TARP

07. $279    $(-39)   = $240 / $539 B (-161) (-700)   (1.8%)

06. $75         $35    = $105 / $504 B (-248)  (-752)  (2.7%)  (FFR 6.75%) 

Tue, 05/27/2014 - 16:26 | 4799483 dontgoforit
dontgoforit's picture

Ahso!  They are actually increasing QE while lying about it?  Hang the bastards!  They are taking the world to the precipice of destruction.

Tue, 05/27/2014 - 16:35 | 4799519 Bay of Pigs
Bay of Pigs's picture

You know the William Dudley is getting this all done via the BIS. All Central Banks are involved.

Tue, 05/27/2014 - 18:41 | 4799896 El Oregonian
El Oregonian's picture

This must be the prelude to the guy who held his breath going through a tunnel but failed to reach the otherside before he passed out and caused a 3-car accident in the tunnel.

The banksters are holding their collective breath.

http://www.npr.org/blogs/thetwo-way/2014/05/27/316317506/teen-causes-3-c...

Tue, 05/27/2014 - 20:10 | 4800148 SumTing Wong
SumTing Wong's picture

A Ponzi by any other name...

Wed, 05/28/2014 - 07:23 | 4801213 GetZeeGold
GetZeeGold's picture

 

 

 

 

But wait....there's MOAR!!!

 

Act now and get free shipping.

Tue, 05/27/2014 - 16:37 | 4799526 SafelyGraze
SafelyGraze's picture

buying back your stock is like drinking your pee

sure, it may seem creepy to other people

but in the desert you gotta do what you gotta do

don't forget your stillsuit 

Tue, 05/27/2014 - 16:44 | 4799564 ATM
ATM's picture

No it isn't. If a company can borrow money for nothing why wouldn't it buy back almost all it's stock? Hell, they should all be going private! 

That's not creepy. That plain old good sense in the world of insane centralized planning.

Tue, 05/27/2014 - 17:46 | 4799748 nope-1004
nope-1004's picture

 

 

"why wouldn't it buy back almost all it's stock?"

Because buying inflated phantom assets is risky, especially since the only evaluator (elevator) is (has been since 2000) the Fed.

If you rob Peter to pay Paul, who does Paul sell to?

 

Tue, 05/27/2014 - 18:18 | 4799839 Budd aka Sidewinder
Budd aka Sidewinder's picture

Jesus

Wed, 05/28/2014 - 09:07 | 4801434 BobPaulson
BobPaulson's picture

I think this is robbing Peter to buy Peter crack, or Rob Ford.

Why worry about paying back money. Another bail out will come, right? ...Right?! 

Tue, 05/27/2014 - 23:22 | 4800742 Funny Money
Funny Money's picture

...especially if that company (Apple) is chosing between borrowing for next to nothing vs repatriating it's zillions at a far higher rate.

Tue, 05/27/2014 - 19:50 | 4800090 free_lunch
free_lunch's picture

But.. but.. "I can't eat an iPad".

Tue, 05/27/2014 - 16:58 | 4799539 Ham-bone
Ham-bone's picture

in '13 - the US generated $205 B more in debt than trade deficit to be recycled to buy it...but magically the "foreign" demand increased by $219 B to buy up that debt

in '12 - $565 B more in debt than trade deficit...and magically "foreign" demand increased $619 B

in '11 - $742 B more in debt than trade deficit vs. $733 new "foreign" demand

'10 - $795 B vs. $631

quite a coincidence that "foreigners" would want to recycle more net dollars than the US is creating via it's trade deficit...and funny they'd want to do it at ever lower yields...and despite global trade being done progressively lless in dollars...

Tue, 05/27/2014 - 17:06 | 4799636 buyingsterling
buyingsterling's picture

I'd love to bookmark the original source if you can post it.

Tue, 05/27/2014 - 16:54 | 4799596 SAT 800
SAT 800's picture

Look behind you, the precipice is that end of the road there hanging out in space about fifty yards back.

Tue, 05/27/2014 - 18:10 | 4799810 OldPhart
Tue, 05/27/2014 - 20:55 | 4800334 Radical Marijuana
Radical Marijuana's picture

That link says "Forbidden."

Of the many Wile E. Coyote Moments, I like the one at the 1:25 mark of this:

https://www.youtube.com/watch?v=8VvQY2pMaEM

The Solid Tin Coyote

Coyote steps around the back of a bizarre mirror, only to then discover he has walked off the cliff ...

Tue, 05/27/2014 - 20:04 | 4799790 free_lunch
free_lunch's picture

Not destructing, more like buying the world..

Tue, 05/27/2014 - 16:34 | 4799513 gdpetti
gdpetti's picture

That's what the currency swaps were for and continue so today... said to be over 30 trillion years ago, who knows about today... James Rickards was talking about this the other day. It seems the EU is fronting for the Fed these days, thus the whole Belgium scenario.

Tue, 05/27/2014 - 17:19 | 4799621 Ham-bone
Ham-bone's picture

you mean this...

GLOBAL BANKING CENTERS (treasury holdings)

  • ————- Jan ’00—> ’07 ——> Mar ’14
  • “Carribean banking centers”
  • —————$35 B —> $68 B -—> $312 B
  • UK — ——-$50 B —> $100 B —> $176 B
  • Switzerland $18 B —> $34 B —-> $176 B
  • HK ———– $39 B —> $52 B —> $156 B
  • Singapore —$30 B —> $30 B —–> $91 B
  • Ireland ———$5 B -—> $19 B —> $113 B
  • Belgium ——$28 B ––> $13 B —> $381 B
  • Luxemburg —-$5 B ––> $60 B —> $145 B
  • TOTAL —– $210 B –> $376 B —> $1,550 T (410% increase from ’07)

In the same period ('07-'14), Japan and China (combined) increased their Treasury holdings by net $1.4 T on a trade surplus w/ the US of $3 T over the period...Amazingly these banking nations similarly had a $1.2 T increase w/ relatively no trade surplus w/ the US???  Hello Treasury demand well in excess of trade deficits!!!

Tue, 05/27/2014 - 17:25 | 4799703 Tinky
Tinky's picture

Keep hammering this home, Ham! It won't be too long before sober economic pundits point it out after doing forensic accounting in the wake of the impending crash.

Tue, 05/27/2014 - 20:05 | 4800071 free_lunch
free_lunch's picture

Seems half the west has it's eggs in the US basket..

 

Where have I seen this before? http://www.youtube.com/watch?v=I5QwKEwo4Bc

 

Tue, 05/27/2014 - 20:08 | 4800144 El Vaquero
El Vaquero's picture

 

Isn't this like Green Giant buying it's own corn?

More like eating its own seed corn.  

 

Actually, that's not such a bad idea.  We could sick the Green Giant on Monsanto to wreak havoc.

Wed, 05/28/2014 - 07:28 | 4801227 Antifaschistische
Antifaschistische's picture

There's 'money on the sidelines' because there's a mountain of debt on the field.

There's a mountain of debt on the field because of the give away intrest rate supression at the Fed.

conclusion:  The Fed IS, and will probably continue to be, the shadow buyer keeping all bubles inflated....of course, until it isnt.

Tue, 05/27/2014 - 14:56 | 4799147 Headbanger
Headbanger's picture

This means there is virtually no market participation of buyers but only a few CFOs propping up the """market""" now.

Me thinks their primary motivation is to reduce the number of shares outstanding to boost EPS maybe in seeing the economy falling fast.

 

Tue, 05/27/2014 - 15:31 | 4799302 TheReplacement
TheReplacement's picture

Dear So-n-So CEO person,

The NSA informs us that you have been looking at naughty pictures of little kids.  Well, even if you haven't been, the pictures are on your computer now.  Let's just keep this between us.  Nobody, not you, me, your company, nor our country needs this scandal now. 

So if you know what is good for you, you will take the the money we are offering to loan you and buy back your company's stock.  Just think, if you do a good enough job your EPS will look great and you'll get a big fat bonus.

Sincerely,

TPTB

PS - Don't leave town.

Tue, 05/27/2014 - 15:00 | 4799160 t0mmyBerg
t0mmyBerg's picture

This meme has been building for awhile.  I wrote to my guys a few months ago about buybacks as the ultimate reason stocks are at all time highs.  And why not?  If your borrowing costs are close to 0, then you can keep the bonuses flowing by borrowing and reducing the float.  You get rich for essentially doing nothing of any value at all.  Thanks Fed!  So when does it end?  When there is actually a cost to borrowing money (you mean money has a time value? What?).  When will that happen?  If you believe the talking heads, any day now.  Realistically, it may be quite a while.  Although Kyle Bass seems to think that the Fed will THINK their econ forecasts are spot on (they aren't) and raise rates just as the nex recession starts.  Nice work if you can get it.  What a fucking bunch of brass asshats.

Tue, 05/27/2014 - 15:26 | 4799270 Jstanley011
Jstanley011's picture

So, you're saying that artificially holding down interest rates wasn't such a good idea after all? Whooda thunk?...

Tue, 05/27/2014 - 16:14 | 4799449 SAT 800
SAT 800's picture

just think of it as a new wonder medication; that has a few "side effects".

Wed, 05/28/2014 - 16:21 | 4802920 mkkby
mkkby's picture

They are actually hurting the company, going from zero cost of capital to paying interest on it.  Cash flow down, yet execs get a bonus.  That shows how stupid investors are.  Easily hoodwinked.

Tue, 05/27/2014 - 21:54 | 4800539 Sambo
Sambo's picture

All this can end only when the Fed and its disasterous fractional reserve banking system is dismantled. 100 years is enough already.

Wed, 05/28/2014 - 04:17 | 4801111 therearetoomany...
therearetoomanyidiots's picture

So when does it end?

When Chalky the White House Clown is out of office. 

Wed, 05/28/2014 - 07:21 | 4801218 overmedicatedun...
overmedicatedundersexed's picture

this is the market, retirement money via 401k plans IRA's keep pouring into markets, stock buy backs, hedge funds & banks, Insurance co's,  small investors, nothing new there, but now we have zirp, QE, no regulatory oversight of TBTF..debt funded buy backs with o interest money..the economy is the stock market per our FED.

many see this ending with big sell off...I see it as a perpetual motion engine..it can't end until some major (outside of finance) black swan cuts the legs out of TBTF system..oil becomes too expensive and in short supply? pandemic? world war III?

not too smart to bet it fails for the last 5 years and counting...PS i am all in cash and some PM's but that is because I refuse to aid corrupt people, so I can retain some self respect. perhaps not all that smart on my part. ZH pulled the curtain back from the wizards of wall street, and so it goes..

Wed, 05/28/2014 - 09:34 | 4801501 exi1ed0ne
exi1ed0ne's picture

The future isn't that hard to see.  We end up Argentina in the next phase.

Tue, 05/27/2014 - 14:37 | 4799083 ArkansasAngie
ArkansasAngie's picture

I'm guessing they don't mind being front run either?  

Wed, 05/28/2014 - 05:48 | 4801156 cdntrader
cdntrader's picture

Exactly, they WANT to be front runned !

If your market cap is 538B$ and you "lose" 5% of 16B$ to algos by using dummy buying strategies (like not-too-discreet icebergs or VWAP), you just "created" 26B$...

Easiest money on earth !

Tue, 05/27/2014 - 14:27 | 4799060 Badabing
Badabing's picture

i just pulled $100 out of my left pocket and put it into my right!

easy money

Tue, 05/27/2014 - 14:28 | 4799066 LawsofPhysics
LawsofPhysics's picture

What's your fee?

Tue, 05/27/2014 - 14:58 | 4799130 nope-1004
nope-1004's picture

New accounting rules stipulate he can mark to mystery, so really he took out $100 and gave the right hand $50, losing $50.  The Fed will cover the loss of $50, PLUS he gets a bonus at year end for "having 100% return on his capital".  lmfao...  and prolly zero days of trading losses.

 

Wed, 05/28/2014 - 07:49 | 4801265 fallout11
fallout11's picture

...not to mention declaring a loss on his tax filing, and thus receiving a tax credit for it.

Tue, 05/27/2014 - 14:29 | 4799069 Dr. Richard Head
Dr. Richard Head's picture

You are now qualified to be a Professor at an Ivy League School!!!  Congratulations are in order.

Tue, 05/27/2014 - 14:36 | 4799082 Pool Shark
Pool Shark's picture

 

 

Ivy League Professor???!!!

Hell, Krugman got a Nobel Prize utilizing that same logic...

 

 

Tue, 05/27/2014 - 14:42 | 4799102 machineh
machineh's picture

Logic? He found it enclosed as a bonus, in an order of shrimp tacos.

Tue, 05/27/2014 - 14:58 | 4799157 dontgoforit
dontgoforit's picture

Obama got a Nobel prize for...being born?

Tue, 05/27/2014 - 15:24 | 4799264 RealityCheque
RealityCheque's picture

No he got it for killing brown people in other countries.

Excelsior!!!

Tue, 05/27/2014 - 17:01 | 4799613 SameAsItEverWas
SameAsItEverWas's picture

Obama got a Nobel prize for...being born?

Born in Kenya like his father was, per his Harvard Law Review bio?

We need a Canuck in the WH.  Ted Cruz in 2016!

Wed, 05/28/2014 - 01:14 | 4800899 Gavrikon
Gavrikon's picture

For being the first AA president.  BTW, AA does not stand for African-American.

Tue, 05/27/2014 - 14:55 | 4799124 Chupacabra-322
Chupacabra-322's picture

Bilderburg attendee:

USA Feldstein, Martin S. Professor of Economics, Harvard University;

USA Summers, Lawrence H. Charles W. Eliot University Professor, Harvard University

Tue, 05/27/2014 - 16:13 | 4799445 SAT 800
SAT 800's picture

But do they go to the same Synagogue?

Tue, 05/27/2014 - 16:36 | 4799521 Kirk2NCC1701
Kirk2NCC1701's picture

Moral:  You many not be able to pick your parents, but you can choose where to study or worship, if getting to the Top matters to you.

Tue, 05/27/2014 - 15:19 | 4799241 valley chick
valley chick's picture

Even this valley chick gets it.  Who needs a stinking degree nowadays!:-) 

Tue, 05/27/2014 - 15:44 | 4799349 Miffed Microbio...
Miffed Microbiologist's picture

Even a microbiologist does too. Unfortunately, getting it in this case doesn't mean you can do any damn thing about it which frustrates the hell out of me at times. How long this scenario can be propelled by fumes is a never ending source of personal contemplation. Sometimes I feel like Bill Murray in Groundhog Day.

Miffed;-)

Tue, 05/27/2014 - 20:42 | 4800288 KingFiat
KingFiat's picture

I don't!

Went to university and studied hard. Dropped out at about the batchelor level, as that degree was not available in my country at that time, and i did not want to waste time just to get a degree. Continued to study while learning from my work, mostly by sneaking in to relevant lectures at universities.

Today I am doing stinking well. So well that I have been forced to begin to study another field: How best to place capital.

Wed, 05/28/2014 - 09:26 | 4801479 Vendetta
Vendetta's picture

Could be a CFO or CEO of a large multinational corporation ....

Tue, 05/27/2014 - 16:12 | 4799442 SAT 800
SAT 800's picture

NO; as you were transferring the money, members of the public saw you doing it, and decided you must be a successful business man, so they offered to invest their money with you; and after you gave them little pieces of paper saying they had invested with you, you put $127, in your right hand pocket. The suckers provide Beta on t he actual.

Wed, 05/28/2014 - 00:04 | 4800811 ThroxxOfVron
ThroxxOfVron's picture

Excuse Me, Sir; but, I believe that the left pocket You pulled that $100 out of actually belongs to the Person standing to your right...

Tue, 05/27/2014 - 14:27 | 4799064 LawsofPhysics
LawsofPhysics's picture

Leverage is "free", so why not?  I wonder what happens should they decide to sell?  If these stocks go "bidless" what happens?

Tue, 05/27/2014 - 14:32 | 4799077 NotApplicable
NotApplicable's picture

Wake up Kevin Henry?

Tue, 05/27/2014 - 15:33 | 4799310 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

OH!  OH!!!  I KNOW!

 

They change the rules?

Tue, 05/27/2014 - 18:27 | 4799864 LawsofPhysics
LawsofPhysics's picture

yes, that and a bail-in.

Tue, 05/27/2014 - 16:08 | 4799429 SAT 800
SAT 800's picture

It's crowd driven behaviour. It's tulips. right now all the CFO's know they should be buying back stock; increasing the EPS sucks in the dummies, who provide Beta, vis a vis the actual, but the only way to harves the public money is to sell off the new "wonder price" stock. five minuites after the first CFO starts selling; they'll all be selling; but there won't be any buyers. Tulips. Just remember the tulips; it;s always tulips.

Wed, 05/28/2014 - 02:21 | 4800998 kurzdump
kurzdump's picture

Stocks would be halted. Magical buyers would emerge the other day.

Tue, 05/27/2014 - 15:09 | 4799199 Jumbotron
Jumbotron's picture

Circle Jerk Market

Tue, 05/27/2014 - 16:31 | 4799504 Kirk2NCC1701
Kirk2NCC1701's picture

You mean a TwoLips market.  ;-)

Tue, 05/27/2014 - 16:58 | 4799604 SAT 800
SAT 800's picture

Tuipmania; the madness of crowds; mass behaviour. The underlying causation of booms and busts.

Tue, 05/27/2014 - 18:25 | 4799857 Jumbotron
Jumbotron's picture

Either way.....it's a mania.

Tue, 05/27/2014 - 20:51 | 4800321 Chief Wonder Bread
Chief Wonder Bread's picture

What's better than roses on the piano?

twolips on the organ.

Tue, 05/27/2014 - 14:25 | 4799053 NoDebt
NoDebt's picture

Now we're a little closer to the truth.  

Will the last human shareholder please turn off the light on your way out?

Tue, 05/27/2014 - 15:29 | 4799297 sidiji
sidiji's picture

money is money whats your point? you dont think corp's money is real?

Tue, 05/27/2014 - 16:40 | 4799360 Rainman
Rainman's picture

The onlyest point is that the corner office is cashing out falsely inflated prices through exec stawk options.

A classic reacharound .

          Pretty clever inside job I say.

Tue, 05/27/2014 - 14:44 | 4799061 Fidel Sarcastro
Fidel Sarcastro's picture

Full Retard is the New Normal.

Tue, 05/27/2014 - 15:11 | 4799205 SAT 800
SAT 800's picture

!! Verlly Intresting.

Tue, 05/27/2014 - 14:27 | 4799063 alien-IQ
alien-IQ's picture

I am Jacks total lack of surprise.

Tue, 05/27/2014 - 14:30 | 4799072 Latitude25
Latitude25's picture

If a snake starts eating itself tail first, how does it end?

Tue, 05/27/2014 - 14:42 | 4799099 Spastica Rex
Spastica Rex's picture

Classically, rebirth.

Tue, 05/27/2014 - 14:47 | 4799114 detached.amusement
detached.amusement's picture

that's assuming 'ee can grow tail faster than ee can eat it

 

dont work without some alchemy sprinkled in, haha

Tue, 05/27/2014 - 22:26 | 4800624 joego1
joego1's picture

It ends with one company called "Snake ate it's tail Inc". The company has one share of stock and one share holder. The game is now over and a winner is declared.

Wed, 05/28/2014 - 09:27 | 4801484 Vendetta
Vendetta's picture

When the snake craps it 'renews' itself whole again?

Tue, 05/27/2014 - 14:33 | 4799075 I Write Code
I Write Code's picture

zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp zirp

Tue, 05/27/2014 - 14:35 | 4799081 Zirpedge
Zirpedge's picture

Yes my son

Tue, 05/27/2014 - 14:42 | 4799100 LawsofPhysics
LawsofPhysics's picture

In reality it's NIRP

Tue, 05/27/2014 - 15:21 | 4799249 DoChenRollingBearing
DoChenRollingBearing's picture

As these low interest rates destroy capital.  Yet the S&P 500 goes up to another record.  Go figure...

Wed, 05/28/2014 - 00:10 | 4800824 ThroxxOfVron
ThroxxOfVron's picture

New Capitalism Zero! -all the great taste of traditional Capitalism with virtually zero capital!

Buy some today!

( The taste in your balance sheet may vary. )

Tue, 05/27/2014 - 15:16 | 4799231 SAT 800
SAT 800's picture

pardon me, but you seem to be writing code ?

Tue, 05/27/2014 - 16:41 | 4799542 I Write Code
I Write Code's picture

The QE machine has a halting problem.

Tue, 05/27/2014 - 17:01 | 4799618 SAT 800
SAT 800's picture

It seems to have entered a Re-entrant loop of Iteration; it seems slightly exponential, but the IT guy is off for the weekend; it'll probably be alright until he gets back.

Tue, 05/27/2014 - 20:49 | 4800318 KingFiat
KingFiat's picture

Computer scientists have proven that the halting problem is unsolvable. So QE has to fail.

Wed, 05/28/2014 - 02:24 | 4801002 kurzdump
kurzdump's picture

'Please don't worry'

Tue, 05/27/2014 - 14:31 | 4799076 ebworthen
ebworthen's picture

Hey look, stock buybacks are almost where they were in 2007.

No wonder the big boys are reducing their net long positions.

Welcome to the pump and dump debt bubble ponzi!

"Invest for retirement" and all that.

And pay your taxes.

Tue, 05/27/2014 - 14:39 | 4799091 disabledvet
disabledvet's picture

exactly. "you still have to del(e)ver the goods."

With Apple this is not a problem so having been a non-believer in that thing for way too long suffice to say "glad i never shorted that thing too."

General Electric on the other hand is a case study in how you can't buy back your company and make the stock price soar. United Technologies has cleaned their clock.

There is a lot to be said for that business being broken up and sold to UT actually.

Tue, 05/27/2014 - 15:03 | 4799179 dontgoforit
dontgoforit's picture

There's not a financial damn large enough to hold back this flood of fiat once it starts to breech.  Head for the high ground!

Tue, 05/27/2014 - 15:22 | 4799253 DoChenRollingBearing
DoChenRollingBearing's picture

Dam!  That Levie is about to break!

;)

Tue, 05/27/2014 - 17:37 | 4799732 free_lunch
free_lunch's picture

Somebody familiar with the concept of exponential growth? Hockeystick?

http://www.data360.org/temp/dsg2216_500_350.jpg

Tue, 05/27/2014 - 15:58 | 4799390 SAT 800
SAT 800's picture

Maybe we could sell it to our new best friend, the Ukrainian Choclate Billionaire ? Just a suggestion. trying to be helpful.

Wed, 05/28/2014 - 00:13 | 4800829 ThroxxOfVron
ThroxxOfVron's picture

No One believed Me when i said that Count Chocula was Ukraininan and had his own mercenary army.

Wed, 05/28/2014 - 01:16 | 4800908 Gavrikon
Gavrikon's picture

Ah, the Choclogarch!

Tue, 05/27/2014 - 14:35 | 4799079 Bosch
Bosch's picture

At this point I would not be opposed to a law forbidding companies to buy back their stock if only to see the flaming wreckage.  

Tue, 05/27/2014 - 14:44 | 4799109 Winston Churchill
Winston Churchill's picture

It used to be illegal, not sure who, or when it was changed.

Tue, 05/27/2014 - 14:35 | 4799080 Dr. Engali
Dr. Engali's picture

We are witnessing the largest LBO in history.

Tue, 05/27/2014 - 14:39 | 4799093 ArkansasAngie
ArkansasAngie's picture

Corporations now own themselves have have nobody to answer to.

Tue, 05/27/2014 - 15:51 | 4799368 TheReplacement
TheReplacement's picture

Are you quite sure?  They are taking on debt, low interest debt, but debt all the same.  The collateral?  Yeah, they have someone to answer to.  Once the loans used to pay back loans start costing money the flushing will be in full effect.

Wed, 05/28/2014 - 00:17 | 4800837 ThroxxOfVron
ThroxxOfVron's picture

You forgot about the Bailouts and Bailins.

The Money Printers and Stock Underwriters aren't going to stop counterfeiting just because a few Debt Serf that cannot print money their own money or issue shares into a captured annuity/pension/insurance buy-side or use other people's printed money to underwrite printing shares don't like the fully corrupt monoploistic situation...

Tue, 05/27/2014 - 14:38 | 4799084 rsnoble
rsnoble's picture

I wonder how many more tricks they have up their sleeves?  Ridiculous.  BS has to end sometime who knows when.  Congress is probably making a law making it illegal for stock prices to go down lmao.

Tue, 05/27/2014 - 14:39 | 4799089 Al Huxley
Al Huxley's picture

They don't need to make a law, they have plenty of other means to achieve the same thing.

Tue, 05/27/2014 - 14:53 | 4799137 hootowl
hootowl's picture

Obowel Movement always stands ready to help out his cronies with an executive order of some kind.

Tue, 05/27/2014 - 15:04 | 4799185 dontgoforit
dontgoforit's picture

This will end right before or right after the '16 elections.

Tue, 05/27/2014 - 15:14 | 4799219 Dr. Engali
Dr. Engali's picture

Now where have I heard that before? Oh yeah just before the 2012 elections, the Greek elections, the German elections..... You get the picture.

Tue, 05/27/2014 - 16:45 | 4799469 Chief Wonder Bread
Chief Wonder Bread's picture

It will end when the sell side 'ANALysts' have lured all the retail muppets in and there are no more left. There are fewer suckers to lure in each time around.

 

Wed, 05/28/2014 - 07:52 | 4801266 fallout11
fallout11's picture

Righto, it is all about the bigger fool (aka bagholder). BTFATH.

Tue, 05/27/2014 - 14:40 | 4799096 SeattleBruce
SeattleBruce's picture

Sounds like a free market to me...

Tue, 05/27/2014 - 14:48 | 4799108 rsnoble
rsnoble's picture

These are the kinds of shananigans that are pulled when you have a system based on 'never ending' growth and will fly apart without it.  Brilliant.

Worse yet is the headache you'll get listening to the ones that really believe it.

Tue, 05/27/2014 - 17:05 | 4799630 SAT 800
SAT 800's picture

Oh hell yes. Just like Free Lunch. little hard to get a grasp on the sucker tho. it's slipperier than deer guts on a doorknob.

Tue, 05/27/2014 - 14:38 | 4799085 Al Huxley
Al Huxley's picture

This seems hugely bullish - less and less stock for the 'public' to buy - that's gotta be good! Can you imagine what the EPS will be on AAPL when there are only 1000 shares left to publicly trade? - The price'll be like a bazillion $!!!  Man, you definitely want to have one of those shares when that happens.

Tue, 05/27/2014 - 15:06 | 4799190 dontgoforit
dontgoforit's picture

Or, it may be totally worthless.  Wouldn't hurt to have a couple shares just for shits & giggles though.

Tue, 05/27/2014 - 15:43 | 4799332 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Combine this with the Fed cornering the market on all the "high quality" US Treasury collateral in existence and we can see the obvious outcome:  

Those who hold even small amounts of dollar denominated paper assets will become fabulously wealthy while those who own the dollars themselves will find they can an only afford physical assets whose value will collapse as the MOMO traders see no reason to own them when the stock and bond markets only go straight up.

Those who borrowed what we used to call "too much" to buy a Mcmansion or spinning rims for their SUV will see their interest rates fall to 1%, then 0.1% then 0.01% and so on.

Where is MDB anyway?

 

Tue, 05/27/2014 - 17:07 | 4799639 SAT 800
SAT 800's picture

And Bitcoins ! doan forget da bitcoins. and hula hoops; I'm personal purrty sure them hula hoops is a gonna come back bigg !

Tue, 05/27/2014 - 14:39 | 4799092 The Most Intere...
The Most Interesting Frog in the World's picture

A fitting article on the same day USA Today:

Missed the rally? Catch up with these 7 stocks Matt Krantz

4 Hours Ago

Tue, 05/27/2014 - 14:40 | 4799095 ArkansasAngie
ArkansasAngie's picture

I would be interested in seeing EPS calculated without the stock buys included.

Tue, 05/27/2014 - 14:43 | 4799104 Ban KKiller
Ban KKiller's picture

Sorry madam, that would require honest accounting of which Wall Street knows nothing. 

 

Parks, Arkansas! 

Tue, 05/27/2014 - 15:10 | 4799203 Frank N. Beans
Frank N. Beans's picture

we'll have to look at earnings period, not EPS, but that's never the headline is it:  "EPS better than expected."

 

Tue, 05/27/2014 - 14:41 | 4799098 ms8172
ms8172's picture

It's a ticking time bomb! When the dominos start falling soon....it's going to be unbelievable!

Tue, 05/27/2014 - 14:43 | 4799105 LawsofPhysics
LawsofPhysics's picture

Precisely why no dominos have been allowed to fall.  For example, anyone remember Greece?

Tue, 05/27/2014 - 14:49 | 4799119 detached.amusement
detached.amusement's picture

makes me think of eddie murphy talking about that toddler's drool, flying in the wind a foot from the ground but that shit just wont let go

Tue, 05/27/2014 - 14:45 | 4799110 angel_of_joy
angel_of_joy's picture

Last graph could serve as a list of "who has the crappiest business model (and results)". Good to know !

On the other hand, buying calls on those should be a pretty safe bet... for a while.

Tue, 05/27/2014 - 14:47 | 4799112 starman
starman's picture

Well HPs earnings should look good 4th quarter, after they lay off 50k workers. 

And buy back some shares. "Recovery"!

Wed, 05/28/2014 - 02:20 | 4800995 ricky663
ricky663's picture

source:http://www.csmonitor.com/Business/Latest-News-Wires/2014/0522/HP-to-cut-...

"The Palo Alto-based company said the reductions will save an extra $1 billion annually by the fiscal year through October 2016 and reap 2-3 cents per share of savings in the year through October 2014."

$1B / 50000 = $20,000. Looks like they are laying off grunts (or overseas workers). Doesn't look like management will suffer much, other than possibly having to do some actual work (vs. attending "important" meetings).

Tue, 05/27/2014 - 14:47 | 4799113 Occams Aftershave
Occams Aftershave's picture

Great info.   Another helpful chart would be stock buybacks ranked as percent of float.

Tue, 05/27/2014 - 14:48 | 4799118 Chupacabra-322
Chupacabra-322's picture

List of Criminal UNITED STATES, CORP. INC. Bilderburg attendees:

USA Alexander, Keith B. Former Commander, U.S. Cyber Command; Former Director, National Security Agency
USA Altman, Roger C. Executive Chairman, Evercore
USA Berggruen, Nicolas Chairman, Berggruen Institute on Governance
USA Donilon, Thomas E. Senior Partner, O’Melveny and Myers; Former U.S. National Security Advisor
USA Feldstein, Martin S. Professor of Economics, Harvard University; President Emeritus, NBER
USA Gfoeller, Michael Independent Consultant
USA Hockfield, Susan President Emerita, Massachusetts Institute of Technology
USA Hoffman, Reid Co-Founder and Executive Chairman, LinkedIn
USA Jackson, Shirley Ann President, Rensselaer Polytechnic Institute
USA Jacobs, Kenneth M. Chairman and CEO, Lazard
USA Johnson, James A. Chairman, Johnson Capital Partners
USA Karp, Alex CEO, Palantir Technologies
USA Katz, Bruce J. Vice President and Co-Director, Metropolitan Policy Program, The Brookings Institution
USA Kissinger, Henry A. Chairman, Kissinger Associates, Inc.
USA Kleinfeld, Klaus Chairman and CEO, Alcoa
USA Kravis, Henry R. Co-Chairman and Co-CEO, Kohlberg Kravis Roberts & Co.
USA Kravis, Marie-Josée Senior Fellow and Vice Chair, Hudson Institute
USA Li, Cheng Director, John L.Thornton China Center,The Brookings Institution
USA McAfee, Andrew Principal Research Scientist, Massachusetts Institute of Technology
USA Mundie, Craig J. Senior Advisor to the CEO, Microsoft Corporation
USA Murray, Charles A. W.H. Brady Scholar, American Enterprise Institute for Public Policy Research
USA Perle, Richard N. Resident Fellow, American Enterprise Institute
USA Petraeus, David H. Chairman, KKR Global Institute
USA Rubin, Robert E. Co-Chair, Council on Foreign Relations; Former Secretary of the Treasury
USA Rumer, Eugene Senior Associate and Director, Russia and Eurasia Program, Carnegie Endowment for International Peace
USA Schmidt, Eric E. Executive Chairman, Google Inc.
USA Shih, Clara CEO and Founder, Hearsay Social
USA Summers, Lawrence H. Charles W. Eliot University Professor, Harvard University
USA Thiel, Peter A. President, Thiel Capital
USA Warsh, Kevin M. Distinguished Visiting Fellow and Lecturer, Stanford University
USA Wolfensohn, James D. Chairman and CEO, Wolfensohn and Company
USA Zoellick, Robert B. Chairman, Board of International Advisors, The Goldman Sachs Group

Tue, 05/27/2014 - 15:37 | 4799326 swmnguy
swmnguy's picture

Good Lord.  What a roster.

Tue, 05/27/2014 - 16:44 | 4799559 Bay of Pigs
Bay of Pigs's picture

Rubin, Summers......where's Greenspan?

Wed, 05/28/2014 - 09:38 | 4801507 Vendetta
Vendetta's picture

They're the 'surprise' guest speakers coming and going via the back door that will delight and intrigue the crowd with little tidbits of wisdom (along with insider info).

Tue, 05/27/2014 - 15:41 | 4799341 JR
JR's picture

Soon to embark on its 62nd meeting in 60 years, this time at the Marriott Hotel in Copenhagen where 140 or so top bankers from around the world, including central banker, along with other international elitists will confab in a hotel ringed with heavily armed guards. The only authorized media will be those selected to attend but not to report, such as Martin Wolf of The Financial Times.

It was Martin Wolf who stated recently in the FT that the “low-risk-seeking saver” no longer serve a useful purpose in the global economy, quoting John Maynard Keynes with his call for the “euthanasia of the rentier.”

In recent times there has been some clandestine European media coverage of the meeting of this private, unelected government where deal-making and global planning are the order of the day, but in America there has been a total media blackout for decades.

Tue, 05/27/2014 - 17:14 | 4799670 SAT 800
SAT 800's picture

I just happen to know exactly how to take care of that problem; but I don't want to spend the remainder of my days in a concrete tank in a super-max; so I will remain silent. It constantly amazes me that no one figures it out; it's not that complicated.

Tue, 05/27/2014 - 15:48 | 4799358 Ban KKiller
Ban KKiller's picture

As in "know your enemy?"

Tue, 05/27/2014 - 16:12 | 4799440 JuliaS
JuliaS's picture

32 make a nice card deck.

Tue, 05/27/2014 - 14:53 | 4799133 compound interest
compound interest's picture

Really interesting article. Good stuff

Tue, 05/27/2014 - 14:56 | 4799145 orangegeek
orangegeek's picture

It would be nice to see the EPS and Revenue  trended in graphs  over same period shown above for same companies.

Tue, 05/27/2014 - 16:24 | 4799484 Chief Wonder Bread
Chief Wonder Bread's picture

It would be nice to see the companies that were buying back their shares in 2009 but not now.

(Of course, that assumes that such companies exist.)

Tue, 05/27/2014 - 14:56 | 4799146 TideFighter
TideFighter's picture

'Cause Janet Yellen IS FukiSHEma!   Run.

Tue, 05/27/2014 - 15:00 | 4799164 youngman
youngman's picture

The next statistic to watch is the gifting of stock options....you will see those go vertical as the pressure to lower salaries below 10 million a year hits its peak...and the buybacks increase the price of the stock...instead of building something new or developing something they are just inflating the stock EPS to make it look good...and make mergers more profitable for them too...and they even do it by taking out a loan...amazing

Tue, 05/27/2014 - 15:06 | 4799192 lasvegaspersona
lasvegaspersona's picture

When money costs nothing only a fool says no.

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