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Stock Buybacks Account For About 20% Of Yesterday's Buying: Goldman
While we already know that there is only one true irrationally non-economic buyer of stocks in the US equity market, getting confirmation from none other than Goldman Sachs is another matter...
- GS: "BUYBACKS yday accounted for 17% of our total flow, at times 33%"
Sourced from a run, this explains the machine-like vertical buying panic of the completely indiscriminate "well stocks are down and we need to maintain our bonuses) corporate buyback machine.
And as a reminder, expect much more of this: as Goldman forecast (and hopes to pocket commissions on) two weeks ago, of the $220 billion in net inflows into equities, $450 billion, the most ever, will be due to stock buybacks, even as households and pension funds both sell to corporate CFOs, whose only interest is to boost their equity-linked compensation.
Courtesy of @BergenCapital
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Corporate CFOs have pretty much become daytraders
It would be interesting to track the amount of time they hold before they close out their positions.
Now we know the economy is imploding:
http://www.cnbc.com/id/102392029
I've been saying for the last year you guys better buy some stocks before there aren't any. This whole shit show is being taken private.
- YELLEN SAYS THE STOCK THAT WALLSTREET SOLD THESE COMPANIES WAS NOT NAKED SHORTED
- YELLEN SAYS BANKSTERS LOVE TO SELL COMPANIES THEIR OWN STOCK AT THE TOP
Can they take the RISK private too, or do we get left holding that particular bag?
Stock buybacks are the corporate equivalent to self congratulations.......with a cash bonus at the end of the year.
Circle jerk
Same action, different 'reward'. :-)
Even if their self-love is measured in dollars, narcissism is too noble an affliction to be confused with vulgar greed.
Better than investing in tech, tools or.. you know... people. Especially when the govt will help out hose folks who don't actually earn a living wage.
This only makes sense if we are near when those options vest or can be exercised - ie the options at a lower price that would be exercised into the higher stock price created by all this buying. Otherwise, the corporate buyers would be shooting their load too soon.
This is not stock options, this is companies buying back their own stock. Totally different.
Like a gun buyback.
Hope they have one around here, soon. I have some rusty, broken crap & need some beer money.
HEY TYLER, QE HAS FINALLY HIT MAINSTREET:
Hasbro the monopoly board game maker has joined the central bank QE race to the bottom.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11386083/Do-not-pass-Go.-Do-not-collect-20580-Monopoly-maker-hides-real-cash-in-games.html
Monopoly money being replaced by counterfeit....err moar counterfiat money LOL.
Remember the good ol' days when companies bought back their shares at the lows and sold to the public at the highs?
Now they buy at the highs and believe there will never be any more lows.
I asked my Magic 8 ball if CFO's were making the right decisions.
The answer was "Not LIkely".
Making the right decisions . . . for who?
Probably not their companies. But for executive compensation, otoh, how low do you suppose the stock warrants they'll cash in on are priced?
Jackpot for them.
There's a sucker born every minute I guess...
Quick, everyone to the otherside of the boat and the safety of that givernment paper!!!
LOL!
Yes, it would appear that humanity has been devolving for quite some time.
Hey, what part of "the banks will own everything" don't you guys understand? This includes stock as wel...
The physcial gold thing through me for a loop.
That's when they'll all be nationalized. Don't worry though, they'll still receive their bonuses.
we are taking on debt to buy our stock as it is our best investment..ponzi no never.
This is the definition of a Ponzi !! ...The Status quo of Fraud will continue. ..
But remember, unresponsive is unsustainable.
"Buybacks Mounting"
Shit Show Timeline.
I respect all of your opinions and would like some input here. Day after day after day I expect some recokening to occur. Every day it is dissappointment as TBTP manipulate out of every conceivable occurrence that shoud trigger a collapse to reality. Quite frankly....it is starting to take its toll on my mental health. I'm getting so I can't bare to watch the unfettered shennanigans by the Fraudsters and Political Elitists. Should I simply stop coming here and start watching The Bachelor, Survivor, and the thugs of the NBA?
You've got to admit....it's a burden watching a lie when you know the truth.....but there is never any vindication.
I think I'll BTFD. Drink the Kool-Aid.
Just what this economic creepshow needs .... moar gross malinvestment and distortions.
The Patriot Act approves this message.
While I don’t doubt the data re: buyers, I still think the 200 DMAs played a role, from which indices such as SPY and IWM bounced very strongly early,, perhaps because treasury stock depts could claim a ‘bargain’ there and fend off protests of indiscriminate ramping. Of course, if they’re worried about image, they’ll stop at the 20/50 DMAs to avoid ‘overpaying’, but as the big boys tend to have large appetites, will be interesting to watch. I suspect it was more a bounce in an interim downtrend than a hard floor …
Heck cut out the middle men....just give all S&P 500 companies....dollar printing machine and be done with it
Well, they have to monetize all those shares they issue themselves, you know to diversify, and who else is going sop up all that supply?
Because conflict is the new alignment...
Obama's plan: Oil Patch pays for tax cut, Middle Class Patch pays for Obamacare .... Corporate Patch pays for stock stimulus ?
Can't be very productive. It's a finite game.
These companies may have to sell their stock to raise cash at the worse time. Since everyone is doing now there's no worry. Once the party end it will be interesting.
Wrong. Stock buy-back has only 1 purpose : reduce the # of stocks so the P/E ratio and the stock value go up. Those bought-up stocks DISAPPEAR. Who gains? Short term, the management - they get bonuses as a function of said P/E ratio's or stock value. Does this boost the economy? Not at all, no single item gets produced more, even the nominal P/L may drop but as long as the # of stocks drops faster, to the outside world the P/E and stock value keep climbing. The real fun will start if the game runs out : a lot of those buy-backs have been made using LOANS .... can you imagine that? LOANS. Yhe nominal debt of those cies skyrockets, but given the low interest rates, that is considered to be NO problem. Until it does.
Sad...stock market corporations have run out of buyers and now are sucking money out of itself to buy its own stock..time to bring oversea profits home to help stock buybacks...
When the bears all finally capitulate, the markets will tumble. If you had followed the bearish advice on this website for the past seven years, you would be real poor. The Fed bankers have thrown $5 trillion into these markets to support them. They could throw in $5 trillion more. Now the pres is proposing even more massive deficit spending. He said people no longer care about deficits. I say, they never did. People believe living in debt is just normal. Loan terms can be extended, no problem, until it is. Companies borrow billions of $ and buyback their shares; investors love it.
Yes, a tipping point will be reached, even with the ten year down to 1%, but when? This was all well thought out and the Fed models of human behavior were exactly right. Remove fear through implicit and explicit market guarantees, and greed will do the rest. A black swan will arrive when everyone is certain we are on a permanently high plateau and nothing can go wrong. For now, shorting is a fools errand.
Gee. Keep selling off divisions and buy more of your own stock until what? Until all you have is stock?
They should rename Public Companies to Self Liquidating Trust Funds.
That's all...?!? Bullish....
Ramp it up! Bullish BATFT!!! Woo Hoo.
Shit, let's get some loans to buy that shit back, buy that shit up. Fucking free money to all.