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Back By Popular Demand: Presenting The Blow-Off Top In Stock Buybacks

Tyler Durden's picture




 

Yesterday we showed the absolutely ridiculous move that is taking place in corporate buyback announcements. And since the blackout period for buybacks is officially over, and announcements can now become executions courtesy of Wall Street's VWAP algos, here again, by popular demand, is the chart showing the record blow-off top in debt-funded stock buybacks which together with central bank buying (such as the SNB) should be enough to support the market even as outflows from equity funds have never been higher.

 

The biggest culprits:

 

The industry breakdown confirms what we have said before: "when the same management teams that sell record amounts of their own company stock to the companies they control - companies which are now buying back record amounts of stock, this is not only the worst possible conflict of interest, it means, for lack of a better word, that the Nasdaq, bubble or not, has become the biggest circle jerk in history!"

 

And putting it all in context:

 

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Mon, 05/11/2015 - 09:32 | 6080628 ebworthen
ebworthen's picture

Maintaining faith getting more expensive.

Mon, 05/11/2015 - 09:40 | 6080643 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

You ain't kidding. About 3/4 of my put exposure is Jan '17, so have time. But theta and moving further out-of-the-money not giving me any warm fuzzies.

Mon, 05/11/2015 - 09:57 | 6080687 NoDebt
NoDebt's picture

We have successfully discounted all future earnings (if there even is such a thing) to net present value.  Clearly, corporations have no belief that there will be ANY future growth.  It's the old "today's as good as it gets".  

They may be right.

Mon, 05/11/2015 - 10:39 | 6080824 sun tzu
sun tzu's picture

Not only are they using their own cash for buybacks, many are borrowing billions of dollars for buybacks. What banks or lenders are stupid enough to lend the money, especially to tech and biotech companies whose assets consist mostly of intangible assets and goodwill?

Mon, 05/11/2015 - 11:08 | 6080933 spinone
spinone's picture

Don't worry about the banks, you'll be bailing them out

Mon, 05/11/2015 - 09:33 | 6080630 i_call_you_my_base
i_call_you_my_base's picture

Fuller retard.

Mon, 05/11/2015 - 09:37 | 6080633 SillySalesmanQu...
SillySalesmanQuestion's picture

Pile in, pile on, pile up.

Mon, 05/11/2015 - 09:37 | 6080635 A_latvian
A_latvian's picture

I got a $10k signing bonus and a free apartment in San Jose during the dot-com bubble.  Now I'm getting stock options and free money from my etrade-baby account!  BUY MOAR STOCKS!  TO THE MOON!  Free Obama/Yellen $$ FTW!

Mon, 05/11/2015 - 09:37 | 6080636 onewayticket2
onewayticket2's picture

buyback, drive stock price up, exercise Exec. Comp plan.....buy Maserati......repeat.

Mon, 05/11/2015 - 09:38 | 6080639 LawsofPhysics
LawsofPhysics's picture

As the underlying currency goes to zero, my equity "valuations" will go to infinity!!!

 

"Winning"!!!

 

/s

 

Mon, 05/11/2015 - 10:11 | 6080710 Harbanger
Harbanger's picture

It shouldn't be a sarc.  When money in a Bank is in danger of being confiscated, currencies are being overprinted, Bonds are about to implode and Gold is manipulated, there's no place else to go.

Mon, 05/11/2015 - 09:43 | 6080650 Blopper
Blopper's picture

Corporations NEED to leverage all the way to the tip of the hilt and use ALL the money to buyback ALL the shares in the market.

 

Go Go Go...!!

 

I love fireworks.

Mon, 05/11/2015 - 09:48 | 6080667 new game
new game's picture

can you say PONZI?  ha.

rape that bitch called a corporation, issue options and sell baby sell.

Mon, 05/11/2015 - 09:57 | 6080688 geekz_rule
geekz_rule's picture

this is just the banksters consolidating everything

the threat, the promise - never was socialism.

ALWAYS was - Monopolization. by banksters and their printing presses.

W Va coalmine lifestyles for us all! w00t!

P < P + I

Mon, 05/11/2015 - 10:15 | 6080721 Moneyswirth
Moneyswirth's picture

From Barron's this weekend: "With about 90% of the S&P 500 reporting first quarter earnings, EPS growth is 0.1%, which is better than the expected negative 4.7%."

That next GDP print is gonna be a doozy

Mon, 05/11/2015 - 10:15 | 6080724 fremannx
fremannx's picture

It could appear as a blow-off top but the main expectation is that a new high will overthrow the upper trend line of an ending diagonal dating back to 2013.

 http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...

Mon, 05/11/2015 - 10:18 | 6080735 Herdee
Herdee's picture

Do anything except give people a raise.

Mon, 05/11/2015 - 11:00 | 6080904 bnbdnb
bnbdnb's picture

Own your companies stock. Thats your raise. Now suck it.

Mon, 05/11/2015 - 10:21 | 6080743 Caveman93
Caveman93's picture

the biggest circle jerk in history!

I have to say I agree.

Mon, 05/11/2015 - 10:44 | 6080844 barry2001
barry2001's picture

If you are into drones check out this site : www.pickyourdrone.com

Mon, 05/11/2015 - 11:35 | 6081036 truthserum
truthserum's picture

Stockmarkets don't become larger or smaller because moneys flowing into or out of them. There is no money in the stock market, not one penny. It's a pass-through mechanism where I buy stock from somebody and they have my money or they buy stock from me and I have their money.

Anyone claiming there's money on the sidelines waiting to push up asset prices, can be completely ignored.

Do NOT follow this link or you will be banned from the site!