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What Does the Fed See Heading at Big Banks? Blocks Share-Buybacks, Slaps on Dividend Caps Due to “Economic Uncertainty” and “Cushion Against Loan Losses”

What Does the Fed See Heading at Big Banks? Blocks Share-Buybacks, Slaps on Dividend Caps Due to “Economic Uncertainty” and “Cushion Against Loan Losses” My Big-Four Bank Index already got crushed back to 2004 level. After the stock market closed today, the Federal Reserve announced that “in light of the economic uncertainty,” and to provide “a cushion […]

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US Steel Shares Plunge, Dividend Slashed, Buybacks Halted, 1,500 Workers Cut Amid Deepening Manufacturing Recession

US Steel Shares Plunge, Dividend Slashed, Buybacks Halted, 1,500 Workers Cut Amid Deepening Manufacturing Recession  President Trump told a crowd of steelworkers in Illinois in July 2018 that “After years of shutdowns and cutbacks today the blast furnace here in Granite City is blazing bright, workers are back on the job and we are once again pouring […]

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Expect Buybacks to Sustain Markets

Expect Buybacks to Sustain Markets With uncertainty swirling around the financial markets right now, many are warning about a financial storm brewing and how to navigate through it. Let’s consider the storm elements in the world right now. The ongoing trade war is obviously a major concern, which is nowhere near being resolved. Growth is […]

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What Would Stocks Do in “a World Without Buybacks,” Goldman Asks

What Would Stocks Do in “a World Without Buybacks,” Goldman Asks Companies buying back their own shares has “consistently been the largest source of US equity demand.” Without them, “demand for shares would fall dramatically.” Too painful to even imagine. Goldman Sachs asked a nerve-racking question and came up with an equally nerve-racking answer: What […]

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Corporate Share Buybacks Increasing at Alarming Rate… Again

Photo by Mike Kalasnik | CC BY | Photoshopped from original Corporate Share Buybacks Increasing at Alarming Rate…Again Corporations have been using buybacks to “rob Peter to pay Paul” since the Reagan administration created laws that allow it. According to a Goldman Sachs chart, 2018 was a record year for buybacks, which neared $800 billion for S&P 500 companies […]

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Expect the Fed to Pause if Volatility Continues

Expect the Fed to Pause if Volatility Continues It’s a good thing October is coming to an end. It’s been a particularly lousy month for the markets. October has seen about $5 trillion in value erased from global markets. Reasons for that sell-off range from fear over Fed rate hikes, trade wars, elections and buyback […]

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Ban Share Buybacks

Mario Tama/Getty Images Ban Share Buybacks American corporations are simply raking in profits. Some are so bloated and cash-rich they literally can’t figure out what to do with it all. Apple, for instance, is sitting on nearly a quarter of a trillion dollars — and that’s down a bit from earlier this year. Microsoft and […]

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Stock markets look ever more like Ponzi schemes

Stock markets look ever more like Ponzi schemes The FT has reported this morning that: Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability. They added: UK plc’s net debt has surpassed pre-crisis levels […]

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Here’s What Fueled the Rally in Stocks since February

Here’s What Fueled the Rally in Stocks since February A huge force that’s going to fizzle. We have another post-Financial Crisis record on our hands! Share buybacks by S&P 500 companies during the three-month period of February through April soared 15.1% from a year ago, to $166.3 billion, according to FactSet, the highest since Q3 2007, which […]

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“Risky Business”: Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies

“Risky Business”: Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies One of this year’s key narratives has been the degree to which US stocks have benefited from a perpetual, price insensitive bid. By that we of course mean corporate buybacks, which one might fairly characterize as having replaced the monthly flow […]

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Weekly Commentary: China Hardens Peg and Brazil Goes to Junk

Weekly Commentary: China Hardens Peg and Brazil Goes to Junk Let’s this week begin with a cursory glance at the world through the eyes of the bulls. First, the global backdrop provides the Fed convenient cover to delay “liftoff” at next week’s widely anticipated FOMC meeting. Even if they do move, it’s likely “one and […]

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