{"id":31640,"date":"2018-02-26T12:26:52","date_gmt":"2018-02-26T17:26:52","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31640"},"modified":"2018-02-26T12:26:52","modified_gmt":"2018-02-26T17:26:52","slug":"its-raining-money","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31640","title":{"rendered":"It\u2019s Raining Money"},"content":{"rendered":"

It\u2019s Raining Money<\/a><\/h3>\n
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\"\"<\/a>With apologies to the Dire Straights:<\/p>\n

Now look at them yo-yo\u2019s that\u2019s the way you do it
\nYou play the bull on the fin TV
\nThat ain\u2019t workin\u2019 that\u2019s the way you do it
\nMoney for nothin\u2019 and stocks for free<\/p>\n

After 9 years of artificial liquidity drenching markets the same game continues in 2018: It\u2019s raining money. Again. Still.<\/p>\n

Last week<\/strong><\/a> we saw the standard script of the last 9 years unfold: Dovish talk by central bankers and artificial liquidity taking over markets. The latest avalanche of free money entering markets are of course buybacks courtesy of tax cuts which now are expected to reach $650B<\/strong><\/a> in 2018 announcements coming to $50B a month.<\/p>\n

In many cases companies don\u2019t know what to do with all that free cash, but to buy back their own shares. Warren Buffet pretty much spelled it out this weekend<\/strong><\/a> and today:<\/p>\n

\u201cA large portion of our gain did not come from anything we accomplished at Berkshire,\u201d Buffett wrote.<\/em><\/p>\n

The firm\u2019s most recent annual letter revealed the investment conglomerate\u2019s net worth surged $65 billion in 2017, with $29 billion of that stemming from tax proceeds. That gain was realized in December, after the passage of the tax plan.<\/em><\/p>\n

So he has a problem, knowing that stocks are expensive he\u2019s having a hard time investing the cash so he\u2019s opening the door to buy back his own shares over issuing more dividends. None of this creates jobs, jobs, jobs of course, but is a refection of the absurdity of the ill devised tax cuts that will continue to expand wealth inequality but will continue to produce a bid underneath markets until the bitter end.<\/p>\n

Lest also not forget that the ECB keeps running QE at 30B Euro a month and overnight the BOJ\u2019s Kuroda announced persistent monetary easing is needed while China injected 150b yuan in overnight liquidity as well and voila a sea of global green:<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/article>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

It\u2019s Raining Money With apologies to the Dire Straights: Now look at them yo-yo\u2019s that\u2019s the way you do it You play the bull on the fin TV That ain\u2019t workin\u2019 that\u2019s the way you do it Money for nothin\u2019 and stocks for free After 9 years of artificial liquidity drenching markets the same game […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,85,124,233,282,6039,487,2151,7542,661,662,3054],"class_list":["post-31640","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-boj","tag-central-banks","tag-ecb","tag-european-central-bank","tag-free-money","tag-liquidity","tag-monetary-easing","tag-northman-trader","tag-qe","tag-quantitative-easing","tag-stock-buybacks"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31640","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31640"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31640\/revisions"}],"predecessor-version":[{"id":31641,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31640\/revisions\/31641"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}