{"id":31880,"date":"2018-03-03T16:10:30","date_gmt":"2018-03-03T21:10:30","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31880"},"modified":"2018-03-03T16:10:30","modified_gmt":"2018-03-03T21:10:30","slug":"the-two-janets-and-the-perfect-storm-ahead","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31880","title":{"rendered":"The Two Janet’s And The Perfect Storm Ahead"},"content":{"rendered":"

The Two Janet’s And The Perfect Storm Ahead<\/a><\/h3>\n
\n

The Bloomberg news crawler this morning is heralding the heart of our thesis: Namely, that “flush with cash from the tax cut”, US companies\u00a0are heading for a “stock buyback binge of historic proportions”.<\/p>\n

This isn’t a “told you so” point. It’s dramatic proof that corporate America has been absolutely corrupted by the Fed’s long-running regime of Bubble Finance.\u00a0Undoubtedly, the C-suites\u00a0view the asinine Trump\/GOP tax cut not as\u00a0a green light to invest and build for the long haul, but\u00a0as manna from heaven to pump their faltering\u00a0share prices in the here and now.<\/p>\n

And we\u00a0do mean a gift just in the nick of time. The\u00a0giant Bernanke\/Yellen financial bubble is finally springing cracks everywhere, putting corporate share prices and executive stock\u00a0option packages squarely in harms’ way.<\/p>\n

So what could be more timely and efficacious than an enhanced,\u00a0government debt-financed\u00a0wave of stock buybacks to rejuvenate the speculative juices on Wall Street\u00a0and embolden the robo-machines and punters for another round of buy-the-dip?<\/p>\n

Indeed, corporate stock buying is now cranking at a $1 trillion annual rate<\/strong> <\/em>or nearly double the\u00a0rate of the last several years. That huge inflow of cash and encouragement to Wall Street will undoubtedly\u00a0break the market’s fall in the short-run; and over the next several\u00a0quarters, perhaps,\u00a0enable an extended\u00a0stop-and-start stepwise decline rather than a sudden sharp plunge as in the fall-winter of 2008-09.<\/p>\n

It also underscores why the Paul Ryan school of conservative policy wonks got it so wrong on the corporate rate cut. They still dwell in a pari passu<\/em> world where higher after-tax rates of return would, in fact, stimulate\u00a0increased investment, growth, employment and income.<\/p>\n

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

The Two Janet’s And The Perfect Storm Ahead The Bloomberg news crawler this morning is heralding the heart of our thesis: Namely, that “flush with cash from the tax cut”, US companies\u00a0are heading for a “stock buyback binge of historic proportions”. This isn’t a “told you so” point. It’s dramatic proof that corporate America has […]<\/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":[83,10586,1035,5979,2120,303,451,3054,19062,3650,860],"class_list":["post-31880","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bloomberg","tag-bubble-finance","tag-cash","tag-contracorner","tag-david-stockman","tag-fed","tag-janet-yellen","tag-stock-buybacks","tag-tax-cut","tag-us-federal-reserve","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31880","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=31880"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31880\/revisions"}],"predecessor-version":[{"id":31881,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31880\/revisions\/31881"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}