Friday, September 11, 2015

Corporate Bernie Madoffs Already Cashed Out

There wasn't just one Bernie Madoff, there's a generation of Madoffs

Today's dunces have confused stock with flow. A Ponzi scheme is a liability without any assets. They exist temporarily because copious fools confuse liquidity with solvency. Only when the capital call comes does everyone realize at the same time, there is no money i.e. Like the Dow Casino...

"How they work is simple: Companies repurchase their own stock, inflating paper profits without producing anything of tangible value—such as investing in R&D, wages or plants and equipment."

"$6.9 trillion since 2004 has been spent on buybacks" 

"the reluctance to boost capital investment in operations, people and product has left companies with the oldest plants and equipment in almost 60 years. The average age of fixed assets reached 22 years in 2013, the highest level since 1956"

Buybacks are how the corporate Bernie Madoffs cash out, using corporate cash to buy their own stock.

"Who will tell me when it's time to sell?"