The Trump tax cut is the largest theft in human history without any comparison. But don't take my word for it...
Head of the SEC:
"Now, we all know what happened the last time a Republican-controlled government pushed through a corporate tax holiday in 2004. As that bill’s sponsors hoped, American companies repatriated billions of dollars of overseas cash. But corporations didn’t invest most of that money in innovation. They didn’t invest it in retraining their workforce or raising wages. Instead, executives largely used the influx of fresh funds for massive stock buybacks"
"So when I first took this job, I worried that 14 years later history would repeat itself, and the tax bill would cause managers to focus on financial engineering rather than long-term value creation. Sure enough, in the first quarter of 2018 alone American corporations bought back a record $178 billion in stock. On too many occasions, companies doing buybacks have failed to make the long-term investments in innovation or their workforce that our economy so badly needs"
Even more disturbing, there is clear evidence that a substantial number of corporate executives today use buybacks as a chance to cash out the shares of the company they received as executive pay. We give stock to corporate managers to convince them to create the kind of long-term value that benefits American companies and the workers and communities they serve. Instead, what we are seeing is that executives are using buybacks as a chance to cash out their compensation at investor expense."
Despite record share buybacks - 46% higher than 2017 - there has been net share issuance in 2018, due to insiders cashing out. They may as well transfer the money from the U.S. Treasury to the Cayman Islands, it would be far more efficient than conducting this charade of simultaneous issuance and buybacks.
Those assuming that record buybacks will keep "the market afloat" will be sadly mistaken. Record share buybacks and a casino still below the January highs. They're robbing not only the economy but also the public shareholders.
Sadly, there is no such thing as "free money". Something the corruption class has yet to learn.
Is borrowing trillions of dollars to enrich insiders cashing out at the top, bad for the 'Conomy?
"Federal Reserve data show that buybacks are now equivalent to 4 percent of annual economic output, up from zero percent in the 1990s"
Holy fuck, we're doomed.
While I'm here, Skynet is squeezing shorts to attempt a new high on the S&P
The freight train coming from the other direction is the Nasdaq/momentum trade:
The fake reflation trade
And the entire rest of the world...