The Bailout: Grand Theft Anal

The "cost of capital" gets reduced when they buy them back from "shareholders". That usually comes in the form of paying less dividends. But in doing so they are also falsely inflating their position to existing shareholders.

 

Try again
Tell me what you think happens to the capital used to buyback stock when a company does so? Who do they buy the stock back from and what do they then do with that capital? And there is nothing false the market knows how to adjust for the buyback and the value of the remaining stock.

 

It buys the stock back.......FFS

Since you have a predetermined answer, why dont you tell us.

 

I’ll approve loans to debt collectors, but only at 50% interest.

 

Evidence for this claim?

 

But the majority of all corporate stock by value is owned by the wealthiest 1%:

https://financialpost.com/investing/how-americas-1-came-to-dominate-stock-ownership

The rich recipients use the money to bid up the prices of each others' rent collection privileges.

They buy the stock back from the rich at inflated bubble prices, making the rich even richer. Being richer, they can then afford to buy up more rent collection privileges, making their owners richer. Etc. So when the government gives companies money to buy up their own shares, the rich pocket all that money in return for doing and contributing nothing, and then buy up more of the economy, allowing them to take even more money from everyone else in return for nothing. That is the purpose of the giveaways.

 

A deceiving statement on it's face

Who Owns the Stock Market? It’s Not Just the Wealthy

...........This could be driving lots of the economic inequality, because the returns to capital (owning stock) has been outpacing the returns to labor (pay from working). But by many measures the ownership of capital has never been more equal. For instance, two thirds of the stock market (public markets) is owned by institutional investors, including pension funds who invest their assets on behalf of working people who make up the bottom 90%. Pension funds also are among the biggest investors in private equity.

Traditionally, the rich were the only ones who owned stock at all. But stock ownership increased over the years through 401(k) type plans that made the market more accessible to many American households.





And even if we simply address what you said, how has that affected me? I'm about to retire and have had LOTS of stock in my retirement funds although I have been shifting some out the last few years because now I am more concerned about preserving capital.

You mean they do it as a conspiracy? How come if they do this that stock prices do fall at times?

Corporations buyback stock when they have excess capital. They sell stock when the need capital as to build a new plant and then once it is built and making a profit they can buy that stock back. I'll ask you what I ask Grape who refuses to answer.

Tell me what you think happens to the capital used to buyback stock when a company does so? Who do they buy the stock back from and what do they then do with that capital?

 

Blame Ronald Reagan who's administration made stock buybacks legal.

 

Sorry, I totally disagree with you. People who say those things don't really know the economics of what they're talking about.

Stock buybacks are, in their essence, basically no different than paying out dividends.

http://www.politicalforum.com/index...-are-buying-back-their-shares-results.540056/

There's a huge problem with the FED buying up stocks though.

 

That's completely false. The purpose of a stock buyback is to kite the stock price in the short term for the unearned profit of C-suite types who are paid in options, or according to the stock price. A buyback will do this because it takes advantage of short-term inelasticities of supply and demand for the stock. Paying the same amount as a dividend does not have anywhere near the same effect on the stock price, and thus on C-suite compensation.

I agree that is a much bigger problem. It's just flat-out shoveling money into the pockets of the rich.

 

I.e., a fact that proves you are trying to mislead readers. But speaking of statements that are deceiving on their face:

That is a good example.

That is baldly false, as Piketty proved.

Ahem. "Institutional investors" include pension funds but are not limited to pension funds, and, very deceitfully, your source declines to specify exactly what portion of total stock capitalization is owned by pension funds, and what portion by mutual funds, what portion by banks, insurance companies, hedge funds, etc.

But almost all of it is still owned by the richest. Notice how despicably deceitful this is:

Did you notice? It didn't say anything about how much stock that increasing fraction of Americans owns. So if the number of Americans who share ownership of the most finely divided 1% of the stock increases by 20%, it still means the other 99% is owned by richer people even though the number who own some stock has increased. Most people aren't astute enough to notice this deception, and will be completely taken in by it.

How would I know? I don't know anything about your financial affairs. What are you even talking about?

No, they just do it because that is what enables them to take the most in return for the least.

The asset price cycle is an artifact of the debt money system.

Or when the C-suite types are being paid according to the stock price.

Why not pay the profits out as dividends?

I already told you: the rich recipients use the money to bid up the prices of each others' rent collection privileges.

 

Well, I will admit, it sounds like there could at least be a little bit of truth to what you're saying.

I'm rather surprised to see such an intriguing (well, perhaps I should say more complicated) economics argument coming from you.

 

I'm a novice here but logic says stock buy backs are a sort of scam

You buy back stock (which you already own some of). Supply and demand means that the stock price will be inflated by this action. That should mean that not only is the stock you already own worth more...but the NEW stock you bought to drive up the price...is now worth more than when you bought it.

Please show me how this is incorrect if you dispute it

 

The top 1% do not own 50% of all stocks.

You are the one claiming this is bad for everyone else so how has it affected me?

You are claiming illegal acts of conspiracy to effect stock prices, prove it. Some do pay out in dividends and some buy back stock that are reasons for both. Some investors look for income, dividends, some look for increase in value, growth. And again you fail to respond to what I asked

Tell me what you think happens to the capital used to buyback stock when a company does so? Who do they buy the stock back from and what do they, the person who sold the stock, then do with that capital?

 

According to Goldman Sachs they do. And in the 80s it was only 39%

 

Let alone a tank battle...

 

Well?

 

<yawn>

https://finance.yahoo.com/news/the-...ks-held-by-american-households-150758595.html

I said it was bad for the economy and the country, not for rich, greedy, evil, thieving parasites.

No I'm not. You just made that up. Their conspiracies to steal from the rest of us have been made perfectly legal, on their orders. The greedy, evil, parasitic rich ordered the politicians they own to make their thievery legal, and the politicians obeyed. Simple.

You make up a lot of absurd and disingenuous $#!+ when you have been proved wrong, don't you?

I answered you twice.

I repeat, for the third time: the rich recipients of the money use it to bid up the prices of each others' rent collection privileges so that they are legally entitled to take more from everyone else in return for no contribution (i.e., to steal).