De beurs is gek

quote:

retsok schreef op 15 maart 2016 17:55:

Investors have been exiting stocks at almost the fastest rate on record. During the past year when everyone has been selling—corporations continued with their debt funded stock buyback programs at the fastest pace in history and will exceed that of 2007. The S&P 500 companies are set to repurchase 165 billion in stock the quarter. Compare this to the 40 billion investors have pulled from mutual and exchange traded funds since January and will likely be the largest quarterly draw downs in history.

If they do purchase 165 billion this quarter it will be the largest 12 month buyback total ever at 590 billion. So this is why the index has kept the bull alive with now looking at the 4th quarter of declining earnings. If the withdrawals from mutual funds and ETFs continue at this pace 60 billion would have been withdrawn this quarter versus 165 billion in buybacks this quarter.

Remember buybacks are exempt from market manipulation rules so they are being front run by the banks in every way possible. There are also two agencies who are funded to buy stocks to support the market, one at the FED and the other (PPT) at the treasury. So if you are wondering how this shit show they call a market can hold up in face of awful economic data and outlook it is now clear. Of course one of the reasons for QE was to encourage more buybacks. What could cause buybacks to end? If earning declines continues would that do it? Of course if they can’t borrow the money from the central banks (QE) or the general market or from investment banks it stops—but what could cause that to occur?