Corporations have spent over $2 trillion in stock buy backs the last 3 years

[edhopper]

Keep that in mind as they have their hands out for trillion$ now.

No cash reserves for an emergency, because they can always count on the Government to bail them out.

[Amishman]

1. Buybacks should have to be mirrored in profit sharing to all employees

Want to do $100 million in buybacks? Then you need to match it with $100 million divided among all non executive employees.

My current employer has spent the equivalent of $20,000 per employee in buybacks over the past three years.

[kysrsoze]

2. They should be paying for this shit

[orwell]

3. And all those purchases...

...are now underwater.

A real bunch of wise guys...

[Roland99]

4. Want some food for thought? How much is $1 Billion anyway?

Imagine if you could:

Spend $1,000 every hour

Of every day

Of every week

Of every year

For 50 years

You’d still have over half a billion leftover?

1000 x 24 x 7 x 52 x 50 = $436,800,000



And in this case, we’re talking 2000x one billion

[Igel]

5. This is a complicated thing.

Because a couple of years ago the complaint was that they were sitting on too much cash.

Last summer most corporations were still fairly liquid. Even airlines. You read that airlines used 96% of their free cash flow to buy back stock and that doesn't tell you what they did with the other 1/3 of their profit (because "free cash flow" does not mean "profit&quot .

It was fragile liquidity, because the very low interest on debt also meant that they could have high debt.

Imagine you're a single person making $60k/year. You can have a fair amount of cash from income, borrow a good chunk of change and with the right loan make payments. You're massively in debt, but servicing the debt isn't a problem.

That was most businesses. Including the airlines. But two months of massive losses would be like having that single person's income halved. Liquidity's gobbled up, debt becomes unmanageable. Then you need a loan to keep things going or, when you go under, your assets are the bank's, the bank still isn't made whole, and (in the case of a lot of bankruptcies) the loss propagates. Then you have a large-scale liquidity crisis.

One way of getting cash? Sell stock. That's one reason to buy stock back, because you can reissue it later. But with the stock market tanked, that won't work. So we have a largely stopped economy on top of a supply shock and on top of that a liquidity crisis. Makes fall 2008 look like a cakewalk, just a fairly mild recession brewing until the liquidity crisis zonked everything. The liquidity crisis was mostly gone by 1/2009, leaving the fall out and the recession, morphed into a tiger.