Harvard Business ReviewL Profits without Prosperity

[RandomGuy]

Well, then, you should cash out, wait for that crash and buy cheap (if you are right).

Pretty much. Paying down debt and biding time.

[Winehole23]

buybacks may not be in the interest of the shareholders, long term

To get a better understanding of the impact of buybacks, we set out to compare the performance of companies that rely heavily on repurchasing shares with those that do not. Our study, “Secular Stagnation”, examined 1,839 public companies in the United States over a five-year time‐scale. We found that the more money a firm spends on buybacks, the less likely it is to grow over the long-term. In fact, as the chart below makes clear, we discovered that not only do buybacks not lead to growth in a company’s market value, they are strongly correlated to a declining market value.

https://knowledge.insead.edu/economi...e-suicide-7071

[boutons_deux]

buybacks may not be in the interest of the shareholders, long term

https://knowledge.insead.edu/economi...e-suicide-7071

short-termism, taxes are low, so dump all profits into buybacks, dividends, (not research, or investment). Corporate execs are heavily compensated in stocks so they cook the books every qtr to fake profits, and/or move pension reserves into operating finances.

short-termers don't care about eventual corporate disease and/or death. it's Grab The Money, All The Time (as bad as p/e predators)

[boutons_deux]

As the Data Show, Higher Corporate Profits Mean Higher Investment (Not)

http://cepr.net/blogs/beat-the-press...investment-not

iow, "we would invest more if taxes were cut" is a business lie.

low taxes means higher profits which are creamed off to investors and buybacks

[Winehole23]

"we're too dependent on Taiwan"

[Winehole23]

takers, not makers, tbh

[boutons_deux]

Now Congress/Biden, aka taxpayers, giving US chip mfrs $10Bs to invest

low taxes = buybacks, no investment, then taxpayers bail out chip mfrs with $10Bs to invest.

[boutons_deux]

If US chip mfrs want capital to invest, then raise capital in the markets, issue stock, but not from the pockets of taxpayers.

[Winehole23]

Now Congress/Biden, aka taxpayers, giving US chip mfrs $10Bs to invest

low taxes = buybacks, no investment, then taxpayers bail out chip mfrs with $10Bs to invest.

Biden isn't repealing the Trump tax cuts.

[Spurtacular]

Biden isn't repealing the Trump tax cuts.

How do you feel about that?

[Winehole23]

once upon a time stock buybacks used to be strictly illegal, but this would be a start.

buybacks mainly serve to enrich upper level managers and investors without any concrete benefit for productive capacity, innovation or society at large.

Democrats Eye Taxing Stock Buybacks and Partnerships to Pay for Agenda


Senate Democrats say a 2 percent tax on the money companies use to buy back stocks and tightened rules around taxing partnerships would raise $270 billion for their $3.5 trillion social policy bill.

[Winehole23]

financialization squeezes profits for upper management and investors at the expense of productive capacity -- the real economy

[RandomGuy]

once upon a time stock buybacks used to be strictly illegal, but this would be a start.

buybacks mainly serve to enrich upper level managers and investors without any concrete benefit for productive capacity, innovation or society at large.

[FONT="]Democrats Eye Taxing Stock Buybacks and Partnerships to Pay for Agenda

[/FONT]
Senate Democrats say a 2 percent tax on the money companies use to buy back stocks and tightened rules around taxing partnerships would raise $270 billion for their $3.5 trillion social policy bill.

[RandomGuy]

financialization squeezes profits for upper management and investors at the expense of productive capacity -- the real economy

I get the feeling we may actually see some resurgence in US manufacturing.

I seriously wonder what effect all the stock buy backs have collectively on reducing the number of outstanding shares available for trading.

Fewer shares = more volatile.

[baseline bum]

"we're too dependent on Taiwan"

TSMC is by far the best fab in the world and their 7nm process just wipes the floor with Samsung's 8nm process. It's one of the reasons why AMD gaming gpus actually consume less power than Nvidia's for once even though Nvidia has way better engineers, because AMD bought out a ton of TSMC's 7nm production and Nvidia had to go to Samsung instead. Intel is even worse, their new processes have been failure after failure to the point they have had to slash prices to the bone to compete with AMD's way better cpus on TSMC 7nm.

[Winehole23]

TSMC is by far the best fab in the world and their 7nm process just wipes the floor with Samsung's 8nm process. It's one of the reasons why AMD gaming gpus actually consume less power than Nvidia's for once even though Nvidia has way better engineers, because AMD bought out a ton of TSMC's 7nm production and Nvidia had to go to Samsung instead. Intel is even worse, their new processes have been failure after failure to the point they have had to slash prices to the bone to compete with AMD's way better cpus on TSMC 7nm.

Making that people want and need is the real economy. Buying and selling financial products isn't productive unless the profits fund production.
i

[Winehole23]

how is gutting profitable newpapers good business?

[DMC]

TSMC is by far the best fab in the world and their 7nm process just wipes the floor with Samsung's 8nm process. It's one of the reasons why AMD gaming gpus actually consume less power than Nvidia's for once even though Nvidia has way better engineers, because AMD bought out a ton of TSMC's 7nm production and Nvidia had to go to Samsung instead. Intel is even worse, their new processes have been failure after failure to the point they have had to slash prices to the bone to compete with AMD's way better cpus on TSMC 7nm.

Samsung is a hole run like a concentration camp.

But as far as ramping up production, fabs in the US not named Samsung (meaning owned by shareholders) are always somewhere in the cycle of hiring and laying off. They get a big order, they hire. TSMC takes the order, they lay off. On and on. It's extremely expensive to retool for smaller linewidths and larger wafers. In fact many if not most fabs in the US cannot convert, they have to rebuild from the ground up because the foundation and layout won't support the needs of the technology, like stability for photolithography, power needs and cleanroom requirements/automation. It becomes an issue of "we have a huge order we could fulfill in 6 months with a 8" fab or 2 months with a 300mm, and they look at the cost of conversion and it's not worth it if the orders aren't guaranteed to keep coming.

[boutons_deux]

Private Equity Funds, Sensing Profit in Tumult, Are Propping Up Oil

These secretive investment companies have pumped billions of dollars into fossil fuel projects, buying up offshore platforms, building new pipelines and extending lifelines to coal power plants.

Since 2010, the private equity industry has invested at least $1.1 trillion into the energy sector —

double the combined market value of three of the world’s largest energy companies, Exxon, Chevron and Royal Dutch S

Only about 12 percent of investment in the energy sector by private equity firms went into renewable power, like solar or wind, since 2010,

Private equity investors are taking advantage of an oil industry facing heat from environmental groups, courts, and even their own shareholders to start shifting away from fossil fuels, the major force behind climate change.

As a result, many oil companies have begun shedding some of their dirtiest assets, which have oftenended upin the handsof private equity-backed firms.

https://www.nytimes.com/2021/10/13/c...sil-fuels.html

Destructive, predatory Capitalism really sucks, will destroy or kill anything or anybody to amass more Capital

[SnakeBoy]

https://www.zerohedge.com/markets/wh...lt-coming-days

[boutons_deux]

Making that people want and need is the real economy. Buying and selling financial products isn't productive unless the profits fund production.
i

Money making money is neoliberal Capitalism. Inhuman, sterile, surgical, bloodless, destructive, but fantastic for the Capitalists.

Capitalists buy companies, and now one Capitalist predator is buying newspapers, load them up with debt, strip/liquidate their assets, kill jobs, pension obligations dumped on taxpayers.

When there's no more money to extract, Capitalists leave their victims weak and heading toward dissolution.

=================

U.S. Billionaires Wealth Surged by 70%, or $2.1 Trillion, During Pandemic;

They Are Now Worth a Combined $5 Trillion

https://www.commondreams.org/newswir...c-they-are-now

[Winehole23]

[boutons_deux]

Stock buybacks were illegal until the 1980s when the oligarchy bribed them into legality

[Winehole23]

[Winehole23]

Predatory extraction

https://twitter.com/RudyHavenstein/status/1700201544552165709?s=20