Quote:
Originally Posted by Bill Bumface
Disagree. While yes, buybacks can be totally benign in some scenarios, we now see buybacks at levels never seen before across industries.
This indicates that capital is so plentiful, that businesses can't keep up with allocating capital to their core value creation streams. It's a cheaper/easier lever to pop numbers for quarterly reports to make the execs look good. The whole point of capitalism is that capital gets allocated to value creation, and value creation has a side effect of job creation. The entire system is so slanted toward corporations right now that they have to find a way to basically dispose of their excess capital.
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This is my take on it as well. Suncor had billions to allocate for stock buybacks in Feb/Mar when the market was already showing signs of long-term weakness.
I hear it's "so bad" that even sustaining projects are suspended due to austerity measures.
All the extra capital that was burned on buybacks sure would come in handy right now