(snip)"We are seeing this at home with negative savings rates that have been worsening steadily. The financial confusion sown by Greenspan when he dropped rates to a ridiculous level in 2002 still reverberate. Our banking system is out of whack, prices of assets rose much too high, all sorts of mischief is going on. I read in the Wall Street Journal today, much of the buying on Wall Street is actually big business buying not just each other but itself! Five years ago, buy-backs of stocks was only $25 billion. Today, it is $120 billion! Here is a thumbnail sketch of what is happening:
Of course, Wall Street would love to see this go on forever. But they know it can't. I would sugggest we are about at the high point for this sort of mastrubatory fun. Of course, this should be headline news. Just like it should have been headline news that Japan goosed up its M1 rates by 40% at the beginning of this infamous 'liquidity' cycle. The TV talking heads have been screaming at the bears that they are stupid because proof that all is well is the fact that Wall Street's stocks are rising in value! But if even only 15% of this is due to record buy backs and another 50% is due to buy-outs, this is bad news. "(snip)




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