The Rats Keep Pressing The Bar: Two Amazing Stories, One Inevitable Result

Anyone who doubts that the global financial system has run out of (good new) ideas has only to track the recent words and deeds of central bankers and mainstream economists: Slightly-negative interest rates didn’t lead people to borrow more? We’ll go more negative! Buying up all the government bonds didn’t prevent deflation? We’ll start buying corporate bonds and equities!

Still, it’s shocking to see where this endless repetition of the same actions takes us. A recent Bloomberg article, for instance, notes that even though corporate profits are falling and individual investors are dumping equity mutual funds, company share buybacks are surging:

Demand for U.S. shares among companies and individuals is diverging at a rate that may be without precedent, another sign of how crucial buybacks are in propping up the bull market as it enters its eighth year.

Standard & Poor’s 500 Index constituents are poised to repurchase as…


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