18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,784 Blog Posts

UNDERSTAND SOMETHING: The Market Runs on Crack

Most of you don’t know what the fuck is going on, so let me explain it. Read the headline below.

Now read this.

To fund these aggressive buybacks, Corporate America has been forced to draw down their cash balances.
Nonfinancial S&P 500 companies slashed their cash holdings by $272 billion over the past 12 months, according to Goldman Sachs. Although that still leaves them with a ton of cash, the 15% decline marks the largest since 1980, the firm said.

Here’s another way to look at it: Goldman Sachs found that nonfinancial cash balances as a percentage of assets has declined from 12.7% in June 2017 to a nine-year low of 10.4% now.

Buybacks got a bad name when bullshit companies like JCP wasted billions on them. Bear in mind, you can only put lipstick on a pig once. After too long, the charade is over and everyone is looking for bacon. But if applied smartly, correctly, share buybacks are rigging machines — fucking with earnings ratios and forcing people to bid up shares.

Earnings get a boost and PE’s reduced. So what ends up happening is IARs and their stupid clients prance around on Wall Street feverishly sopping up shares because the MUH PE is cheap and earnings are attractive. This, as you now know, is a fraud — perpetuated for one single reason: BOOST SHARE PRICES.

Apple’s historical PE and share count.

Share buybacks very possibly could reach $1 trillion this year.


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  1. jbandy

    This is one of the most coked up markets I can remember in the 25 years I’ve followed them. Boy do I feel like an idiot for not making AT A MINIMUM a 50% return this year. My 36% return feels pathetic.

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  2. asteroids

    Debt is debt. There will be hell to pay when your banker calls your loan and you have zero cash on hand.

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