Goldman Delivers The Worst Possible News: “The Buyback Party Has Ended”
For years, net demand for US equities has been supported by corporate buybacks.
(Goldman)
This is a real simple dynamic. Central banks instigate a desperate hunt for yield, driving investors down the quality ladder thus driving down the cost of borrowing for corporate citizens.
Those corporate citizens take advantage of the appetite for corporate supply by issuing debt at artificially low borrowing costs then use the proceeds to fund buybacks which themselves artificially inflate corpora
Very interesting as Sgt Schultz would say. Some of those differences would be more informative if stated as “confidence intervals”, but the general trend in “Exhibit 3” is clear. Thanks for the information: I could parse most of it (I think). Did I read in one of your posts that you’re in cash: was that you, and if so, are you still?