$250 Billion Is Coming ‘Home’! But There’s A Catch If You’re Hoping For A Buyback Bonanza
Ok, so here we are nearly nine months on from Trump's original "something phenomenal is coming on taxes" promise made seemingly out of the blue at a February 9 meeting with airline executives, and we still don't know precisely what this "phenomenal" thing actually is let alone when it will be realized.
Lots of information about what's set to be unveiled on Wednesday has been leaked ahead of time, with the latest information coming from WSJ which about an hour ago reported that the plan "will op
Given the instability of the US government now – especially its Executive Branch (Trump Administration) and the Dept. of Justice – who in their right mind would bring secure funds home to a US economy that has little to no competitive growth capability?
Unless huge trade tariffs are also initiated by the Trump Administration – US competitiveness isn’t likely to change in either US or global markets. Even with tax advantages – you still have to be able compete globally and make money. If there were such trade barriers – it would be temporary because they have never worked well historically – simply because they become reciprocal. Tit for tat tariffs generally end in economic paralysis of the least competitive economy. Only in the bizarre Trump-topia of proud ignorance, denial of history and facts – would any of these failed 19th century economics be considered – much less ever take place.
“The “bad” news is, companies will be less inclined to buyback shares with the money they bring home because… well… because their shares are in bubble territory.”
Valuations are higher now than after the 2004 holiday, but I’m not sure that will be too much of a deterrent. I’m not always a proponent for buybacks versus long-term investment, but I don’t see where companies will be able to actively use all this cash. If they do largely avoid buybacks, I could see M&A ticking up. Maybe they retire debt? If they are concerned about current valuations, maybe they just wait and buy the dip.
By the time this gets enacted, we may have had two more hurricanes, Manafort is indicted and the (2) egos have clashed with collateral damage for us all.
Contingency Planning anyone?