Friday, April 15, 2016

Corporation stock buy backs is like the Fed QE

Corporate buybacks sure have put a lot of “liquidity” in the hands of former stockholders.  This is like the Fed buying bonds and putting “liquidity” in the hands of former bond holders.

This is QE.  However, I don’t think former stockholders, all full of glee that they now have money in their checking accounts, are actually spending their new money.  I think they are putting it into savings accounts.  For the most part.

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