Really great stuff. I can't say I've put too much thought into this specific issue (I have looked into other related ones), but it all makes perfect sense when you think about it. Right under our nose. It's a shame that hardly anyone is paying attention.
He's so right. China's Huawei is the example who are the people create value. Huawei is owned by all the creators, engineers, scientists, and workers of the company. They will never go to stock market.
This guy is 100% right, if you give all the value to the owners, the assets are manipulated to further enrich the owners and markets are lost in fundamentals, im sorry to all you libertarians but redistribution ensures free markets.
@mitch letterman, You have it wrong. Assets are being manipulated to enrich the top *managers* , not the owners. Over the decades, Congress has steadily shifted power away from owners with a long term interest in the viability of their companies to managers who want to maximize their bonuses before they bail out with their golden parachutes.
@@SebSpeaks Yeah, but wasn't the income tax rate 95%? Forcing the wealthy to put their income into investments or get paid in investments in order to keep the wealth in the US. Now, US investors and hedge funds invest in totalitarian regime, while TRILLIONS of our tax dollars are spent building a war machine to combat the totalitarian regime the US Investors are building.
I don’t understand how can this speaker have any credibility except to special interest groups. When you only talk about the inequality of the distribution of reward when you completely discount the risk disparity people voluntarily took in the first place. It’s like someone who only buys treasury notes complains about the yield of someone who buys junk bonds. “Jesus, how can you have 8% yield when I only get 1% yield. If you lose money buying junk bonds, then too bad so sad. But if you make money buying junk bonds, then it must be because of inequality of wealth distribution.”
@Tarzan First of all, I was obviously not talking about the part where he complained about stock buybacks. Second of all, stock buybacks are not corruption. If you buy a stock without doing your due diligence and check the company's balance sheet and cash flows, it is your own problem, not the CEO's fault. A complaint about other people exercising their right to buy back their stocks is not a "legitimate" compliant by any stretch of the definition of the word "legitimate".
@@mr.eccles2736 But you're not understanding the effects of getting an infinite supply of 1% interest loans for any amount, then using that infinite money to buy back your stock, then once it's high enough selling and enriching yourself. Then the stock plummets bc it was artificially pumped with low interest loans that you overleveraged onto your company. Another BUBBLE *POPS* The Public pays the bill bc the govt gave out the loan, mainstreet is laid off, and the wealthy relax in their mansions thinking about the next strategy to manipulate the market. Well, not this time. If they do it again Democracy dies, the music stops, and all bets are off.
Well, exactly... stock buybacks are not the problem. The federal reserve printing currency out of thin air and giving it out so cheaply to institutions of their choosing is the problem.
R R what I really don’t understand is why are you contradicting a point I never made. I never said money printing and low interest rates will not create moral hazard.
@@jakesandstorm8329 It's the only Economic lever the Political class will allow them. Income tax rates used to be 90% ensuring US wealth was invested in the US. Stock Buy Backs were illegal ensuring US Profits were invested in R&D, which is now mostly done in Asia bc they DO have those laws in place. US profits were also used to hire Ph.Ds and continuously invest in Research for both companies and governments. NASA, the Manhattan Project, ect The US is economically strong, yes, energy independent and now a major exporter as well, yes, but more and more the economic incentives inside our system are geared towards keeping the wealth where it is, instead of cycling it up and down thru the economy. The Lowering of the capital gains tax to nothing for example.
Coming back to this in late march as the Senate votes 94-0 in favor of a $2 Trillion bailout which includes, among I'm sure hundreds of other blights in it's 880 pages, a huge bailout for Boeing.
Tyler Johnson don’t forget the bailout of the airline companies. Airlines bought back $50 billion in stock to juice the earnings per share which allowed the executives to get bigger bonuses. Airlines did not improve efficiency, add workers, or built the company infrastructure. Guess how much money was GIVEN to airline companies. Yup you guessed. $50 billion us.
A somewhat simplistic view of buybacks. Do they impact share prices (market manipulation)? Hopefully yes! Like dividends they return cash to shareholders. Reinvesting back into the company can be risky. To the extent that reinvesting cash back into a business increases supply, it hurts profits. A second way that reinvestment can hurts profits, is that pretty much every dollar reinvested back into the company is ultimately expensed whether immediately or over time. So reinvesting back into the company can hurt both pricing and costs, not a big plus for shareholders. Can some companies reinvest large profits back into the business efficiently? Of course some can, but not all. Take banking. Can banks reinvest their profits back into the business? For the average banks, the answer is no.
mcdonald duglus company went down for exact same reason what boing is having problems now.... they rushed a production of their plane and did not redesign the cargo door which caused two accidents , one where everyone died. i think the plane was DC10 and it crashed in france...
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