Hidden players

Michael Hudson talks about company share buy-backs which fuelled stock-market rises but which indicate financial engineering has become the dominant activity, rather than investing in production, owing to the availability of cheap money.

Behind the Market Crash: The Smoke and Mirrors of Corporate Buybacks By Michael Hudson
"We’re in a debt deflation now. The 99 percent of the people are so busy paying off their debt that what is counted as savings here is just paying down the debt. That’s why they don’t have enough money to buy goods and services, and so sales are falling. That means that profits are falling. And people finally realized that wait a minute, with companies not making more profits they’re not going to be able to pay the dividends."

Markets have been riding a roller-coaster, plummeting early in the week followed by sharp rallies in the last two days. Given banks' propensity to manipulate markets, it's worth rereading Matt Taibbi's excellent The Great American Bubble Machine which provides insights into how bankers profit from crashing markets to buy assets on the cheap from distressed sellers.

Crashing markets plunged the world into chaos in 2008, since when the global economy has been on "life -support" in the form of cheap money which has inflated asset prices and speculative bubbles. Unless the power of the banks to create money at will is removed, the spiral into collapse will continue.

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