The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (56680)	3/23/2006 10:42:00 PM
From: basho	Read Replies (3) of 110194

Russ, another big factor supporting shares is the ongoing net retirement of corporate equities. Net issues last year (taken from the latest Z1) were minus $161.1 billion, the largest net retirement ever. Excluding financial corporates ($67.4 net issues) and US buying of foreign shares ($137.5 billion), we're left with the astounding figure for non-financial corporates of -$366 billion. The highest previous figure was -$215.5 billion in 1998. With net cash inflows into stock mutual funds and into ETFs as well as net foreign buying, it's like a perpetual short squeeze. As it was in the late 1990s. Much of this bizarre behaviour can no doubt be sheeted home to the pervasive influence of insider option holdings on management decision making. As of course can the sharp decline in dividend payments as a % of profits. The eventual washup of all this stupidity and cupidity will likely be a corporate scandal of unprecedented scope. As for what brings it all to a grinding halt, I only wish I knew.

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