What could possibly go wrong?
– And The Biggest “Source Of Equity Demand In Recent Years”, According To Goldman Sachs, Is…
Spoiler alert: it’s not the Fed, even though the portfolio rebalancing channel courtesy of a $4.5 trillion Fed balance sheet certainly assured that the artificially inflated bubble in stocks, as a result of the Fed’s own purchases of bonds, is unlike anything seen before (and to all those debating whether the bubble is in bonds or stocks, here is the answer: it is in both). The answer, according to Goldman’s David Kostin is the following: “From a strategic perspective, buybacks have been the largest source of overall US equity demand in recent years.”
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But who needs growth when the Chief Executives of America’s largest corporations are about to trickle down their record, stock-buybacks driven bonuses for yet another year.