Nov 02

Bernanke the hero

“For Every Job Created In The US This Decade, US Corporations Spent $296,000 On Stock Buybacks”:

Yesterday in “$20 Trillion In Government Bonds Yield Under 1%: The Stunning Facts How We Got There“, we did just that: showed several “facts” demonstrating how, as Bloomberg puts it this morning, “QE Helped Wall Street Steamroll Main Street.

It appears many missed the findings of how central planning has now gone full retard, so here again, are the facts:

  • There have been 606 global rate cuts since LEH
  • $12.4 trillion of central bank asset purchases (QE) since Bear Stearns
  • The Fed is operating a zero rate policy for the longest period ever (even exceeding the WW2 Aug’37-Sep’42 zero rate period)
  • European central banks operating negative rate policies (Swiss policy rate currently -0.75%; Sweden’s policy rate currently -0.35
  • Just this month, the PBoC cut rates, the ECB confirmed QE2, Sweden announced additional QE, and the BoJ promised additional easing if necessary “without hesitation”
  • $6.3 trillion global government bonds currently yielding <0%
  • $20.0 trillion global government bonds currently yielding <1%
  • An investment of $100 in a portfolio of global stocks & bonds (60:40) since the onset of QE1 would now be worth $205; in contrast, a wage of $100 has risen to just $114 over the same period
  • US prime (“CBD”) office real estate has appreciated 168% this decade; in contrast, the value of US residential property across America has risen just 16%
  • For every $100 US venture capital & private equity funds raised Jan 1st 2010 they are now raising $275; in contrast, for every $100 of US mortgage credit extended and accepted at the beginning of this decade, just $61 was extended and accepted in June 2015 (see Chart 6 – a big reason the US consumer remains so moribund)

qe winner 2

And, as per the title, the punchline:

  • For every 1 job created in the US this decade, US corporations have spent $296,000 on stock buybacks

Just as we warned would happen nearly four years ago.

* * *

We conclude with, what else, America’s most progessive thinking.

Bernanke the hero

 

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