The rising market has been both a fiscal and
important psychological bootstrap for pulling
us out of this protracted 'recession'. Bernanke
would be killing the golden goose if he interfered
with the markets at this point - and he KNOWS it.
Companies buying-up their own stock can have
several meanings. It can be a scam - making
their companies look more successful to the
general investor than they really are.
However it can also be a quest for more CONTROL.
One of the more dangerous evils of the modern age
is individualized instantaneous electronic stock trading.
This is a dinosaur-killer asteroid just waiting to strike
global finance. We've already seen some smaller
impacts.
Thing is, neither the Joe Averages who do this OR
the 'intelligence' built into their computers have a
clue as to what's the right thing to do. The aim is
always focused on he VERY short term and thus
minor bad news can instantly ripple outwards, ever
amplified, and do terabuck damage to the markets.
Electronic trading is a positive-feedback affair, and
thus can oscillate out of any control in an instant.
A stock dips slightly, lots of computers instantly
sell, causing it to dip more, triggering more and
more automatic sells. Then it spreads to sectors,
not just an individual biz. Kaboom.
SO, if I was a big-biz guy and at least currently
had a wad of cash, I might want to reduce my
exposure to the brainless whims of todays
investors. More self-ownership = stability.
In the medium term, stability may be more
valuable than outright profits or share prices.
Stable businesses can weather a storm. The
rest, well, you'll get THEIR customers after
they go belly-up and sink.
Oh, and there's ANOTHER bubble that does
seem to be deflating - gold. LOTS of people
put LOTS of money into gold, even when the
price had risen into the 1500s and beyond.
Some thought they'd get rich, most were
looking for 'safety' ... but ALL are gonna get
burnt badly as the price keeps dipping.
Like housing prices, a lot of people have
begun to realize that gold was just plain
overpriced ... and now they're not gonna
buy. Indeed they'll wanna sell.
We'll see if the gold bubble smoothly 'deflates',
or whether it pops violently like the housing/credit
bubble did.