What do you think about big banks buying back their shares in large amount?
Recent revelations show many large banks use their huge cash reserve to buy back their own stocks. Is this a good strategy? Why are they not giving out loans?
This is plain awful because they are monetizing their debt. If we normal citizens did this then declared to have less debt we would be jailed for committing fraud.
Here is the article that caught my eye -
https://uk.finance.yahoo.com/news/wall- … 24045.html
Aren't banks suppose to lend and get profits?
No, they are not. Banks are to make money on interest paid. They should not be permitted to buy their own shares. The reason is this; the more they purchase their own shares, the less debt they have to declare on their books.
I think it means that they are off the government radar once again. Since 2008 little has been done by the government to reign in the banks, and the financial industry. They were rewarded for the failure in 2008, and now they are moving freely about to search for their next failure. After 2008, the banks weren't loaning money, even to each other. And especially not to the people that lost their homes because of the shady loans they had received from them.
I think this subject should be part of the presidential campaign so we don't have to guess what congress and the president intend to do about the financial industry.
The problem I have been hearing is that the banks have not been loaning even to people who are qualified to buy houses. They are hoarding the money.
Here is why they are doing such; the less debt they have on their books, the more profitble they look.
The more profitable they look, the more money they will be granted from the Fed and the more attractive they will be to potential shareholders.
And that is why the government had to bail them out.
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