IBM is a poster child for the Fed’s financial repression policies. Zero percent interest rates allow big companies to issue masses of debt and use it to buy back shares. In its last quarter, IBM repurchased nearly $4 billion of stock, or about 93% of its net income for Q2 At the same time, it paid out nearly $30 billion in dividends. During that same period, IBM has drastically underinvested in its capital base, and in research, development and engineering. But IBM has sacrificed its balance sheet. Needless to say, under an honest free market in the financial sector, America’s once-greatest technology company would not be functioning as a slush fund for Wall Street gamblers. Excerpt from The Fed’s Financial Repression At Work: How Big Blue Was Turned Into A Wall Street Slush Fund” by #DavidStockman via #ContraCorner Read Now: bit.ly/1rMHPNS
Posted on: Tue, 29 Jul 2014 12:40:15 +0000
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