"Well, companies themselves have been causing this crisis as much as speculators, because companies like Amazon, like Google, or Apple especially, have been borrowing money to buy their own stock. Corporate activists, stockholder activists, have told these companies, we want you to put us on the board because we want you to borrow at 1 percent to buy your stock yielding 5 percent. You’ll get rich in no time. So these stock buybacks by Apple and by other companies at high prices can push up their stock price in the short term. But when prices crash, their net worth is all of a sudden plunging... this morning in the stock market was a huge wipeout of borrowed money on which people thought the market would go up, and the Federal Reserve would be able to inflate prices."
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Academics from the United StatesNon-fiction authors from the United StatesEducators from the United StatesHistorians from the United StatesEconomists from the United States
Original Language: English
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Behind the Market Crash: The Smoke and Mirrors of Corporate Buybacks, CounterPunch, (26 August 2015)
https://en.wikiquote.org/wiki/Michael_Hudson_(economist)
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Michael Hudson (economist)
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