U.S. is Now the Land of Opportunity for Hedge Funds, Not We the People

The only opportunity left is for the hedge funds, private equity groups and venture capitalists to buy up, own and dominate every sector of the economy.

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As we have long noted, by the facts, Wall Street and Main Street are worlds apart and have no interrelationship. 

On the market front, again, as we have continually detailed, the one-percent own some 54 percent of all the equities, and when you add up the top 10 percent in total, they own 90 percent of the stocks.

It is clear proof of who runs and who ruined what was once called “The Land of Opportunity.”

The only opportunity left is for the hedge funds, private equity groups and venture capitalists to buy up, own and dominate every sector of the economy—from railroads to airlines, from media to medicine, from healthcare to hotels, from farms to food chains, from restaurants to retail, from manufacturing to movies—across the business spectrum they own America.

On the stock market front, the game is rigged for all to see. But being that the vast majority of Americans are deaf, dumb and blind to hard facts and indisputable data and only swallow the crap being fed to them by politicians and Presstitutes—the media whores who get paid to put out for their corporate pimps and government whore masters—they don’t have a clue.

Unquestionably, equities and the economy spiked because of the countless trillions—between $6 to $8 trillion—Washington pumped into the system to fight the COVID War… that imbeciles call “The Pandemic.”

Yes, that’s what the politicians and media blame for the 50 percent office occupancy rate and countless millions of lives and livelihoods that were destroyed by the “The Pandemic”! 

Ask yourself and ask others: “How many people do you personally know, friends and family, who died from the coronavirus?” 

Do you know someone who died, how old were they and how many preexisting co-morbidities were they suffering from? 

Can you count them on one finger?

Equities also spiked because of the zero-interest rate policy that allowed the money junkies to get their monetary methadone for next to nothing so they could play the markets and buy up more businesses.

On the buying up businesses front, we reported that merger and acquisition rates were the biggest on record in 2021. And while global buyout deals have gone down 35 percent last year from the 2021 highs, according to Bain & Co., in 2022, buyouts were still the highest since 2007… just before the Panic of ’08.

And as for the equity market scam read all about it:

WSJ: Buybacks Set Pace for Record Repurchases among S&P 500 companies are projected to top $1 trillion for first time

U.S. stocks have received support from a key source during 2023’s shaky market environment: companies repurchasing their own shares.

Stock buybacks by companies in the S&P 500 are projected to top $1 trillion in 2023 for the first time in a calendar year, according to S&P Dow Jones Indices. Authorizations for repurchases are picking up pace: As of Feb. 17, they totaled more than $220 billion, a record for that point in the year, according to a Goldman Sachs analysis of S&P 500 and Russell 3000 companies. (The Wall Street Journal, 28 February 2023)

So here’s the deal, the Dow is down 4 percent for the month and down year to date because the money junkies fear that the Fed will keep raising interest rates and it will cost too much to get their heavy fixes of monetary methadone that allow them to gamble in the markets and keep buying up whatever businesses they want wherever they want. 

Therefore, to keep the game going, when a company buys back its stock, the increased demand pushes prices higher. It’s a supply-and-demand scam. The less supply the higher the price. Back in 2017, when then-President Donald Trump pushed through his tax breaks for the Bigs, we reported that “Since the Panic of ’08, U.S. companies have bought back some $5 trillion of their own stock. Without the stock buybacks, stock values would have been negative from then to now.”

And according to The Wall Street Journal, “Mega-cap technology companies were among those spending the most on buybacks in the last three months of 2022. Apple Inc. spent about $19.5 billion on stock repurchases, Meta Platforms bought back about $6.9 billion of its shares, and Microsoft Corp. repurchased about $5.5 billion of its stock.”

The Street is estimating buybacks will be over $1 trillion this year.

WSJ also noted that in his State of the Union address this month, President Biden took a shot at big oil companies that used record profits to buy back stock while proposing quadrupling of the current 1 percent federal tax on buybacks.

TREND FORECAST: As we noted in “Corporations To Return to Buying Their Own Stock” (18 May 2021), the Bigs getting bigger trend will continue to persist.

Rather than re-investing to build their business and for capital improvements in research, development, new equipment, new products, and in paying their workers enough to keep up with inflation… when corporations buy back their own stock, the benefits flow to shareholders, market gamblers, and the executive suite. Again, it’s about supply and demand—the more stocks they buy, the less supply. The less supply, the higher the price goes.

The Bottom Line

Where the equity markets and the economy are headed is simply based on where interest rates are heading. The higher and faster interest rates rise, the faster and deeper stocks and the GDP will fall. 

Hitting the highest rate since 1999, when they launched the euro, consumer prices in France rose 7.2 percent in February and in Spain they were up 6.1 percent compared to the 5.9 percent jump in January.

As we have reported, the higher interest rates rise, the more governments’, businesses, and private sector borrowing costs go up. Thus, a bad situation will be made much worse.

After denying that inflation was spiking—and making fun of those of us who said it was going to hit multi-year high—the European Central Bank is now bragging that they will raise interest rates (which were minus 0.5 just seven months ago) another 50 basis points when they meet on 16 March. 

Bringing the benchmark rate to 3 percent, considering the inflation rate across Europe, the bank rate is still deeply in negative territory. 

To illustrate the facts that as interest rates rise, economies go down, in the EU, with real interest rates deep in negative territory, Germany, Europe’s economic powerhouse, saw its economy shrink 0.4 percent in the fourth quarter. 

Making a bad situation worse, considering the real inflation rates, the economies are not going into recession, they are diving into Dragflation: Declining economic growth and rising inflation… as the data proves but the mainstream business media denies.

Need more proof? Today it was reported by market researcher Kantar that grocery prices in the U.K. hit a new record in February, spiking 17.1 percent.