1 month agoCue the video:
My take: I’ve never seen the Squawk hosts interrupt and talk over their guests as much as they did the junior Senator from Massachusetts yesterday.
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on The New York Times turns its nose up at Apple’s special events 'The rod up that man’s butt must have a rod up its butt.'
on The New York Times turns its nose up at Apple’s special events 'Pogue was the high point for the NYT’s tech page.'
on The New York Times turns its nose up at Apple’s special events 'Shira has a sour style. I don’t know her, maybe it’s her personality. 🙂'
on The New York Times turns its nose up at Apple’s special events 'In defense of the NYT: Shira Ovide is not the NYT – she is a tech columnist for the paper…'
on The New York Times turns its nose up at Apple’s special events 'Up voted all four preceding posts. Ovide writes well, but after that he/she is a click bait whore taking the…'
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on The New York Times turns its nose up at Apple’s special events 'Exactly. What a mad-lib-styled fill-in-the-blanks bit of a time waster. Not sure how that is attractive to anyone unless they’re…'
on The New York Times turns its nose up at Apple’s special events '“The NYT is a stale product that has long outlived its usefulness as journalism. Like so many on-line websites, its…' on The New York Times turns its nose up at Apple’s special events 'More like the NYT Tech review team is less and less relevant in this age of direct to consumer messaging…'
on The New York Times turns its nose up at Apple’s special events 'Why do NYT and other “news” publications hire narcissistic writers and talking heads to posture for “hits” to make money.…'
The good Senator’s objective, as is the party with whom she is associated, is to raise more taxes. By stopping companies’ buybacks and funneling that money instead into dividends the government collects higher taxes to run a socialistic form of government. It’s all about finding new sources for government income.
“…socialistic form of government.”
Socialist, Jerry? Really? Thought we had vowed to keep politics out of this forum.
But if you’d like me to comment, then I’d be MORE than happy to oblige….
Or you could just cool it.
Reagan appointed John Shad to head the SEC in 1981. A former vice chair of a major Wall Street securities firm, Shad was the first financial executive to head the agency in 50 years, and it showed. In 1982, the SEC adopted rule 10b-18, which provides a “safe harbor” for companies in stock buybacks. As long as companies stick to specific parameters — such as not buying more than 25 percent of the stock’s average daily trading volume in a single day — they won’t be dinged for stock manipulation.
William Lazonick, an economics professor at the University of Massachusetts Lowell whose Harvard Business Review paper “Profits Without Prosperity” has influenced thinking on stock buybacks, said Shad’s appointment to the SEC and the accompanying changes, including rule 10b-18, brought about a shift at the agency that continues today.
“Everything they did from that point forward … was turning the SEC from a regulator of the stock market to a promoter of the stock market,” he said.
https://www.vox.com/2018/8/2/17639762/stock-buybacks-tax-cuts-trump-republicans
From the link: “The concern is that companies, especially in prioritizing buybacks, are rewarding stockholders instead of investing in their workers, research and development, new facilities, or other more productive arenas. Firms also sometimes use buybacks to prop up their stock prices, and corporate executives reap the financial rewards.”
Point #1 does NOT apply to Apple. Point #2 does, but there’s a caveat:
Apple’s stock was under siege for literally years. As very small investors in AAPL, we bore the brunt of the absolutely horrible valuations, since following the Great Recession in which we both lost our jobs, and as senior citizens, the only thing we had was our AAPL stock. For years, we shelled out undervalued stock to pay our bills, with no other recourse. Then Apple took advantage of this “loophole” in a very big way, and literally rescued us. They underpinned their value with their cash flow. And btw, this all began long before the $1.5 trillion GOP tax cuts referenced in the article’s lead-in.
(continued)
It took years for Apple to sop up enough stock so that they were no longer in danger of being bullied by the market. (None of this, btw, is acknowledged by Senator Warren; not the impact of a carnivorous market on the small stockholder, not the rescue by Apple, not even Apple’s good deeds and exemplary ethical behavior.)
Is there a case for Apple to start shifting from buybacks to dividends? Maybe. But we have to remember the Apple is more aware of its future earnings potential than we are. (Again, Senator Warren can’t possibly have better knowledge of that than Apple.) Apple has a fiduciary responsibility to its stock holders (many of whom, btw, are ex-Apple employees, still be rewarded for their contributions). Until the laws are changed, that has to remain their goal.
That said, Squawk hosts were rude.
Her target is too high. There is no such thing as trickle down. Money flows uphill. Those at the top wouldn’t be anywhere near as wealthy without deficit spending. Money gets half, therefore the government should get half of income above a threshold ($500,000?).
Income of $1,000,000/year: tax $250,000, effective rate 25%. Left to live on: $750,000/year.
Income of $2,000,000/year: tax $750,000, effective rate 37.5%. Left to live on: $1,250,000/year.
Income of $10,000,000/year: tax $4,750,000, effective rate 47.50%. Left to live on: $5,250,000/year.
Since Reagan’s tax bill the wealthiest have been getting wealthier, while the middle class has been shrinking. Trump’s tax bill has been speeding up the process.
In a healthy economy money recycles with some accumulation at the top. If the accumulation goes unfettered you end up with two economic classes: haves and have nots.
A balanced budget is a myth. Deficit spending is a necessity. Because of accumulation at the top the economy would suffocate without it. It’s akin to recharging your EV or putting gas in your ICE.
I recall the days when there was a graduated income tax. It had only one fatal flaw: It wasn’t properly indexed for inflation. As a result, when your paycheck was adjusted for inflation, it drove you into a higher tax bracket. Great for congress-critters, because they never had to vote for a tax increase. Not at all great for the lower and middle class.
Mr. Reagan used that unfairness to COMPLETELY take off in the other direction, and we’ve been suffering from it ever since. All that needed to be done was to index that graduated tax for inflation.
Learn from history, or repeat it, folks.
Let me share some quotes:
“Thought we had vowed to keep politics out of this forum.”
“Or you could just cool it.”
Interesting comments, in light of the fact that just a few paragraphs later you share multiple politically related comments.
Since politics invade every aspect of our life (and investments), and PED, a politician, enjoys blogging about political events related to aapl (and rightly so), here henceforth will be my goal.
I will not complain about political statements, nor tell others what they can say or not say (that’s up to PED). I will complain about political censorship or pressure to “shut up”. If you disagree with someone, please argue against their suppositions, not their right to state their beliefs.
I guess another option would simply declare this site red or blue, and ask the other ‘side’ to either remain silent or leave.
“Interesting comments, in light of the fact that just a few paragraphs later you share multiple politically related comments.”
Really? I said something comparable to “socialist form of government”? Pray where? I’ll give you a hint: You won’t find it.
This blog has a rule about political commentary. Jerry crossed the line. I also didn’t tell Jerry to “shut up”. I told him that, if he kept going down this line, I would do likewise.
And if The Boss decides to shuck my comments, your comments, and Jerry’s comments, then so be it. But I will not tolerate blatantly breaking the rule. Period.
PED- would you be so kind as to share this rule with all?
This would be a good opportunity to clarify.
Saying “stock buybacks” are only for stock manipulation is unfair at best and untrue at worst. Saying “dividends” are the answer because “buy backs are manipulation” might make for a good soundbite but doesn’t make any meaningful contribution or address the issue.
Her gripe is that dividends avoid a tax hit. Can’t disagree. But buybacks of UNDERVALUED STOCK is extremely important in this carnivorous market we live in today. Otherwise, as has been clearly seen with Apple, a stock can be taken down by market manipulators, harming investors. And if those investors are small, that can be fatal, especially if they’re also elderly or otherwise dependent on their investments.
Still, this is all “squishy” stuff. What’s a correct valuation anyway?
BTW, she also ignores that the main value of buybacks is for long term holders. I thought that’s what the government wanted….
What was AAPL share price on open Sept. 1, 2020? $120.96. What is it end of today? $122.06, intervening low of $106.8 (+12.1% from the low), high of $145.09 (-19.4%) from the high. So with all that buyback “market manipulation”, AAPL stock has literally tread water for long term investors and had positive and negative gyrations in line with the markets. The net affect of Apple buying back its own shares is IMO to increase shareholder % ownership and use ITS OWN MONEY in the best way it legally sees fit. Dividends?, sorry, if I want dividends, I’ll buy a utility or oil stock (ugh).
Apple IS investing in its R&D, employees, products, facilities literally to beyond anyone else in the market (Amazon, Tesla, Google seem to do it in select areas but not, IMO across the board).
irony: in former communist countries one pay less tax than in the capitalistic world.
“Former” communist? If it looks like a duck…
And what price freedom? Nothing wrong with taxes per se. They need to be non-onerous, and they need to be fair. In the US, they aren’t fair, as Gregg pointed out. Those who think they’re fair already don’t have enough familiarity with those struggling to get by.
I understand that she’s thinking she’s targeting just the wealthy, but there’s a lot of small investors that own AAPL. In our case, buybacks literally saved us from an extremely predatory market.
Buybacks aren’t a market manipulation: They’re a RESPONSE to market manipulation, manipulation that was driving AAPL, and the investment of folks like us, into the ground. Take away the market manipulation, and there’s no longer a need for buybacks.
But the forces opposing that are far too powerful for Senator Warren, so she’s going after what she sees as an easy target and one that she can paint as greedy.
But it won’t wash, Senator. People know Apple isn’t greedy. They’re just successful. They’ve simply outsmarted the competition at every turn, that’s all.
And they’ll outsmart you as well, unless you get a clue.
Maybe rules that must be met?:
– need a threshold of profitability over a period of time,
– pay some minimum level of corporate income tax,
– and that executive compensation is not tied to stock price.
Apple checks these boxes.
The airlines that we’ve been bailing out, in my mind, did abuse share buybacks.
if you forbid the one than you also should forbid the other.
politicians often do not understand economics
they think its always there as a gift from heaven.
only people from Finland know otherwise
after one devil from USA visited their heaven and wrecked heavoc.
Apple has split its shares many, many times. It does so to keep the stock prices affordable to the “little guy”. So no, it’s not down to that.
BTW, that’s why we have what’s called the P/EPS ratio: It takes the stock count out of the picture and equalizes valuations across companies. You can also do the same with a P/RPS ratio, which looks at Revenue Per Share as opposed to Earnings Per Share.