Article in the NYT and WSJ suggests that large corporate insiders have been hit with margin calls for their stock. I will also note that we have not heard of major corporations initiating stock buy-back programs. This could be for two reasons. One, stocks are not cheap, or two, the money is not available for firms to borrow in order to buy stock. Could be a little of both, but it is sign that we may not be through the woods. In 1987, buy-backs were strong right after the crash. Of course, there as less certainty abut a pending or existing recession.
We would like to see corporations buying stock during this time but I will not hold my breath until funds get cheaper.
No comments:
Post a Comment