Bill Bonner: Is Bad News Good News for US Stocks?

Bill-Bonner2

“Everyone knows that even a little cutback in the Fed’s buyback program should mean falling stock and bond prices.  A trillion dollars a year is a lot of money – in fact, it’s 7% of GDP. Imagine a corporation with annual revenue of $100 billion. Imagine that it buys back its own shares at the rate of $7 billion a year. Then try to imagine what would happen to the share price when the largest single buyer drops out.  It doesn’t take a genius to figure it out. Even Fed economists can see it. That’s why they won’t taper. And everybody knows it.  That’s why bad news is now good news. And good news is good news. Everything Is Good News!”

http://www.bonnerandpartners.com/is-bad-news-good-news-for-us-stocks/

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