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August 11, 2020 | Financially Destructive Policies Ripe For Review

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

As the worst pandemic in a century forces the world to look for new ideas to expand the multiplier effect and more efficiently share resources through a depressed global economy, policies that have helped extreme wealth pool in a few at the expense of the rest are up for much-deserved review. Today’s historically low corporate tax rates and rampant stock buybacks are fat targets.

American companies today spend billions on stock buybacks. So what does that mean for the US economy? And how did it help make American CEOs so unbelievably rich? Here is a direct video link.

The chart below offers a sense of just how extreme global stock prices (in blue since 2001) have become as world GDP (in orange) has flatlined since 2018.  The value of global stock markets has surpassed the value of global GDP (far right red boxes).  In 2008 (left red box) a similar overshoot preceded the much-deserved halving of stock prices.

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August 11th, 2020

Posted In: Juggling Dynamite

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