From the September 2014 Issue, Harvard Business Review

(作者有新書:Predatory Value Extraction: How the Looting of the Business Corporation Became the US Norm and How Sustainable Prosperity Can Be Restored, William Lazonick and Jang-Sup Shin, Oxford UP, 2019)

股份回購的作用為何?在2003-2012年間,美國上市公司S&P500中449家公司,用了54%的收益(2.4兆美元)來買回其股份,幾乎全是在市場上購買,其餘37%用來分紅,剩下極少%才用來進行投資! 在2012年,全美500個所得最高的CEO平均每人得到30.3百萬,42%來自stock options, 41% stock awards,亦即股份回購在短期內可以提升股票價格,改善EPS。

戰後至1980年代之前,美國公司對收益採取retain-reinvest做法,促進value creation而非value extraction。1970年代末開始採取降低成本、增加分紅的策略,downsize-and-distribute。0.1%所得分額增至11.3%/2012年。薪資停滯(只有1998-2000增了2%)。

Good buybacks: tender offers, a way for executives to have large share and care about the company’s future. (maybe 5% of buybacks)

Bad ones: to manage stock prices. The SEC instituted Rule 10b-18 of the Securities Exchange Act, to allow repurchase of shares with few restrictions (25%), and without fear of price-manipulation charges. CEOs are serving their own interests.

A related issue is the notion that the CEO’s obligation is to maximize shareholder value “MSV”. (Michael Jensen) The MSV school ignores other participants, like the taxpayers and workers, who bear risk. Thus, MSV is a theory of value extraction, not value creation.

Reform the system; put an end to open-market buybacks; rein in stock-backed pay; transform the boards.

3 examples of hypocrisy: 1) Exxon Mobile, received $600 million a year in government subsidies for oil exploration, spends about $21 billion a year on buybacks, and no money on alternative energy research. 2) After Intel’s lobbying, the government launched the National Nanotechnology Initiative (NNI) in 2001, through 2013 Intel’s buyback amount was 4 times the NNI budget. 3) Pfizer argues that drug prices are high because they need high prices to support research. But from 2003-2012, Pfizer funneled an amount equal to 71% of its profits into buybacks.

There is no need for the Treasury to put out its foreign exchange report on time this April. There are other, more pressing priorities. And if it does, the Treasury should exercise its discretion to allow those countries that came close to meeting the definition of manipulation last year off the hook.

Blog Post by Brad W. Setser  March 11, 2020

Taiwan’s central bank (the Central Bank of the Republic of China, or the CBC) helped make this an easy call with a significant increase in its disclosure last week.

It disclosed two things on Wednesday

One that its true foreign exchange position is over $600 billion, as it has over $30 billion in domestic foreign currency bank deposits as well as almost $100 billion in foreign currency swaps with local financial institutions.

And two, that its actual intervention in the market in 2019 was $5.5 billion ($6.6 billion if you look just at the second half of 2019, as it reported that it sold in the first half of 2019). That’s around a percentage point of its GDP, below the Treasury threshold. Remember all those Taiwanese bond ETF purchases? That’s a probably big reason why the CBC didn’t have to intervene that much, as the lifers could buy ETFs (technically local currency products) unhedged (though the ETFs do now carry a higher capital charge).


制造界 2020/3/13

以下文章来源于肖磊看市 ,作者Xiaolei

Capital and ideology

Thomas Piketty, Harvard University Press – March 2020


Extracts from the book and table of contents (pdf)

Figures and tables (list) (all)

Supplementary figures (list) (all)

Presentation slides (pdf) (short version)

Presentation slides (pdf) (long version)

Technical appendix (pdf)

Data series (xls)

All files (zip)