Members, I said at many club meetings over the last 3 years that the party in the stock market would continue until the share buy back programs had more scrutiny. That is now occurring and companies will be much more reluctant to buy back shares with the sole purpose of enriching stakeholders but providing no economic value.
I am closely following a new story that US Members of Congress were given advanced notice of the economic impact of the coronavirus and dumped their stock holding before American Citizens were notified on equal grounds. So you are aware “insider buying” is not illegal with Members of Congress. I will keep you updated as I find out more – as this story just came out minutes ago.
In follow up to my last opinion letter – I must update members regarding another bailout request from Boeing. Again, all taxpayers should be outraged as the executives of Boeing did massive share buy backs and the compensation packages for Board members and high level executives was in the tens of millions.
After this poor use of money (on share buy backs) – where money was diverted away from expansion, equipment replacement, new products, service development and cash reserves (in the event of something like what is occurring currently) – the executive team is now requesting at least a $60 billion in bailout.
Why should these executives keep large homes, fancy cars, and in some cases private jets and then ask the taxpayer to bail them out? Is it so they can continue to run the company – despite their poor decisions?
Small business owners pour all their personal capital into their companies and if the company is successful they become wealthy and if it is not they become poor. With the current system these executives can poorly manage a company and grow enormously wealthy even if the company they manage does not perform well.
Please send a comment to our State Senators and tell them – ‘No bailout for Boeing’ unless the management team is fired, the management team returns all personal gains from their share buybacks and the tax payer takes ownership of Boeing.
PLEASE POST THIS NOTICE ON YOUR SOCIAL MEDIA IF YOU AGREE.
Boeing’s spent $43.44 billion over 10 years on share buy backs. It has received government assistance in the past during tough times so these billions should have been placed as reserve funds.
WE AS TAXPAYERS MUST BE OUTRAGED!
Boeing is well aware that it needed to keep cash on hand. Last week it called in all its credit lines from banks but most Americans are not aware that the day after Boeing did this – many banks cancelled credit lines or denied access of everyday American businesses to their credit lines. The reason is banks did not want the exposure of more companies doing what Boeing had just done. So this was another situation where Boeing created damage, albeit unintentionally in this case – but profound nonetheless.
Bailout money must go to small businesses where the entrepreneurs bet everything on the company’s success.
Here is the update on airlines share buy backs after my last opinion letter.
Southwest, Alaska, Delta, United, American, JetBlue have bought back 49.175 billion in stock.
They are asking the tax payer to bail them out now for
The airline industry is well aware of the fact that – in Recessions the airline industry must have a “reserve fund”; however, any such reserve fund was blown on share buy backs with the primary goal of compensating executives. If you look up the executive’s names and cross-reference their compensation packages some of them are paid thousands of dollars an hour
every day of the week.
How can it be right that the executives of these large companies hold massive mansions with private jets, summer vacation homes and then receive bailouts with the likeliness that they will do the same thing all over again if given the opportunity.
“Yes”, to small business bailouts but “No” to uncontrollable destructive greed that we as taxpayers must pay for.
Finally on a local level Jim Murren is the CEO of MGM Resorts in Vegas.
He joined the company as its CEO in 2015 and has decided to step down as its CEO during the coronavirus crisis and is receiving a compensation exit package of $32 million.
This is while MGM employees are being laid off in large numbers. Is it just me or is there something wrong with what is happening?
I understand what capitalism is but – what is this?
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