As I read this article two things came to mind:
1. Does the exit of large tech companies from the short term corporate bond market add yet another factor driving yield curve inversion?
2. Did our policy makers consider what may follow when implementing the tax cuts earlier this year?
I know, I know, $306 billion brought back from overseas was supposed to produce jobs here in the U.S. but what really happened? The companies paid special dividends and repurchased stock (http://time.com/money/5267940/companies-spending-trump-tax-cuts-stock-buybacks/). They did not build factories.
This is an example of trickle-up economics. For who is harmed by tax cuts? Those who rely on public services that must be cut in order to pay for the tax cuts. Maybe the wealthy people who benefit from the special dividends, stock repurchases, and tax cuts will use the extra cash to buy Ford and Chevy cars Or maybe they will buy Mercedes and Ferrari.
Tax cut -> repatriate dollars -> stock buybacks and special dividends -> lack of funding for smaller corporations -> yield curve inversion-> recession.
Time will tell his this all plays out. I don’t know the future, but I am a bit concerned.
Apple, Oracle Dump Bonds and Create $300 Billion Hole in Market