Modern finance: making dividends out of loans

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The NYT reports:

From the fourth quarter of 2004 through the third quarter of 2008, the companies in the S.& P. 500 - generally the largest companies in the country - reported net earnings of $2.4 trillion. They paid $900 billion in dividends, but they also repurchased $1.7 trillion in shares.

We know the profits weren't real. Much of it was simple mark to market revaluation. In which the dividends and share repurchases were paid for out of borrowing.

No wonder leverage has shot through the roof. And now companies will fail as a result.

I know this is the US and they use different rules, but the IASB has a lot to answer for in releasing this madness on the rest of the world.