Commentary: Wall Street is ignoring the omens of recession

BOSTON, Massachusetts: The world is on the brink of a recession, if all the breathless headlines are to be believed. So why are US stocks near all-time highs?

One of the greatest economists of all time, John Maynard Keynes, believed there were “animal spirits” – essentially, emotions, instincts and other unquantifiable human behavior – that drove people to waves of optimism or pessimism, as he explained in his 1936 book The General Theory of Employment, Interest and Money.

The impact of a share buyback is no different from what happens when any kind of product becomes hard to find. Sellers see lots of demand while they have relatively little product to supply. To balance this excess demand, they raise prices.Traders work on the floor at the New York Stock Exchange in New York, U.S., September 5, 2019.

The simplest way to see this is to imagine winning a million dollars right now. You’d be a lot less thrilled, however, if you were told you wouldn’t receive a dime for 25 years. And so lotteries typically let winners take a greatly reduced lump sum immediately or receive the total in smaller payouts over many years.

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