What do you mean "in the wrong way"? It's possible that there are cases where it may not the best thing for the shareholders. This would require the company have better sues for the money than the investing public at large. But this is a business decision the people running a company are paid to make.
The particularly absurd thing about this post was the idea that companies as a group are doing this for some reason. Obviously, if one company is making a bad decision by foregoing profitable investments this presents even more opportunities for other companies to make even more profit. Since there are large pools of capital both public and private available at historically cheap rates it's spectacularly implausible that our "economic problems" are being caused by people willfully not doing all these wonderfully profitable projects that are out there. The depth of disconnect one must have with the current reality of the capital markets to believe this is truly extraordinary.
I agree with you. Companies are resorting to stock buy backs simply because there is no better use for huge amount of capital that the companies have accumulated. Demand is so low that they see no gain in building new production facilities. They wouldn't be able to sell the additional product.
But it would be very useful for us to look at the reasons for, one, the large accumulation of capital and, two, the shortage of demand.
Is it possible that the two are related and if they were might that point a way out of our current problems, problems that the whole world seems to be sharing with us to one degree or another?
