[loweglor]

Right on, boomer!! This country needs more people who do what is right for people instead of what is right for profit.

[tvbound]

Originally Posted by Boomer

The 2017 tax law cuts were lauded and applauded by CEOs. corporation boards, and their lobbyists when that change in the law slashed the corporate tax rate.

It did not take long for corporations to decide to increase stock buybacks by using a mind-boggling amount from their new slush funds created by those tax cuts.

I have never liked stock buybacks -- even though I was seeing increases in share prices. I always thought stock buybacks running rampant were causing a bloated market.

I could never understand why those tax cuts did not come with some kind of parameters requiring corporations to use their new-found money for employees and capital improvements -- things to improve the overall economy. Of course, some of that money has been spent that way. BUT I guess nobody told corporate bosses not to use a huge percentage of those piles of money to line pockets by buying back their own stock.

Granted, I am a mere bumpkin, and could be accused of not understanding the wonders of stock buybacks. And, oh my, some might accuse me of being anti-capitalism -- which I absolutely am not. (I have not given up the market.)

I have been questioning stock buybacks for the past few years, but the recent train derailment that has ruined East Palestine, Ohio, sent me on a search to see what Norfolk Southern has been doing with their corporate tax cut money.

What you can read in the following link is an announcement from Norfolk Southern dated almost exactly one year ago. The announcement is for the stock buyback program that began on April 1, 2022 -- on the heels of their previous stock buyback program.

Here's the link to the year-old announcement straight from Norfolk Southern:


Norfolk Southern Announces New $10 Billion Stock Repurchase Program

And here is the first paragraph from the above link:

Norfolk Southern Corporation (NYSE: NSC) today announced that its Board of Directors has authorized a new program for the repurchase of up to $10 billion of its common stock beginning April 1, 2022. The company’s current program will be terminated on March 31, 2022.




10 Billion Dollars!



And, yet, there goes Norfolk Southern, waltzing around trying to buy real people's lives with a few mil thrown in the kitty.

This is about ethics. This is about right and wrong. This is about all of us.

Norfolk Southern must pay up, but never, ever be allowed to make the call as to when and whether East Palestine is safe -- unless that smarmy CEO moves there, with his family, to stay.

Furious Buckeye and Furious American Boomer

You have hit on two very serious/appropriate subjects, regarding this (and future) derailments AND tax cuts for the rich.

The tax law passed that primarily/overwhelmingly helped those who needed it the least, still sticks in my craw. All the bloviating about how companies would use the windfall to reinvest in their infrastructure and not just in stock buybacks to increase stock prices, has been shown to be absolutely false, just like in all the previous tax laws passed helping the richest people and large corporations.

When executive remuneration is tied to only a 1 fiscal year stock price gain, then short-term/myopic decisions will always be made to maximize the year-end bonus of those at the highest levels. I have said for a long time, that executive bonuses tied to stock prices/profits should be on a 3 year sliding scale, that forces upper management to look past just what will make them the most in a single year. And should key executives change in that 3 year period, it would still be easy enough to prorate the bonuses so that those no longer there will still benefit from their longer view/gains of the company.

As for the derailment, the tax cuts could/should have been used to shorten the distance between defect detectors, which have proved to be much more efficient than just adding crew members (many who just slept in the locomotives or on the bunks in the cabooses) to trains, that may or may not have been able to see the bearing getting hot in the first place.

The real issue however, is the fact that the threshold for determining when to stop/inspect a train because of increased temperature for bearings/wheels, is left solely to each railroad - NOT by federal law. Since stopping a train or setting out a bad car can jam up the entire system and cause a major impact to train performance (getting from point A to point B), railroads have decided to roll the dice and set the temperature threshold so high, that these occurrences are rare and only apply to the worst case scenarios. We can see how that has worked out, for the poor residents of Palestine.

My good friend (almost 50 years in the railroad industry, many at the executive/upper management level) predicts that the NTSB will recommend a law that requires all railroads to follow regarding a maximum distance between detectors, as well as a lower delta between ambient and component temperatures on rail cars.

He also mentioned that there has been bad blood between the NTSB and the Federal Railroad Administration (FRA) for many years (re: Positive Train Control), because the NTSB has no regulatory powers and only the FRA can promulgate/enforce federal regulations.

The bottom line is that when the head of the NTSB says "the incident was 100% preventable," yet the crew/protocols were also followed, it becomes pretty obvious that something has to change so that more communities are not so adversely affected in the future - and companies can't just protect/enrich the highest paid already with tax cuts.

[amexsbow]

Originally Posted by OrangeBlossomBaby

It isn't just that. A previous administration's rollback on EPA guidelines for hazardous material contributed to the disaster. However - another rollback, which was on the faster brakes for trains with flammable/hazardous cargo would not have applied to this particular train, as it was a mixed-use train and the disaster would've happened anyway since it was a busted wheel bearing that caused it.

Actually, that rule did not cover the chemical tankers. And I believe that Warren Buffett's majority stock holdings control Norfolk Southern and the parties in charge. And he is against pipelines to transport the chemical feedstock in the railcars.

[tvbound]

Originally Posted by amexsbow

Actually, that rule did not cover the chemical tankers. And I believe that Warren Buffett's majority stock holdings control Norfolk Southern and the parties in charge. And he is against pipelines to transport the chemical feedstock in the railcars.

"And I believe that Warren Buffett's majority stock holdings control Norfolk Southern and the parties in charge."

Buffett doesn't own any Norfolk Southern stock, as he sold it when he purchased the Burlington Northern Santa Fe (BNSF) in 2010 and took it private.

[manaboutown]

I wonder about the qualifications and capabilities, or lack thereof, of the crew as they ignored at least three warnings before braking the train. Were they hired based on merit and ability or for other reasons?

This is revealing. Inclusion and Diversity | Norfolk Southern

[Bill14564]

Originally Posted by manaboutown

I wonder about the qualifications and capabilities, or lack thereof, of the crew as they ignored at least three warnings before braking the train. Were they hired based on merit and ability or for other reasons?

This is revealing. Inclusion and Diversity | Norfolk Southern

Any source for that? Of course not. More like they properly handled the signals they received including immediate braking when the signal indicated braking was required.

Even more than the false claims, the racism in this post is appalling.

[manaboutown]

Originally Posted by Bill14564

Any source for that? Of course not. More like they properly handled the signals they received including immediate braking when the signal indicated braking was required.

See post #9.

[Bill14564]

Originally Posted by manaboutown

See post #9.

I saw post #9 and read both the article and the report. I stand by my post - the engineer and crew appear to have properly followed the guidelines for the readings they received.

[manaboutown]

Since I have not looked into NSC's share repurchases I have no opinion as to whether or not they were wise.

Warren Buffet's thoughts on share repurchases from page 6 of BRK's 2022 annual report that came out today.

"A very minor gain in per-share intrinsic value took place in 2022 through Berkshire share repurchases as well as similar moves at Apple and American Express, both significant investees of ours. At Berkshire, we directly increased your interest in our unique collection of businesses by repurchasing 1.2% of the company’s outstanding shares. At Apple and Amex, repurchases increased Berkshire’s ownership a bit without any cost to us.
The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose. At such times, gains flow only to the selling shareholders and to the friendly, but expensive, investment banker who recommended the foolish purchases.
Gains from value-accretive repurchases, it should be emphasized, benefit all owners – in every respect. Imagine, if you will, three fully-informed shareholders of a local auto dealership, one of whom manages the business. Imagine, further, that one of the passive owners wishes to sell his interest back to the company at a price attractive to the two continuing shareholders. When completed, has this transaction harmed anyone? Is the manager somehow favored over the continuing passive owners? Has the public been hurt?
When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive)."

Access Denied

[tvbound]

Originally Posted by Bill14564

Any source for that? Of course not. More like they properly handled the signals they received including immediate braking when the signal indicated braking was required.

Even more than the false claims, the racism in this post is appalling.

"Even more than the false claims, the racism in this post is appalling."


You are absolutely dead-on...regarding BOTH points.

Even the NTSB has stated that the train crew reacted exactly as they were supposed to under NS rules and were not to blame - in any way.

Crew tried to prevent East Palestine, Ohio train derailment: NTSB

"The sensor “transmitted a critical audible alarm message instructing the crew to slow and stop the train to inspect a hot axle,” which the crew immediately listened to, according to the report by the National Transportation Safety Board (NTSB).

As the crew worked to slow the vehicle, “the train engineer increased the dynamic brake application to further slow and stop the train,” NTSB investigators said."

You are also correct that the additional comment exposes the ugly underbelly, of the constantly denied racism in this country...by a certain demographic.

Simply disgusting.

[manaboutown]

Hiring and promoting preference based on race, gender or other special status, especially without regard to merit and capability is racist. Hiring and promoting based on merit and capability without preference to race, gender or special status is not racist.

[Caymus]

Originally Posted by Boomer

The 2017 tax law cuts were lauded and applauded by CEOs. corporation boards, and their lobbyists when that change in the law slashed the corporate tax rate.

It did not take long for corporations to decide to increase stock buybacks by using a mind-boggling amount from their new slush funds created by those tax cuts.

I have never liked stock buybacks -- even though I was seeing increases in share prices. I always thought stock buybacks running rampant were causing a bloated market.

I could never understand why those tax cuts did not come with some kind of parameters requiring corporations to use their new-found money for employees and capital improvements -- things to improve the overall economy. Of course, some of that money has been spent that way. BUT I guess nobody told corporate bosses not to use a huge percentage of those piles of money to line pockets by buying back their own stock.

Granted, I am a mere bumpkin, and could be accused of not understanding the wonders of stock buybacks. And, oh my, some might accuse me of being anti-capitalism -- which I absolutely am not. (I have not given up the market.)

I have been questioning stock buybacks for the past few years, but the recent train derailment that has ruined East Palestine, Ohio, sent me on a search to see what Norfolk Southern has been doing with their corporate tax cut money.

What you can read in the following link is an announcement from Norfolk Southern dated almost exactly one year ago. The announcement is for the stock buyback program that began on April 1, 2022 -- on the heels of their previous stock buyback program.

Here's the link to the year-old announcement straight from Norfolk Southern:


Norfolk Southern Announces New $10 Billion Stock Repurchase Program

And here is the first paragraph from the above link:

Norfolk Southern Corporation (NYSE: NSC) today announced that its Board of Directors has authorized a new program for the repurchase of up to $10 billion of its common stock beginning April 1, 2022. The company’s current program will be terminated on March 31, 2022.




10 Billion Dollars!



And, yet, there goes Norfolk Southern, waltzing around trying to buy real people's lives with a few mil thrown in the kitty.

This is about ethics. This is about right and wrong. This is about all of us.

Norfolk Southern must pay up, but never, ever be allowed to make the call as to when and whether East Palestine is safe -- unless that smarmy CEO moves there, with his family, to stay.

Furious Buckeye and Furious American Boomer

From article

"Billionaire Warren Buffett says critics of stock buybacks are “either an economic illiterate or a silver-tongued demagogue” or both, and all investors benefit from them as long as they are made at the right prices."

Warren Buffett calls stock buyback critics ‘silver-tongued demagogues’

[tvbound]

Originally Posted by Caymus

From article

"Billionaire Warren Buffett says critics of stock buybacks are “either an economic illiterate or a silver-tongued demagogue” or both, and all investors benefit from them as long as they are made at the right prices."

Warren Buffett calls stock buyback critics ‘silver-tongued demagogues’

Buffett is referencing only investors and commenting on stock buybacks in general, not the special windfall of the 2017 tax cuts that primarily benefited the wealthy and corporations.

The tax cuts were touted as helping Americans and the American economy overall, but if a company uses their windfall for stock buybacks, instead of for wage increases/personnel hiring/additional infrastructure/Etc., then that 47% of Americans who don’t own stocks in ANY form (pensions/mutual funds/individual/Etc.)…are/were not helped. In other words, that “trickle down effect” they were supposed to feel, is actually from those of us fortunate enough to own stocks - just peeing on their leg.


Access Denied

”In 2019, more than half of American families, 53%, were invested in the stock market.”

Just like the OP said, sure, those 53% of us with stocks saw our portfolio rise, but it was still the wealthiest people and corporations that benefited the most (and needed it the least), when the tax cuts were used to buy back stocks.

Given the demographics of TV, of course there are those that see no problem with what happened, particularly since (as pointed out in the link)..."Although more Americans own stock, that ownership is concentrated among the wealthy and white."

[CoachKandSportsguy]

Originally Posted by Caymus

From article

"Billionaire Warren Buffett says critics of stock buybacks are “either an economic illiterate or a silver-tongued demagogue” or both, and all investors benefit from them as long as they are made at the right prices."

Warren Buffett calls stock buyback critics ‘silver-tongued demagogues’

cherry picking general knowledge financial article support, eh? Have you ever personally benefited from corporate buybacks? Have you ever participated in executing buyback plans? Have you ever seen what happens with the stock after corporate buy backs?

and, yes, I have when working at high levels in corporate america. . . both pricing out buying back stock levels for purchases, and receiving the stock and watching sr executives get those shares for personal gain. . and accounting friends of mine at places like GE relate abuse stories to me as well. . . personally getting dividends from contractual, but UNGRANTED shares. . . as well as seeing executives go to the pokey for illegal financial activities. . it will never stop with corporatism. . .

Here is a link to read about them from a former wall street money manager,

Stock Buybacks!™ and the Monetization of Stock-Based Compensation - Epsilon Theory

About common logic. . .
Sheep Logic - Epsilon Theory

after years of working on wall street, his view and mine, BITFD IFYKYK

so if your your finance experience comes from, watching CNBC, or listening to wealth management sales pitches, you are probably are just repeating common knowledge, which everyone believes and knows. . which in the financial world is sheep logic . .

[Boomer]

Good morning,


I have just read through all the responses here.


It looks to me like tvbound obviously has an inside track (chuckle) to the railroad industry. Thank you, tvbound, for sharing with us the details from your close friend who has had 50 years in the biz.

Anyway, I want to get back to connecting the dots......

Please take a look at the definition of connect-the-dots:

Dictionary
Definitions from Oxford Languages ·

connect-the-dots:

relating to or denoting a child's puzzle consisting of sequentially numbered dots which form a picture when connected with straight lines in the designated order.
"a connect-the-dots picture"

The picture I get when I connect the dots is a simple one......If Norfolk Southern can buy back 10 Billion Dollars worth of their own stock, they can darned well afford to take care of the people of East Palestine and make them whole again. That needs to happen and it should not be on the taxpayers' dime.

Whoops, the clock is telling me that I don't have time to finish this post now. I will be back later to have a conversation about buybacks, Buffett, and perhaps a certain post here that definitely jumped the track.

Bye for now.

Boomer