Arbitrage

One reason the stock market is doing so well is due to stock buybacks. Despite high share prices, for dividend-paying firms with top-notch credit ratings, interest rates have never been lower. These firms are borrowing long-term at 2% to buy back stock with, perhaps, a 4% dividend. And since interest is tax deductible, the borrowing costs are even lower. Amazingly and regrettably, these firms see nothing better to invest in!