What happened to share buybacks?

Big US companies must not think much of their own prospects. With many stocks at multi-year lows, firms are not stepping up to buy their own shares. That seems odd because a number of the largest corporations are sitting on billions of dollars in cash. The lack of buybacks may be as bearish a sign as investors can find.

According to the FT, "Regulators have sought to encourage companies to buy shares in the open market by easing restrictions on corporate buy-backs as part of emergency measures introduced last month." But, no dice.

It is understandable the forums with modest cash balances would not be in the buyback market, but that leaves a number of very large, cash-rich corporations from Altria (NYSE:MO) to Google (NASDAQ:GOOG). They almost certainly have excess capital that they will not need, even in a deep recession.

The lack of buybacks leads to only one conclusion. Company managements and boards think their stocks will go much lower. They do not want to look foolish if they put capital into falling shares But, over a long period of time America's large corporations should hold their value. Too bad even insiders do not look at it that way.

Douglas A. McIntyre is an editor at 247wallst.com.