Capitalism eats itself: the buyback bonanza

American firms are still buying their own shares at a ferocious pace. Even airlines, notorious for their flaky finances, have joined in the frenzy. On May 13th Delta said it would repurchase shares worth $5 billion. Buybacks by S&P 500 companies were worth $144 billion in the first quarter of 2015, a 9% drop compared with a year earlier but still near a record high. Energy firms grappling with slumping oil prices have cut back, as has Apple; but other corporate cannibals, notably banks and health-care companies, seem to have an even greater appetite for their own shares. In theory buybacks return cash to shareholders, and are a bit like dividends. But some analysts worry that bosses are buying their own stock to pump up share prices at the expense of long-term investment. Happily, in the first quarter capital investment by S&P 500 firms rose by 4% year-on-year, to $169 billion.