When it comes to the short-termist financial gimmickry that is stock buybacks, the warning first issued here back in 2012 has now been repeated by virtually everyone from Blackrock's Larry Fink to Goldman Sachs (a firm which makes millions in commissions executing said buybacks).

Just overnight, Bloomberg had an article titled "Companies' Borrowing Spree Darkens Stock Market Future" in which it repeated the now well-known warnings:

A dark shadow is lurking behind the happy façade of rising stock prices.

U.S. companies are borrowing money faster than they’re earning it -- and they’re doing it at the quickest pace since the aftermath of the financial crisis.

Instead of deploying the debt to build factories, hire new workers or expand product lines, companies are funneling more of their money to shareholders or using it to fund deals. Stock buybacks reached an all-time high last year and the volume of global mergers and acquisitions announced so far this year would make it the second-busiest ever, according to data compiled by Bloomberg.

We showed this over 1 year ago as follows, when we crushed the pervasive conventional fallacy that corporate cash is record high - it may be, but so is net debt!

And as Bloomberg noted: "the debt undermines future growth and could dent company income when borrowing costs rise. Higher interest rates will make already indebted companies less desirable to lend to. The consequence: profitability, buoyed by cheap money since rates went to near-zero in 2008, will sink."

“Companies have said, ‘We don’t have an ability to grow organically, so we can distract shareholders instead,’” according to Jody Lurie, a credit analyst at Janney Montgomery Scott LLC, which manages $63 billion. “When they buy back shares, all it does is optically make earnings per share look better.”

And who can blame them? With the central planners' repressive regime in which it encourages the relentless issuance of debt (and which yield-starved bond investors eagerly gobble up with other people's money to justify their 2 and 20 fees), there is no other choice than to lever up massively and reward shareholders while handing all the long-term risk to bondholders.

Wendy's (WEN) was the most recent to oblige, when the company with a $4 billion market cap and 3x net debt leverage announced it has authorized a new $1.4 billion buyback program, the biggest in its history, of which it would commence with an $850 million share repurchase as soon as today sending the stock 5% higher.

"Our recent operating results, along with the shareholder-value enhancing initiatives and updated outlook announced today demonstrate continued progress with our brand transformation," President and Chief Executive Officer Emil Brolick said. "The growth reflected in our long-term outlook, especially our expectations for steadily increasing Adjusted EBITDA margins, demonstrates the higher quality of earnings we are generating as a result of our system optimization initiative, which remains on track for completion in 2016. The enhanced earnings stream includes increased royalties and rental income from the 674 properties we own.... Our recent dividend increases and share repurchases, together with our new $1.4 billion share repurchase authorization, are important elements of our financial management strategy,"

Actually, launching a stock buyback program of this magnitude reveals just one thing: the company has no more organic growth opportunities and as a result it will rush to reward its activist shareholders, most notably Nelson Peltz who, as was to be expected, was quite excited: "We are very pleased with Wendy's on-going transformation and outlook," Peltz said. "Immediately following the sales, Trian will still be the Company's largest stockholder, based on current ownership information, and we look forward to continuing to work closely with other members of the board, along with Emil Brolick and his leadership team."

Of course Peltz is pleased: finally there is someone who can buy his mountain of WEN stock, which if he tried to sell in the illiquid open market would likely lead to another Hanergy-type outcome.

As for the Wendy's buyback program, here it is in context:

$1.4 billion in share repurchases is:

• approximately the same as Wendy's total debt load
• just slightly under the total revenue it is espected to earn in 2015
• 3.5x greater than Wendy's LTM EBTIDA
• and, most importantly, just about half of Wendy's entire stock float!

In other words, Wendy's is about to LBO itself... by half.

And at a pace of 2% of the entire S&P market float being bought back every year thanks to central bank policies, at this pace the entire stock market will have taken itself private some time in 2065.