Corporate Cash: Scared Money Don't Make No Money

Here’s an update on that corporate cash hoard currently being, well, hoarded at nonfinancial companies across America…

From Real Time Economics:

$1.9 trillion: Corporate America’s cash

U.S. companies’ cash hoard keeps getting bigger, a trend both good and troubling.

After hitting new highs in five of the last six quarters, nonfinancial corporations’ cash and other liquid assets reached $1.9 trillion at the end of 2010, according to the Federal Reserve. That’s 7% of all their assets, the highest level since 1963.

In the Hip Hop world, we like to say “Scared Money don’t make no money”.  And by “we”, I mean they like to say that and I like to nod my head – 34 years old, two kids and still blasting rap music like a giant retarded 10-year-old.  But I digress…

Anyway, that doesn’t change the fact that this money is scared money.  In fact, RTE mentions that the only real sense in which it is being deployed is in share repurchases.  Last quarter, companies bought back $86 billion of their own stock, a three-year high.

While this does boost earnings, it does little for anything else.  No hiring or innovation results from it – just the “congrats on a great quarter” kudos from sell side analysts on the next conference call.

More investment is needed in startup ventures, new products, new companies, new lines of business.  That is where the jobs ultimately come from.  The research says NEW business is the biggest driver of jobs, not SMALL business as many mistakenly believe.  With almost $2 trillion in “scared money” cash being hoarded, we may be waiting awhile on that.

Source:

Number of the Week: Companies’ Cash Hoard Grows (Real Time Economics)

What's been said:

Discussions found on the web
  1. Be Rich Now! commented on Sep 22

    … [Trackback]

    […] Find More here to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  2. immediate edge reviews commented on Sep 23

    … [Trackback]

    […] There you will find 33646 more Info to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  3. bitcoin loophole reviews 2020 commented on Sep 25

    … [Trackback]

    […] Here you will find 484 additional Info to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  4. fake tank louis cartier watch commented on Nov 16

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  5. click to read commented on Nov 27

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  6. replica watch commented on Dec 21

    … [Trackback]

    […] Read More Info here to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  7. 메이저놀이터 commented on Dec 25

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  8. 안전공원 commented on Dec 25

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  9. replica watches commented on Dec 30

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]

  10. replica watches commented on Jan 06

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2011/03/13/corporate-cash-scared-money-dont-make-no-money/ […]