Companies hold record $837B in cash, yet won't hire workers

Well this might explain a few things. Pretty much the feeling a lot of us have been getting. Of course, no one says they have to hire workers, but...

Bigger than ever. The $837 billion in cash and short-term investments non-financial S&P 500 companies hold as of the first quarter, the latest data available, is not only a record, but up 26% from $665 billion a year ago, says Howard Silverblatt of S&P.

Source

Interesting chart with the story that shows which companies and how much they're holding. No real shockers. Wonder what they're saving up for? New HQ in Dubai? New schools in India, IBM?

[edit on 7/28/2010 by ~Lucidity]

Well, let's not forget - according to our liberal brethren, corporations are evil...I don't know why they're still allowed to exist...we should just take all of their money and redistribute it to every Obama voter, er, I mean, man, woman, and child in the USA...I think that comes out to about $3,000 per person...I'll take mine in cash please.

It's just contributing to our economic woes. People aren't spending, corporations aren't spending. The tax base is eroding, and only the government is spending, and having to borrow to do it too.

My contention is that the entire recession/depression is a self-fulfilling prophecy. They've scared people into not investing and not spending.

I fail to see what liberalism has to do with this. Unless of course you're saying that 10 years of fiscal liberalism has brought us to this?

[edit on 7/28/2010 by ~Lucidity]

I have another figure. Try $1.8 trillion

crooksandliars.com...

www.washingtonpost.com...

The Federal Reserve recently reported that America's 500 largest nonfinancial companies have accumulated an astonishing $1.8 trillion of cash on their balance sheets. By any calculation (for example, as a percentage of assets), this is higher than it has been in almost half a century. Yet most corporations are not spending this money on new plants, equipment or workers. Were they to loosen their purse strings, hundreds of billions of dollars would start pouring through the economy. These investments would probably have greater effect and staying power than a government stimulus.

reply to post by 12GaugePermissionSlip

I guess USAToday went conservative on us. Thanks for that link.

It will be a glorious day when people start caring about other people.

Today is have & have nots.

Corporations are comprised of people.

In the NWO corporate citizens are the 1st world. The old 'empire' are the 2nd world nations and the old third world nations drop to 4th.

And it's getting harder to start our own companies too...with different values, as lending is in the same boat. The banks are holding this money too, I guess. Even when it was part of specific agreements that bail out money be designated for business loans and bailing out homeowners, they've managed to put so many rules in place it's become virtually impossible to get out of the hole.

reply to post by ~Lucidity


Hmmm... good find in the OP and nice follow up 12guage with the finds from the Post.

Lucidity - you raise a good point in the closing remarks in your OP. Even say IBM does use some of their cash in hiring, training, and providing office space for a new wave of programmers in India, or China, or Brazil - or oh wait...

India becoming too expensive for tech firms

Brazil is already heading that way as well - and China will no doubt be not far behind.

Where too next? Goodness - what 3rd world region has cheap labor and resources that have not been exploited to their fullest potential in the modern economy?!

Africa becomes a service outsourcing location

The thing is - they will likely spend that cash abroad rather than here. They'll get much more bang for the buck there and the company's balance sheet and executives will look really good- but it might not help you and I.

reply to post by Frogs

Yes, we predicted that India would soon get too expensive. The cost analyses and business cases I personally did showed that the executives and bean counters really didn't factor in all costs when making their bonehead decisions either. Trust me that at that time, early 90s, all they looked at was hourly rate. Tax was not an issue.

But that didn't matter to them. They're realizing they're not saving all that much while at the same times these countries are wising up, organizing, as in China, and raising their rates, as in Brazil and India.

Funny story about Brazil and a 24/7 server farm they shut off on us at 5 p.m. on the first day because they cut power to the building there everyday to save energy...

Anyway, these companies will just move on. Some companies, like Apple, for one, are returning home and offering the same jobs they outsourced/offshored back to Americans for half the sarlary of what the job was before it was sent away.



[edit on 7/28/2010 by ~Lucidity]

Originally posted by ~Lucidity

Anyway, these companies will just move on. Some companies, like Apple, for one, are returning home and offering the same jobs they outsourced/offshored back to Americans for half the sarlary of what the job was before it was sent away.



[edit on 7/28/2010 by ~Lucidity]

Bingo my friend - I think you just hit on it on part of the goal of this...sigh.. words escape me at this late hour. If I say the "goal of this whole thing" - will you understand my meaning?

The storm is too perfect to be all mere chance as pointed out in several threads here.

I am convinced one of the goals of this is that there is a wage in the mind of those in power. A wage that will generate maximum profit and keep the populace too poor to pose a threat. A wage that even those in the US will be happy to accept.

Once people are willing to accept that low wage they'll spend some of that money.

It is all about power, wealth, control and how to keep them.

Well ALL the money in the world certainly does appear to be shifting to a very few pockets. That's for damn sure. And they're using every trick in the world to make this happen. That or it's late and I'm seeing things again...quite possible.

Originally posted by ~Lucidity
Well ALL the money in the world certainly does appear to be shifting to a very few pockets. That's for damn sure. And they're using every trick in the world to make this happen. That or it's late and I'm seeing things again...quite possible.

1st, approximate lucidity exactly describes your vision and opinion; a distirted view of reality tainted by personal animus and political bias.

2nd, what would YOU do as a small or large businessman faced with no market, increased costs for every single new hire, and impending punitive increases in taxes on future investment, innovation, growth, or profit?

If your business was your sole source of future security would you be willing to bet your capital on support from Obama's administration? No! He's turned his back on business.

The nearly $2.0 TRILLION in earned income is being held back for only ONE reason: To avoid confiscation!

When we move from confiscatory economic policies, we will see investment, hiring and growth. Not before.

Why should anyone bust their ass to earn $500,000 if Barack Obama wants half of it to give away?

reply to post by ~Lucidity


People are brainwashed to say "Liberal this, Liberal that, Liberal Liberal Liberal"

That is the conservatives entire argument. Liberal liberal liberal.
They are still unable to accept that there is 1% of 1% that control the entire machine.

Has nothing to do with Zionism, Neoconism, Liberalism, Conservativism. These are mere symptoms.

Just another example of how corporate and big business tax cuts and breaks wont do a DARN thing to stimulate the economy.

Edit: typo

[edit on 3-8-2010 by SunIsSon]

Originally posted by SunIsSon
Just another example of how corporate and big business tax cuts and breaks wont do a DARN thing to stimulate the economy.

Please explain how "corporate" taxes DO NOT translate into higher prices for consumers. Which corporations are going to absorb increased expenses instead of passing them on as costs of doing business?

Please explain how increased taxes on "business" will encourage them to re-invest in new employees (with new Obamacare expenses) or new investments (with increased capital-gains taxes) and why that is good for their "owners" (investors, retirement plans, pension funds, individuals)?

Please explain how increased burdens on job growth and job creation will help everyone else.

deny ignorance

jw

I sure I don't know a thing but doesn't this fact end the whole myth of Reaganomics and the trickle down theory. If corps, who are now people, have a ton of money via whatever mechanism you want, and they keep it, doesn't it finally end this nonsense? Isn't the flaw in his whole notion that there are TWO things people can do with money, not just one: spend and keep. If they keep, isn't the THEORY, blown?

reply to post by zroth


I noticed one thing about humanity and that is when somebody dies or a country is attack such as 9/11 is when people only care about each other. It is a strange thing I have observed.

reply to post by ~Lucidity


I also heard that the correct figure was closer to 1.8 trillion. This is a perfect example of why extending the Bush tax cuts to the nation's wealthiest people will not produce any of the jobs or tax revenue that the republicans claim it will.

They claim that if we give them the cash they will create the jobs, yeah right! Where have I heard this theory before? Let's see, I think Reagan sold us that line of crap under the title of "Trickle Down Economics" only to later be correctly described as "Voodoo Economics" by Bush Sr.. If they were going to create jobs, they would be doing it now. The only jobs they want to create are overseas jobs.

They are holding on to their money until Obama, and the Democrats lose power. That way they can invest it in their companies without the fear of the next massive tax increase that slows growth.

Originally posted by Flatfish

This is a perfect example of why extending the Bush tax cuts to the nation's wealthiest people will not produce any of the jobs or tax revenue that the republicans claim it will.

I would say you hit the nail on the head, but you are using the wrong end of the hammer.

The end of the Bush tax cuts are just one reason why companies are holding on to their money. That and the uncertainty of the next tax increase that is sure to come if Democrats hold power.

Once they realize that the Democrats and Obama are sure to lose power, that will be the signal to start hiring and expanding. Until then they are just keeping their money safe.