A Talking Point Bites the Dust

Big corporations are hoarding cash. Corporate cash on hand is higher than ever! This just proves that we need to tax … oh.

in its quarterly “flow of funds” report on Thursday, the Federal Reserve sharply revised its estimates of how much cash companies are holding on their balance sheets. The bottom line: Corporations have nearly $500 billion less cash on hand than previously believed.

Perhaps more significant than the number itself, however, is how the revision affects the trend. Before the revision, the Fed showed corporations continuing to accumulate cash, with liquid assets rising nearly every quarter since the recession ended and reaching a record $2.2 trillion at the end of last year. Now, however, it appears corporate cash piles grew rapidly through 2009, then leveled off. Companies aren’t spending their cash, but they aren’t holding more of it, either.

Moreover, companies are holding a smaller share of their total assets in cash. At the end of 2009, liquid assets made up 6.3% of their corporate assets, the most since the 1960s. Under the unrevised data, that share continued to grow, topping 7% last year. But the revised data show cash has actually fallen as a share of assets, to 5.7% at the end of March, its lowest level in the recovery.

Basically, the Fed revised their methods, got better data from the IRS and wound up with figure much closer to what private firms were asserting. This resolves away one of the puzzles of our economy: the supposed unwillingness of business to invest their vast piles of cash into the economy. Now we know that those vast piles of cash are much less vast than thought.

There is still a basic unwillingness to invest. If we really were in a recovery, we would expect corporate cash to fall as companies expanded, then rise as they reaped the profits. That hasn’t happened yet.

Comments are closed.

  1. Mississippi Yankee

    So in conclusion:

    Is Atlas Shrugging?

    Is John Galt Galting?

    Or are the dire straits we now occupy much, much worse than I suspect?

    Thumb up 7

  2. Miguelito

    This actually sorta backs up something I heard the other day… if you just took Apple’s numbers out, then this overall number (and the market) look a lot worse.

    I know where I work has been sitting on a lot of cash too, even though we’ve done a few acquisitions in the last couple of years (and boy they’re a pain in the ass to help support… people do NOT want to change their ways to move into the fold).

    Thumb up 5

  3. Seattle Outcast

    I always considered the “hoarding cash” and “record profits” to be a combination of “meaningless distraction” and “outright lies” – of course, the big clue was who was making the claims: screaming, far-left, anti-business loons.

    As far as “the private sector is doing fine” remark, I think it is quite clear that Obama believes this. It is just another indicator of how he not only despises business (except when it gives him money), but his fundamental lack of understanding of economics. I’m surprised he hasn’t asked CM to be his “Economy Czar” as they both drink the same kool aid on this one.

    Thumb up 6

  4. Hal_10000 *

    I’m cooking up a post on the ” private sector is doing fine” gaffe. Amazingly, it wasn’t the dumbest thing he said in that speech.

    Thumb up 4

  5. CM

    his fundamental lack of understanding of economics. I’m surprised he hasn’t asked CM to be his “Economy Czar” as they both drink the same kool aid on this one.

    Aside from being a troll, you’re continuing to ignore the fact that I don’t have a firm belief in any flavour of economic theory. I’m mostly questioning you about the specifics of what YOU believe. You continue to fail to respond (yeah yeah I know, it’s because you ‘can’t be bothered’).

    Hot! Thumb up 2

  6. Mississippi Yankee

    Who should I be listening to / reading on economics? Glenn Beck?

    Start with Seattle Outcast, several folks @ NRO then slowly build up to Milton Friedman.

    Thumb up 7

  7. Dave D

    bgeek: YES!!!!!

    CM: Yeah, right! (rolls eyes) You don’t have any firm beliefs in any economic theory. Do you READ what you post/link to, or are those just stolen talking points?

    And give up the troll shit with SO. “Am not, you are” doesn’t work.

    Thumb up 6

  8. InsipiD

    Who should I be listening to / reading on economics? Glenn Beck?

    Beck is the Mr. Rogers of conservative media. Starting at the bottom is a good place to start.

    Thumb up 4

  9. Seattle Outcast

    you’re continuing to ignore the fact that I don’t have a firm belief in any flavour of economic theory.

    Three things:

    1) Nobody in the US spells “flavor” that way

    2) It’s pretty well established that YOU are the troll

    3) Utter bullshit. You consistently come out in favor of Keynesian economic theory, and actually seem ignorant of competing ideas

    Thumb up 6

  10. CM

    Hidden due to low comment rating. Click here to see.

    Thumb up 0

  11. Seattle Outcast

    Aspects of it certainly seem to make more sense to me yeah, and nobody seems to be able to put up an alternative or explain their ‘competing idea’. At all. Certainly not you. Certainly not beyond vague general theory, which doesn’t answer the issue at all.

    I suppose that would be funny if you weren’t actually being serious.

    People keep telling you the basics of real economics all the time, but you’ve go cotton in your ears or shit between them. Take your pick.

    Thumb up 5

  12. Dave D

    I honestly think CM comes here to laud over us troglodytic conservatives, expecting we will marvel in his intellect and see his “light”. He is not preachy, he just COMPLETELY andimmediately dismisses any conservative view simply because it is from one of those “inferior” conservatives. The 131+ page AGW linfest/thread on the old forum was the EPITOME of his behavior and he continues here.

    Thumb up 8

  13. CM

    I suppose that would be funny if you weren’t actually being serious.

    People keep telling you the basics of real economics all the time, but you’ve go cotton in your ears or shit between them. Take your pick.

    Yet MORE avoidance.

    I honestly think CM comes here to laud over us troglodytic conservatives, expecting we will marvel in his intellect and see his “light”.

    Wow, virtually every post of yours here is just slagging someone off. Is that ALL you’re about mate? Can’t get enough of that old leg-humping action?!

    My ‘light’? Where is that then? I’m asking YOU to explain how YOUR system would fix/revive the economy – how on earth does that have anything to do about ME claiming to know? I’m not telling you anything, I’m setting out what someone else says and asking HOW it’s wrong and what the alternative is? I’m asking you to take 5 seconds off from slagging everything and explain your alternative. You refuse to do so.

    He is not preachy, he just COMPLETELY andimmediately dismisses any conservative view simply because it is from one of those “inferior” conservatives.

    WTF, I’m not the one spending 99% of my time here dismissing everything, including people I don’t agree with. Seattle Outcast says start by completely and immediatyely dimissing Keynes. Did you miss that? Or is it ok when it’s that way around?
    How can I dismiss a conservative view when I can’t get anyone to explain it to me?

    The 131+ page AGW linfest/thread on the old forum was the EPITOME of his behavior and he continues here.

    131+ pages? I don’t remember a thread on AGW of that length. I think there was one that was 80 pages. Anyway, my ‘behavior’ in that thread was fine. In all those AGW thread it was always anti-science types bringing the latest ‘final nail in the coffin’ to the table. Very rarely did I start something up, I simply responded to what was posted. And I always tried hard to stick to the science of what was introduced, and stay clear of what the ‘conservative view’ (there shouldn’t even be a ‘conservative view’ on climate science anyway – people should make up their own minds on the actual science, not on how the science fits their political views).
    I don’t think you actually read any of it, otherwise you wouldn’t be trying to claim this. It’s fascinating though.

    Thumb up 1

  14. Mississippi Yankee

    I’m in the process of proving that CM has found a way to get paid for every down vote.
    There really is no other explanation.

    Thumb up 4

  15. Seattle Outcast

    YOU to explain how YOUR system would fix/revive the economy

    You were given a reading list – get started and come back with questions later.

    Your first goal is to understand that governments can’t do the following thru taxes, regulation and spending:

    1) Stimulate/jump-start the economy

    2) Create jobs

    Thumb up 4

  16. CM

    You were given a reading list – get started and come back with questions later.

    I was given some names. But that’s pretty much all vague theory (get govt out the way). I want to know what you advocate now, and how it will assist getting the economy up and running again. I’ve been through, in detail, why I don’t see how it will do anything but the opposite. Where am I wrong? What mechanism am I missing which puts a whole lot of spending power back in the hands of the majority of the population. If that’s not the way the economy is going to get better, why not and what is?

    Your first goal is to understand that governments can’t do the following thru taxes, regulation and spending:

    1) Stimulate/jump-start the economy

    2) Create jobs

    I know that’s certainly your opinion on those matters (there is plenty of evidence to the contrary). However, yet again, you’re avoiding the questions about how YOUR philosophy will improve the economy in a sustainable manner. Forgot what you consider has failed. Can you answer those questions or not? The more you simply refuse to answer them (and do things like continue to criticise what you don’t like instead) the more it appears that your beliefs are simply ideological and the actual mechanics and results don’t matter. If I’m completely and utterly wrong about that, why are you so staunchly unwilling to explain?

    Thumb up 1

  17. CM

    I’m in the process of proving that CM has found a way to get paid for every down vote.
    There really is no other explanation.

    It’s been proven beyond doubt that some people here judge everything here (quality of argument/discussion) on the number of thumbs. Of course you could lay out a brilliant argument at a lefty site and get 34 downthumbs and 0 upthumbs and that would mean your argument is actually the largest smelliest pile of shit ever pushed out. But, strangely, I bet you wouldn’t apply that logic there…..presumably they’d all be too stupid to see a brilliant argument.
    (Not suggesting I’ve ever made a brilliant argument here, before anyone inevitably and predictably jumps up and down)

    Thumb up 2

  18. CM

    You are so full of shit.

    Yes, and retarded and illiterate and etc etc etc. I’m well aware of your thoughts.
    Where is the equivalent of Ezra Klein or Krugman on the right? Not just critiquing and explaining what is wrong, but what SHGULD happen and WHY? Not just “drop taxes, drop government spending” but WHY. Not “because it’s the right thing to do” but specifically what that will do for the economy (demand, jobs, growth).
    Because clearly you’re not willing to tell me where the additional demand is going to come from, or whether you even consider that demand is irrelevant.

    Thumb up 1

  19. Seattle Outcast

    You don’t lie very well, but you do it often. Everything you ask for has been given to you repeatedly, yet you pretend to not have received anything to your satisfaction. And now you’re back to post more lefty opinion pieces under the guise of facts and give pseudo lectures to all the hicks.

    Go fuck yourself CM, we’re not playing your little game any longer.

    Thumb up 3

  20. CM

    You don’t lie very well, but you do it often.

    Awesome, you’ve fully morphed into Alex.

    Everything you ask for has been given to you repeatedly, yet you pretend to not have received anything to your satisfaction. And now you’re back to post more lefty opinion pieces under the guise of facts and give pseudo lectures to all the hicks.

    Nothing I’ve been given even remotely answers the same questions I keep asking. And I’ve explained why they don’t, repeatedly.

    Go fuck yourself CM, we’re not playing your little game any longer.

    Oh I see, you operate as a collective now.
    It’s no game. It’s just some questions. It’s bewildering that you’re all so angry about some pretty basic and non-threatening questions about your own beliefs.

    Thumb up 0

  21. Mississippi Yankee

    Where is the equivalent of Ezra Klein or Krugman on the right?

    bgeek already told you Thomas Sowell! He’s an economist! Here are some of his credentials!

    Thomas Sowell (born June 30, 1930) is an American economist, social theorist, political philosopher, and author. A National Humanities Medal winner, he advocates laissez-faire economics and writes from a conservative and libertarian perspective. He is currently the Rose and Milton Friedman Senior Fellow on Public Policy at the Hoover Institution, Stanford University.

    Here’s another one! Dr. Walter Williams!

    Dr. Walter E. Williams, PhD; (born March 31, 1936) is an American economist, commentator, and academic. He is the John M. Olin Distinguished Professor of Economics at George Mason University, as well as a syndicated columnist and author known for his libertarian views.

    And now you’re back to post more lefty opinion pieces under the guise of facts and give pseudo lectures to all the hicks.

    Yanno, I’ve read that about him…

    Thumb up 4

  22. Dave D

    Did CM really not know about Sowell or Williams? The walls on his liberal/collectivist echo chamber are REALLY thick!

    Thumb up 5

  23. Dick Fitzwell

    Who should I be listening to / reading on economics?

    Start with Bastiat.

    The always excellent Henry Hazlitt sort of expands on Bastiat’s writings here. And he does a bang up job with Lord Keynes’s General Theory here which I highly recommend to everyone.

    Thumb up 1

  24. CM

    Hidden due to low comment rating. Click here to see.

    Thumb up 1

  25. JimK

    The inability to recognise that I’ve RESPONDED to someone mentioning them first……

    Jesus fucking Christ. You are one piece of goddamned work, man. Your family members must be fucking saints.

    THIS IS NOT THE FIRST TIME YOU’VE MENTIONED THE THUMB RATINGS. I THOUGHT THAT MUCH WOULD BE OBVIOUS SO I DIDN’T SPELL IT OUT IN GREAT DETAIL, AS I ASSUMED THAT NO ONE, NOT EVEN A PEDANTIC ASSHOLE WHO LOVES TO PICK FIGHTS ON THE INTERNET, WOULD TRY TO BE THAT MISLEADING AND DELIBERATELY OBTUSE.

    While this is my first time commenting on your blatant and obvious obsession with the thumb ratings, my reaction is, just so you’re absolutely clear, CUMULATIVE.

    Wow. Just wow. And you wonder why people react to you the way they do?

    Thumb up 6

  26. Poosh

    Ah dudes, you know, I tend to skip over CM’s writings these days but like when his comments get “hidden due to low ratings” that’s basically gonna make me read what he wrote…

    Thumb up 0

  27. Section8

    Hmm, we’re back to the 50 lines per thread of, “I don’t really subscribe to a theory, but every one of them except the one I subscribe to is wrong, and no one nowhere can prove it otherwise.” Some things never change. Yawn. Wake me up when something new comes along. Thanks.

    Thumb up 5

  28. CM

    Hidden due to low comment rating. Click here to see.

    Thumb up 0

  29. Section8

    WTF? How does asking specific questions about theories/opinions (that people here hold) equate to saying they are wrong? As I said a while ago, there are many highly intelligent people on the right, so there must be answers I don’t know about.
    Why is this apparently so very different to understand?
    I’m not looking for anyone to prove anything. I’m just looking to fill in some detail gaps. I’m looking for how the theory is applied in practice. It’s got to the point where it seems as if there’s something threatening about asking questions.
    “50 lines per thread” – well if we didn’t have to go through all this stupid bullshit and could actually discuss the subject……

    So explain…

    Where is the equivalent of Ezra Klein or Krugman on the right? Not just critiquing and explaining what is wrong, but what SHGULD happen and WHY? Not just “drop taxes, drop government spending” but WHY. Not “because it’s the right thing to do” but specifically what that will do for the economy (demand, jobs, growth).

    Why don’t you tell me? You can’t think of one? You’re the one who has been on the search. Not one person out there you can think of?

    Who should I be listening to / reading on economics? Glenn Beck?

    Who are you listening to now? Seems like your first choice when looking on the right would be one of the lower bars. Why is that?

    I’m sure we all have bias. But I don’t ‘adhere’ to any branch of economic thought. In this current economic situation, all I’ve heard from the right (aside from saying that Keynesian answers to a slump are all wrong) are vague and ideological.
    I’m coming from “prove Keynesian theory wrong” because it’s not much of a discussion if you come from nowhere. And, as I say, some of it makes sense to me, and seems to be what pretty much all the experts say too.

    WTF indeed.

    http://right-thinking.com/2012/06/03/delusions-of-mediocrity/#comments

    I think my comment has plenty of merrit. Anyhow, no amount of information will change your conclusion. Many here have realized that long ago, and that’s not really the issue, it’s just the faux argument that you’re just looking for answers so you can somehow understand how the world works. You, like everyone else on the planet will slant toward the arguments that support the thought you subscribe to. Being the diehard you are you’ll slant even more, and there is nothing wrong with it. Just have the honesty to admit it.

    As far as the abuse and name calling most here will lose patience after a while because they have other things in life they need to do. They’re not interested in winning a virtual debate trophy by seeing who has the stamina to run in circles the longest. They’re here to shoot off their two cents to Hal’s, Rich’s or Alex’s (what the fuck happened to those two?) posts and that’s about it. Just like 99% of anyone who posts on a blog here or anywhere else. Just sayin’.

    STOP THINKING IN BINARIES

    He’s thinking in binaries!

    LOL!

    Thumb up 1

  30. CM

    Why don’t you tell me? You can’t think of one? You’re the one who has been on the search. Not one person out there you can think of?

    Not one that explains the big holes I see in the theory. Not yet anyway. Which is why I thought I’d ask for some assistance.

    Who are you listening to now? Seems like your first choice when looking on the right would be one of the lower bars. Why is that?

    The Beck reference was trying to get people to give me an alternative. I seriously would never waste my time looking to Beck for economic explanations.

    WTF indeed.

    I honestly don’t know why you’d say ‘WTF’ about what I said in that quote.

    I think my comment has plenty of merrit.

    Which comment? You quoted me from the other thread but I’m not sure why.

    Anyhow, no amount of information will change your conclusion.

    I’ve changed conclusions on other things based on new/different information or arguments. Gun control, immigration. Just last week Xetrov provided a link with a whole lot of info about Ayn Rand I was not previously aware of. I concluded that if the info was correct then the accusations I previously referred to were untrue.

    Many here have realized that long ago, and that’s not really the issue, it’s just the faux argument that you’re just looking for answers so you can somehow understand how the world works. You, like everyone else on the planet will slant toward the arguments that support the thought you subscribe to. Being the diehard you are you’ll slant even more, and there is nothing wrong with it. Just have the honesty to admit it.

    See above. I’m a pretty shitty ‘diehard’. I do certainly lean certain ways on many issues, but that’s about as far as it goes. More often I can see good (or at least decent) arguments on both sides.

    As far as the abuse and name calling most here will lose patience after a while because they have other things in life they need to do. They’re not interested in winning a virtual debate trophy by seeing who has the stamina to run in circles the longest. They’re here to shoot off their two cents to Hal’s, Rich’s or Alex’s (what the fuck happened to those two?) posts and that’s about it. Just like 99% of anyone who posts on a blog here or anywhere else. Just sayin’.

    Well said.
    And yeah, what DID happen to Rich, and then Alex? Are main contributors being picked off one-by-one (starting with good ole CzarChasm/BluesStringer)? Hal, look out.

    Thumb up 1

  31. sahrab

    starting with good ole CzarChasm/BluesStringer

    Good riddance to that piece of shit.

    Set aside his cowardice of deleting posts that called him out on his bullshit, authors and posters are equally at risk of getting their idiocy refuted and debunked. Anyone who claims he’s a “strict constittuionalist” and claims to follow the desires of the Founding fathers, and then denies the fundamental system of government (co-equal branches) solely because an outcome didnt go the way he liked, is nothing more than a political party hack and a waste of the energy it takes my computer to run in order to read his shit.

    Dont know what happened to Alex, i usually dont agree with his blatant & militant party idealism, but he’s entertaining and he frequently gets CM’s panties in a twist (usually good for a bit). I enjoy some of Rich’s posts, but his blatant police loyalty and blind religious ideology get in the way at times. Most of Hals posts fall in line with my own social stances, except for his stance on AGW (not trying to get anythign started), but he is more fiscally liberal than i am.

    Jim’s just an ass.

    All of that are one of the reasons i come back to this blog. There are many different opinions and views posted, and i like challenging my beliefs against them.

    Except for CM’s

    Thumb up 2

  32. Hal_10000 *

    , Rich’s or Alex’s (what the fuck happened to those two?)

    Yeah, I’ve gotten a little nervous about that too. Hope they’re OK.

    Thumb up 0

  33. HARLEY

    Yeah, I’ve gotten a little nervous about that too. Hope they’re OK.

    I thought Alex was taking break for some reason….?

    Thumb up 0

  34. CM

    There are many different opinions and views posted, and i like challenging my beliefs against them.

    Except for CM’s

    ;-)

    Yeah, I’ve gotten a little nervous about that too. Hope they’re OK.

    They’ve Thelma and Louise’d it…..

    This thread needs pics!

    Yeah, of the final England v Sweden score….

    Thumb up 0