A Comprehensive Presentation Of America's $1 Trillion Cash Hoard

Tyler Durden's picture

Perhaps the biggest, and most overtouted, silver lining of the US depression is the massive (presumably) amount of cash held by corporate America, built up over the past two years thanks to massive headcount reductions, overall cost-cutting, and record drops in CapEx investment. And while American non-financial companies currently do indeed have a record $943 billion of cash (of which however $233 billion is in short-term investments), they also have a record amount of debt to go with the cash: 3,394 billion at mid 2010. In addition, as we have long cautioned, nearly a quarter of this cash is held abroad and can not be repatriated. Furthermore, putting the $1 trillion in perspective, it is slightly higher than the total combined annual corporate capital spending and dividend payments by non-financial companies. As such, the cash buffer is certainly not as big as is touted by assorted permabulls. In fact, as even Moody's, which has just released the most comprehensive analysis on US corporate cash discloses, "companies are unlikely to spend their cash on expansion and hiring until there is greater certainty about the direction of the U.S. economy." The primary culprit: companies are all too aware of the record excess capacity slack, and that there is no need to invest for the future until others do so first. But we already knew that. And since we have already been digging underneath the surface of the US cash hoard, and uncovered a variety of unpleasant facts, it has been remarkable how quickly this topic is no longer a talking point among CNBC's anchors and is only brought up by its most clueless guests who don't realize only the dunces now use this argument (kinda like the whole "green shoots" thing that did miracles for Dennis Kneale's career). So here are all the details about the corporate cash stash, and a whole lot more.

First, we present some big picture thoughts from Moody's, which to our surprise was also unable to come up with a favorable scenario that sees this cash as being promptly reinvested into the floundering economy:

The balance sheets of U.S. non-financial companies are in good shape, in contrast to government and household balance sheets. Some $943 billion of cash and short-term investments sat in their coffers at mid-year 2010, compared with $775 billion at the end of 2008. Corporate America could use these cash holdings to cover a year’s worth of capital spending and dividends and still have $121 billion left over.

Economists, politicians and everyday Americans contemplate how that cash, if invested in inventory and plants, could strengthen the U.S. economy and get more people back to work. But we believe companies are looking for greater certainty about the economy and signs of a permanent increase in sales before they let go of their cash hoards, which they suffered so much to build. Given low demand and capacity utilization within certain industries, companies are wary of investing their cash in new capacity and adding workers, thereby doing little to abbreviate the jobless recovery. It also does not help that much of the cash, perhaps one-fourth, is located offshore and unlikely to be repatriated to the U.S.

And confirming that there are no organic growth opportunities in the US, a fact that the administration should be ashamed of more than any of its other disastrous economic policies, is Moody's osbervation that the only possible use for the record cash is not for capex and hiring, but for synthetic shareholder friendly actions:

The cash provides U.S. companies safety come rain or shine. In the event of a relapse in the U.S. economy, the cash will buffer the downturn. If the economy gradually improves, we expect more companies to begin buying back shares as it is hard to justify to shareholders ever-increasing cash balances that yield a less than 1% return. We also think that mergers and acquisitions will be a more probable use of cash over the next couple years. With low interest rates and generally low company valuations, we expect companies will seek to consolidate their market positions or add complementary businesses.

In fact, by "adding businesses" companies will ultimately let even more people go! After all the primary driver of most M&A are "synergies" which is a prospectus-friendly way of saying mass layoffs. Essentially, the greater the corporate behemoth, the worse off the US middle class is. But far be it for us to point us such minor details on the grand scheme to a communist paradise.

The chart below summarizes the total cash and short-term investment holdings of corporate America. It is notable, that while the total has grown since 2009, it has been purely due to the increase in short-term investments (we are confident companies would love to hear about another run on money markets that would lock their $233 billion in short-term holdings indefinitely).

Here are the key summary findings on America's cash:

  • Total cash and short-term investments at U.S. non-financial firms that have Moody’s ratings were $943 billion as of mid-year 2010, up from $775 billion at year-end 2008 and $937 billion at year-end 2009.
  • The top 20 companies held $346 billion of the cash, or 37% of the total.
  • The top cash-heavy industry sectors are technology ($207 billion), pharmaceuticals ($124 billion), energy ($105 billion), and consumer products ($101 billion).
  • Much of the cash held by the larger companies is overseas and not likely to be repatriated to the U.S. Multi-national companies need this cash to finance their international operations, which are often growing faster than their domestic businesses. In addition, unfavorable tax consequences discourage the repatriation of cash to the U.S.
  • The firms’ aggregate capital expenditures over the last 12 months were $576 billion, making the ratio of cash to capital expenditures 1.64 times. This exceeds the ratio as of December 2007 and December 2008, when it was 1.1 times, and it may be an all-time high. U.S. companies have the capital to fund normal and even extraordinary capital spending, and in many cases acquisitions, without having to raise additional financing.
  • Likewise, current cash can easily cover the study group’s annual dividends, which were $246 billion over the last 12 months.
  • Together, capital spending and dividends were $822 billion over the last 12 months, equal to 87% of the firms’ mid-2010 cash holdings.
  • Many companies have bolstered cash through debt offerings, especially in 2010. Much of the debt-issuance proceeds have been used to refinance existing debt, but some has been stockpiled for broadly termed general corporate purposes.
  • At mid-year 2010, the aggregate cash-to-debt ratio was 0.28, materially better than the 0.23 at December 2008. While we hear a lot about the looming debt refinancing cliff, receptive bond markets and generation of operating cash flow are combining to make the cliff look less intimidating for the stronger, higher-rated companies.

As the chart below demonstrates, total cash has grown not so much as a function of cash from operations increasing notably (it hasn't), which has been flat for the past 4 years, but due to a massive cut in the outflow side of the equation: CapEx and Dividends.

While the much ignored concept of corporate debt is also at a record, the total debt/cash ratio has indeed dropped. However, since the end of 2009, it has once again started to creep back up, and is now at 3.6x from 3.58x at December 31.

And just like in the stock market, where a few companies are accountable for a majority of the action, so here, the top 20 US companies are responsible for 37% of the total cash and short-term investments, holding $346 billion of cash and ST investments.

A granular analysis of cash sources and uses indicates that in 2009 Working Capital was a notable source of cash, at a time when debt issuance dropped notably (but is again growing in 2010), while cash buybacks have been relatively flat.

Focusing specifically on Funds From Operations (net income):

The speed and depth of the economic downturn led U.S. companies to very quickly downsize their operations and lower costs. The latest recession was not a rolling recession like we have often experienced. In the past, companies typically delayed taking painful actions or took small steps while they waited to see how bad and how long-lived the downturn was likely to be. However, in the autumn of 2008, it was painfully clear that the downturn was going to be bad. Many industrial companies reported that “the phones just stopped ringing.”

For example, in the U.S. steel industry, industry-wide capacity utilization went from 86% in mid-September 2008 to 50% by Thanksgiving. It was to remain in the low 40% range through the first half of 2009. The energy industry had been flying high with oil prices at $140 per barrel in July, but they declined to $32 per barrel by December, and the U.S. rig count dropped in half between mid-September 2008 and May 2009. The Purchasing Managers Index (PMI) dropped from 49.2 in August 2008 to 32.5 in December, the lowest level since 1980.

On top of the dire demand picture, the near total freeze-up of credit markets was a shock. Companies adopted the view that their lenders could not be relied on to help them through a liquidity problem. They were in the middle of the ocean in a leaky boat and no one was coming to the rescue. Just to be safe, many non-investment grade rated companies drew down their credit lines and parked the cash in the bank.

Therefore, with little hesitation, the companies moved quickly to ratchet down costs. They idled plants, took rolling downtime, and furloughed or laid off employees. Some large manufacturers cut their workforces by up to one-third of pre-recession levels.

Today, with demand still relatively low, companies are not rushing to bring back workers until they are certain the storm has passed. While the net effect of these cost-cutting actions has not fully offset lower sales, it has enabled many companies to at least be modestly profitable. In many cases, this has been a remarkable performance compared to previous, more mild recessions.

The cost cutting also positions them well for what should be an impressive performance once the economy normalizes. The benefits of even the small recovery we’ve had so far are evident in sales and operating income. In 2009, the firms we studied for this report had operating income of $812 billion on sales of $8.65 trillion. As of mid-year 2010, only six months later and without a meaningful improvement in most key economic indicators, sales were up 5% (to $9.07 trillion) but operating income was up 19% (to $969 billion), on an LTM basis. We also note as of mid-year 2010, corporate sales and operating income are almost back to their 2007 pre-recession levels.

In other words, companies are massively leveraged to economic improvement. It also means that record high corporate margins have only one way to go from here: down. The trade off to this record lean efficiency is 17% unemployment. And just as corporate cash levels will not drop any time in the near future, so will employment levels not improve. But at least corporate CEOs are better off. And they all have the chairman to thank.

Next, we look at working capital:

In 2009, aggregate sales for the study group fell 12% from 2008. But for companies in highly cyclical industries such as manufacturing, durable consumer goods, chemicals, automotive, and construction, the sales declines were often 20% to 40%. In this environment, working capital investment fell sharply and released a total of $72 billion in cash in 2009. It is not an exaggeration to say that, at the height of the credit crisis, working capital was a more certain source of liquidity than the banking system.

Reduced inventory was the largest contributor to cash from working capital. Companies were able to live off their pre-recession finished goods inventory for many months and at times waited to have orders in hand before purchasing materials or manufacturing necessary parts. In other words, inventory was pulled down and not replenished. Many companies are still taking a cautious approach to inventory until there are stronger signs of economic growth. As a result, inventory in terms of days or months on hand is below the historical average for many industrial sectors.

Accounts receivable also shrunk, but a good portion of this dis-investment was offset by reductions to accounts payable.

Note the underlined text: during the next crisis, it will be prcisely working capital that will serve yet again as an in house cash flow substitute for short- and mid-term capital funding needs. Oddly enough, despite this so called "cautious approach" to inventory stocking, according to top down diffusion metrics, inventory levels are again creeping higher, meaning that going forward working capital will likely be a drain of cash once again, just like in the good old times.

Lastly, the historically biggest source of cash in the pre-Lehman years was debt issuance. This will once again soon be at the forefront of cash sourcing. For now, companies are merely refinancing record amount of debt as part of the 2012-2013 cliff issue. Very soon, they will start incurring incremental debt, and the debt/cash ratio will once again start to rise drastically. We anticipate non-fin companies to accumulate over $4 trillion in total debt by the end of 2011, just because they can, and just because as BofA earlier noted, they would be stupid not to take advantage of virtually zero cost debt at a time when Bernanke has pretty much guaranteed he will not raise interest rates ever.

The last big contributor to an expansion of cash at U.S. companies is the issuance of new debt. This source of cash predominantly came into play in 2010. As the economy stabilized and the credit markets, especially the bond market, opened up, companies took advantage of the opportunity to refinance near-term debt maturities. In the first nine months of 2010, U.S. high-yield debt issuance was a record high $170 billion, with another $300 billion of investment-grade debt issued. In our study group, total debt was $3,394 billion at mid-year 2010, up $42 billion since December 2009. This puts the ratio of debt to cash at U.S. corporates at 3.6 times, a little higher than at December 2009 (3.58 times) but otherwise the lowest it has been in the last five years (see Figure 3).

As for which industries are the biggest holders of excess cash, there are no surprises there:

The top cash-heavy U.S. industry sectors are technology, pharmaceuticals, energy and consumer products. In this section we list the cash leaders in these four sectors and compare the industry-wide cash to aggregate industry capital expenditures over the 12 months ended mid-2010. We list every company in these four industries that have more than $5 billion of cash and short-term investments. Cash at the other major industries is shown at the end of this section.

The table below looks at the individual tech companies responsible currently for the biggest cash hoard in the world:

A total industry breakdown is as follows:

Next up, we will attempt to determine just how much of this $1 trillion in total cash is held abroad. Per Moody's it is $250 billion. According to others, the amount is as high as half a trillion. If the latter case is valid, it would mean that of the actual $710 billion in cash ($233 billion in ST investments aside, which are far less fungible), almost 70% of the cash is non-touchable!

And even that aside, the bottom line is that companies have done nothing less than the inverse of what our Keynesian government is doing: they have cut all investment in future business to the benefit of building out a cash buffer (while the government has taken all future benefits to the present day courtesy of an unlimited taxpayer funded piggybank). And since this capex will need to be reinvested at some point, assuming some reversion to the corporate mean, it is only a matter of time before cash levels decline dramatically once again, only this time nominal debt levels, as pointed out previously, will be at fresh record high levels, courtesy of Bernanke's ZIRP insanity.

At this point, we dare someone to bring up the cash on the sidelines
theory: within a few months this will be as forgotten as the whole
"green shoots" propaganda fiasco.


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VaJim's picture

Hahaha, cash on the sidelines.  How many times did the hosts and guests on CNBC pump that line to look and sound smart?  Great article.

blindfaith's picture

Cash and Equivalents is what the charts says.  Isn't an IOU considered cash on the accounting sheet?  Is anybody counting the IOU's ?   Are 'goods delivered, but not paid for'  counted in equivalents?

bingocat's picture

Short-term IOUs are Accounts Receivable. Not Cash & Cash Equivalents.

If you count them as cash, you'd have to count the Accounts Payable as Debt.

hotkarlandtheclevelandsteamers's picture

why is apple not on the top 20 list.

Cleanclog's picture

Agree.  Makes the whole list look bogus given last week's announcement.

lawrence1's picture

Someone correct me if I´m wrong, but isnt all this cash on the sidelines potentially highly inflationary if it starts getting spent?  What would it do to already soaring commodity prices?  Dont these companies get all kinds of tax breaks, sorry, incentives to encourage investment?  Frankly, I never believed that shit in the first place.  And all the bad investments losses paid for by the public.  Totally phoney capitalism, rather corporate fascism.  How can you go bankrupt if you run the government? Simple, you dont.  Until the ponzi collapses. 

Cursive's picture

Two words: Debt service.

Just to be safe, many non-investment grade rated companies drew down their credit lines and parked the cash in the bank.



The last big contributor to an expansion of cash at U.S. companies is the issuance of new debt. This source of cash predominantly came into play in 2010. As the economy stabilized and the credit markets, especially the bond market, opened up, companies took advantage of the opportunity to refinance near-term debt maturities.

Attitude_Check's picture

Absolutely!  When a company expects future earnings growth it can afford a higher debt ratio, conversely if it expect future earnings shrinkage it needs a lower debt ratio.


All that cash is already "spoken for" to pay-down the existing debt.  In a deflationary environment cash is king and it will take some serious predicted ROI to pry it out of their hands.

UncleFester's picture

"all this cash on the sidelines (is) potentially highly inflationary"

No, cash minus debt is negative.  This cash will not go into the economy, in general.  At best it's a wash, at worst...

Shit, the POMO days for the past two years dwarf these amounts.


i-dog's picture

"isnt all this cash on the sidelines potentially highly inflationary if it starts getting spent?"

Short answer: It won't get spent into the US economy.

a) As noted in the article, much of it is overseas and won't be repatriated;

b) As noted in the article and by the poster above me, it is well and truly offset by much greater debt.

Borrow here (under ZIRP) and save/invest there (where ROI is greatest).

blindfaith's picture

I-dog...you forgot to mention that as of October 22, ONE BILLION US dollars has been spent in the USA by corporations (not candidate raised funds) on political ads (reference NPM business national news yesterday).  That is 1,000-million corporate dollars helping to spread the wealth to main street.  God Bless America, and all you corporate typhoons. I would have rather just gotten a nice fat check in the mail and a list of who I need to vote for ( like they do in other countries).

11b40's picture

hahahahahah.  Assume you are joking.  Main Street won't see any benefit.  Corporate America and Main Street are mortal ememies, even if many on Main Street still don't see it.

rocker's picture

How did GE get on any list. Their accounting has always been a misleading fraud. Just another footnote.  Yup.

Mitchman's picture

When will we stop this structural insanity?  The corporations are acting rationally.  The rest of the world has gone mad!

wreynol4's picture

I like your swag

Cui Bono's picture

But, but, but, the POTUS will be on the Daily Show tomorrow getting the message out, whatever the fuck it is...... sigh....CB

ZeroPower's picture

I dislike that show even more now. Stupid liberal hippy.

Number 156's picture

Hmmm, It also seems that a lot of businesses and corporations see themselves in a banana republic. I'm sure they're scared to death of what more of that can mean down the road.

Speaking of banana republics, I hear that the voting machines in the USA have been possibly tampered with, and the goverment looks the other way as usual. I cant help but to laugh a little here, seeing that the USA is supposed to be the shining example of liberty and justice to all the non democratic and third world nations. It kinda sucks doesnt it.

Fraud-Esq's picture

Under the OLD FASB rules, how much clear cash do they have minus various black holes that only they know about? 

GE? Yeah, right....that's not cash, but a life-raft for the crash which was delayed by politicians and central bankers until further notice.    

Ludwig Van's picture


Such steely efficiency embedded within a lardy welfare politicult: Which is the real America?


doolittlegeorge's picture

first off no tech company will repatriate the cash or capital investment from abroad because "when you steal intellectual property your operation is located outside the USA."  The East Asians know most of the tech companies aren't their "for the cheap labor" since "they can get better quality and even better logistics if they were in Ohio."  Won't happen because "if want to steal your own people's intellectual property you have to give us the mfging plant"--which of course makes these companies great investments "provided they can work out all the intellectual property lawsuits amongst themselves."  There's a very interesting "three way" between Apple/Motorola/Microsoft right now as a matter of fact.  Take some time...learn why.  Needless to say "one look at the legal team says these guys aren't lacking in cash."  More to the point "look at cap ex spending."  If you look at Apple's cap ex spending "it's no accident they keep creating the top of the line."  Needless to say "if the cash isn't there you're not spending the non-money either."  Finally if you're looking for a dividend as your "truth teller" think again as well.  Your government has "solved the problem of yield."  You have none, so there.  So if what is said here really is true, well...we're already dead then, right?

gwar5's picture

This is the Latin dictator effect. When a marxist dictator comes into power, investment and capital flees, or sits on the sidelines, and the economy "mysteriously" stalls which requires scapegoats.

Nobody wants to be the next scapegoat to be slaughtered. They wait it out, or go away permanently if things don't look like they will turn around or it looks like they'll be targeted.

Halliburton was smart and saw it coming. They were demonized in the last decade and their HQ  moved from Houston to Dubai (no taxes) 60 days after the 2006 congressional class was seated. That's why they aren't beat up on anymore.  

Businesses are going on strike too.






Everyman's picture

Corporate America just "wrote off" the American Citizen.  This is infuriating.  If you "financial guys" do not understand what this post mean past the economic/stock/financial concerns and impact, you will never "get it". 
This is exactly why those criminals need to be put up against the wall hard and in finality.  They have wrecked the economy and then raped the remains.  I have ZERO moral  equivication on making these assholes pay for what they have don.  I am not alone, and there ane hundreds of millions like me that want Wall Street criminals OFF THE FACE OF THE FUCKIN' EARTH!!  The deserve to draw no more breath.  What the hell do you think it means in economist speak with this quote?

"Perhaps the biggest, and most overtouted, silver lining of the US depression is the massive (presumably) amount of cash held by corporate America, built up over the past two years thanks to massive headcount reductions, overall cost-cutting, and record drops in CapEx investment."


"The primary culprit: companies are all too aware of the record excess capacity slack, and that there is no need to invest for the future until others do so first."

That means screw everybody and thanks for the money.  You don;t have any more that we can extract from you therefore we will not invest in you.  Sorry!  It is "just business"!  Sorry to you Mr. Banker criminal CEO but a bullet in your head is "just business" as well, and I say a well paid investment.

"Perhaps the biggest, and most overtouted, silver lining of the US depression is the massive (presumably) amount of cash held by corporate America, built up over the past two years thanks to massive headcount reductions, overall cost-cutting, and record drops in CapEx investment."

That quopte is another "FUCK YOU AMERICA" from the banker criminal cabal.  Thanks for the layoffs, and the lack of committment to AMERICA.  We bailed you sorry assess out of your own fuckin greed fisky Bullshit, and THIS is the thanks that American Citizens get????!  ARE YOU FUCKIN' KIDDING ME.


I AM EVERYMAN and there are many that are FED UP and DONE with BAU!  The next group had better heed the warnings of Karl Denniger and the rest and FIX THIS FUCKIN' mess.  The bad guys go to jail, HFT goes away, Fed Res GOES AWAY.


That would make a pretty good start.  If the next crop of congressmen cannot or will not change, that show AMERICA that VOTING NO LONGER works and LAWS MEAN NOTHING.  It will be blood in the streets.



doolittlegeorge's picture

you're only encouraging them.  they make money on the actual blood in the streets, actually.  The question is "after giving them all the people's money in the bailout does the givernment really need to give them another trillion or two of the funny stuff"?  Well..."7 days to the election, boys!"  Now don't forget to listen to Jimmy Buffet sing "God's own Drunk" before you go.  If you "run into the bear" you're excused.

CitizenPete's picture

What will it take?  What will it take? 


Why do we sit?

Herd Redirection Committee's picture

"The bad guys go to jail, HFT goes away, Fed Res GOES AWAY."

Yup, we need an entire system reset.  We are compiling a list at PsychoNews of psychos in the oligarchy, and identifying them one at a time.  Check it out, PsychoNews: http://psychonews.site90.net

dizzyfingers's picture

I've come to the same conclusions as you...there is only ONE real solution.

No more making nice.

Incubus's picture

there are billions of "everymen" that are seen as nothing more than the cattle of civilization: units of labor, means of wealth production for the bourgeosie.


They'll slaughter us when we're no longer of use, and go onto the next herd.  The "east" is getting fattened up for their fleecing, and it will be the same story after they're fleeced; perhaps africa's next?  No matter--if you complacent fucks wait long enough, it'll be our turn to get some hand-outs from corporate mother once more. 

And all of us brought it onto ourselves, by playing their game for decades, for believing some delusional bullshit such as a piece of the pie actually being ours.  Get real.  Bloody war and revolution will not stop them either, why?  Because we're the problem.  A little whiff of a wad of ben franks under your nose and you're their whore; it doesn't matter what currency it's in, 30 pieces of silver is still 30 pieces of silver.


This is how a moral-less society ends, and I say good-riddance.  The culture of materialism and lack of character will end, and we'll be forced to forge something better out of ourselves. 

Widowmaker's picture

"The culture of materialism and lack of character will end, and we'll be forced to forge something better out of ourselves."

You nailed it.

grunion's picture

I sure am gonna miss air-conditioning!!

Attitude_Check's picture

So I assume you are investing in your local community using your savings (and leveraging that savings with more debt if needed) to pay for lawn care, a new car, a new patio, hiring a maid, etc.

It is certainly true that some companies and certainly banks have made their money by ripping off folks - but certainly not all.  It will not be to our benefit if the companies spend all their cash now, and then need it later and have to lay everyone off because they are bankrupt.  There comes a time where the grown-ups have to actually act grown-up, and that means dealing with reality the way it is and not they way we want it to be.

We are in the mess we are because folks think it is OK to demand what other people should do with their money - often via government.  Obviously that hasn't worked out so well.

Now what I want to see is a number of folks brought up on fraud, RICO, and treason charges:

1.  Hank Paulson,

2.  GW Bush

3.  Rob Rubin

4.  Ben Bernacke

5.  The CEOs of EVERY bailed out bank KNOWINGLY making ~80% of bad mortgages (based on sworn testimony)

6.  The Heads of Fanny and Freddie

7.  And just because he has been encouraging this nonsense by being criminally stupid - Paul Krugman

8.  Obama impeached

9. Sen Frank

10. Sen Dodd


arm50's picture

i bet the tax sheltered cash on the balance sheet is far greater than $250B and concentrated. AAPL's effective tax rate was 5% less this qtr primarily driven by oversea's revenue. IBM same story. they must all be waiting for the next capital repatriation tax holiday.  

Miles Kendig's picture

Schulden Macht Frei

What insanity

Herd Redirection Committee's picture

Yeah, for anyone who ever mentions the words Gold Bubble, how about Debt Bubble, Fiat Bubble?


Do you own any gold? No?  Do you have a large amount of debt?  Yes.  Hm.... Lets see where bubble is more likely to be...

Miles Kendig's picture

Do you own any gold? No?  Do you have a large amount of debt?  Yes.  Hm.... Lets see where bubble is more likely to be...

I'll be presumptuous and bite as if this is directed at me.  Y/N.  Looks like you're backwards this time there heard committee..  Besides, there really is only kind of bubble I am interested in. And no, unlike the preference of so many it's not made of glass and yes, it never runs out of prospects.

Herd Redirection Committee's picture

Haha, no, I can tell by your writings that you aren't heavily indebted, I was framing the question towards John Doe, who is skeptical of gold, and replies that there is a gold bubble!  

Miles Kendig's picture

Thought so.  Still, it is always best to ask.

I'll go with your debt proposition, but I'll reserve judgment on fiat.  Fiat run like Colonial Scrip that is focused on being far more micro sensitive would be fully serviceable without many of the drawbacks of the current debauchery


sbenard's picture

?Wow! Good info!

Now, if we can just convince the Teleprompter Tyrant NOT to impose another excess profits tax, as FDR did, that drained corporate America's cash reserves, put millions more Americans on the streets without jobs, and deepened the Depression. Why do I have serious doubts that he will? Keep his covetous hands off, that is.

dizzyfingers's picture

Check out HB4646 - not a hoax!

dizzyfingers's picture

 Night of the Living Fed - excellent


count_de_monee's picture

Portugal Update.

If you don't know what I'm talking about, read my earlier comments (note to TD: I've posted in the comments section what I believe is original and accurate analysis on a less covered topic. You may use it as you wish.)

As promised on the Portugal saga, I'm bringing you breaking news.

Here's the latest. The PSD party (largest opposition party) has just announced the breakdown of negotiations with the Socialist government to approve the budget. The leader of the opposition has scheduled a press conference for 2000 GMT today. Expectations are that he will announce the PSD will abstain in the vote in the name of national interests. I'm not so sure the consensus is right. He may very well announce his party will vote against the budget, which would mean Portugal's CDS will widen considerably, the government would fall and the IMF/EFSF would be on the next flight to Lisbon.


Stay tuned. It seems things are getting interesting in the EU again.

nmewn's picture

Been sayin this for years...

"...M&A are "synergies" which is a prospectus-friendly way of saying mass layoffs."

This is why I love this site.

The ability to cut through business conference marketing bullshit that all corporate officers go to and get to the nub of it.

Now, I wonder, ST yield rates being equal...we were to have a tax amnesty for foreign held cash along with a competitive corporate tax rate where that cash would be ;-)

Of course, that debt is also quite impressive...LOL.

dizzyfingers's picture

What have we learned in 2,064 years?

  "The budget should be balanced, the Treasury should be refilled,
  public debt should be reduced, the arrogance of officialdom should be
  tempered and controlled, and the assistance to foreign lands should
 be curtailed lest Rome become bankrupt. People must again learn to
 work, instead of living on public assistance."
                -  Cicero   - 55 BC
    So..., evidently nothing

Goldenballs's picture

Sitting on huge piles of cash whilst the customers they hope to sell to have less and less to purchase with.Economics of the madhouse.Until the elites introduce import quota,s and punitive taxation on cheap imports and produce goods at home we are all wasting our time.

11b40's picture

You are EXACTLY right.  Been saying it for 25 years.  We are stupid, stupid, stupid as a country to keep voting ourselves more an more benefits while at the same time reducing our ability to pay for them.

We "want" clean air & water, good roads and infrastructure, safe food, good working conditions, fair employment laws and minimum wages, good benefits and retirement plans, great health care...and on & on.

At the same time, we have "right" to the lowest possible prices when we shop - consumers or businesses.  Who gives a shit where it comes from?  Who gives a shit if it erodes the tax base, and eliminates the high wage jobs that pay for all the other stuff we "want"?

The math does not work, folks, and it never has.  We were sold out to the multi-national corporations, and we voted for it.  I don't remember which communist leader it was, but they nailed it when they said American "capitalist" would sell you the rope you use to hang them with.

We swallowed the supply-side economics 'theory' too, but now we are learning the hard way that it really is all about demand.

It's like we suspended the laws of Econ 101.  I learned 2 things in Chapter 1 of econ 101 over 40 years ago. 

First, 'Supply & Demand' - not Supply or Demand.  The 2 are forever coupled.

Second, 'Guns or Butter' - not Guns and Butter.  A society can one or the other, but not both.  In the history of mankind, it has never worked over time.

In the immortal words of Forest Gump, "stupid is as stupid does".

I could write a book on this, but I gotta go to work.  An account called yesterday with an opportunity, but I am having a lot of trouble finding the inventory to fill this potential order.  None of my vendors (I broker over 20 factories & import companies) seem to have an extra 3,000 pieces of anything.  3 years ago, this would not have been an issue.