• Knave Dave
    05/23/2016 - 18:16
    This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve...

Here's A Chart You Won't See On CNBC

Tyler Durden's picture


"Record corporate cash"..."Record corporate cash"... "Record corporate cash"

That pretty much covers most of the conversation on prime time financial media and TV stations when discussing corporate balance sheets.

There is, however, one big problem with that mantra. As Zero Hedge first showed in January with "Corporations Have Record Cash: They Also Have Record-er Debt, As Net Leverage Soars 15% Above Its 2008 Peak" companies indeed have tons of cash. What isn't discussed is where that cash came from. The answer: debt. Because while companies have record cash, they have recorder-er debt.

Today, we are happy that more are starting to notice this simple math problem. Here is Deutsche Bank's Torsten Slok who is the latest to be struck by this "revelation".

If you look at cash levels relative to debt levels you find that corporate cash holdings are at the lowest level in 15 years, see also the chart below. In other words, a very important reason why corporates have more cash is because they have taken on more debt via IG and HY issuance. Expect capex to accelerate going forward but keep in mind that debt levels for corporate America are at the highest level ever and there is a risk going forward that higher rates through debt-servicing costs and higher defaults could have a negative impact on the recovery and hence the terminal rate for both short and long rates.

Of course, as long as rates are low and keep declining, this record debt hoard is not a big issue.

Once rates start going up, however, nobody would possibly have been able to foresee the absolute massacre that will take place at corporations, levered with publicly tradable debt to never before seen levels.

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Wed, 04/30/2014 - 10:29 | 4711893 bania
bania's picture

But looks like it's off the lows for the decade.

Wed, 04/30/2014 - 10:32 | 4711910 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Borrow until they take away the credit card. No different than the typical US debt slave.

Wed, 04/30/2014 - 10:35 | 4711926 LetThemEatRand
LetThemEatRand's picture

Part of the reason they are borrowing is to avoid taxation.  They hoard cash overseas, then borrow money for operations in countries that tax their income.  Nice little loophole not available to the average US debt slave. 

Wed, 04/30/2014 - 10:45 | 4711968 Manthong
Manthong's picture

Yeah, like Apple really needed to float that last dozen billion or so in bonds…

It has a net positive position and more real cash than the US government.

Wed, 04/30/2014 - 10:52 | 4711984 Pladizow
Pladizow's picture

In revolution there are two types of people: those who make it and those who profit from it.” – Napoleon

See: TBT, TBF, SJB, JGBD and many others!

Wed, 04/30/2014 - 11:37 | 4712242 NotApplicable
NotApplicable's picture

MOAR ZIRP!!!!!!1111!!!!11!

Wed, 04/30/2014 - 12:07 | 4712403 Xibalba
Xibalba's picture

Not gonna see it on Bloomberg either.  They've been obsessed with basketball for the last two days.  #destraction

Wed, 04/30/2014 - 13:01 | 4712660 NoDebt
NoDebt's picture

You mean it was all <gulp>..... a LIE?

That... that's not possible.  

I don't believe it.  I WON'T believe it.  

Wed, 04/30/2014 - 13:36 | 4712804 walküre
walküre's picture

Sterling did nothing wrong. This whole thing is a farce. The National Black Association can juggle it's own monkey balls. Soon to be featured on BET and commented by Oprah and Arsenio. I'm watching European soccer games instead.

Wed, 04/30/2014 - 20:00 | 4714257 Keyser
Keyser's picture

The Sterling debacle is just getting started... He has said he isn't selling... The drool is running down the lawyer's chins... Watch for him to sue everyone from the bimbo ex-girlfriend to the NBA... 


Thu, 05/01/2014 - 03:43 | 4715117 HughK
HughK's picture

12 ZH members have supported walküre's post.  I'm not one of them.

Wed, 04/30/2014 - 13:37 | 4712803 Polonius
Polonius's picture

Bloomberg TV runs the same program every day - Betty sucking up to oligarchs with the most annoying voice on television, and the red head sucking up to oligarchs with the occasional "now wait a minute" interjection to be sure no guest ever finishes a complete thought.  And then there's Matt Miller.  He must have photos of big Mike becuase he actually seems human, sane and capable of independent thought. 

Wed, 04/30/2014 - 11:45 | 4712291 svayambhu108
svayambhu108's picture

In war there are two types of people: those who make it and those who don't

Wed, 04/30/2014 - 17:17 | 4713789 U4 eee aaa
U4 eee aaa's picture

In war there are two types of people: those who die and those who live the rest of their lives with PTSD nightmares

Wed, 04/30/2014 - 17:20 | 4713799 Flux
Flux's picture

At Zero Hedge there are two types of people:

Those who pine away for WW3 and global economic collapse and those who make bank.

Wed, 04/30/2014 - 19:39 | 4714200 villainvomit
villainvomit's picture

I see three types of people at ZH

The vast majority that DO NOT believe in all the ipse dixit bulllshit we are fed 24/7.

A handful that don't have a clue.

And.....those that may fit in the first category listed above, but have their own category as they would really, really like to punch Jamie Dimon in the face.

Just sayin.

Wed, 04/30/2014 - 11:25 | 4712182 forwardho
forwardho's picture

Sir, I am but a lowly gardener, And I have more real cash than the US government.

The US balance sheet is a silk stocking stuffed with shit.

Wed, 04/30/2014 - 12:40 | 4712550 Pickleton
Pickleton's picture

With images of a playdo press in my head.  Thanks.

Wed, 04/30/2014 - 17:30 | 4713840 The Shootist
The Shootist's picture

Talleyrand would do well in the current government. Led to slavery by snakes we are.

Wed, 04/30/2014 - 11:35 | 4712157 Ignatius
Ignatius's picture

Then comes the canard of "tax relief" so American corporations will be incentivized to repatriate the cash under the illusion of expanding domestic investment (jobs).

Wed, 04/30/2014 - 15:56 | 4713490 daveO
daveO's picture

Only after rate increases squeeze them, like 30 yrs ago.

Wed, 04/30/2014 - 15:05 | 4713287 pitz
pitz's picture

This dramatically over-states cash (while not, of course, under-stating debt).  As foreign 'cash' has to be reduced by 30%+ if it is to ever be paid to the benefit of domestic debt or domestic shareholders. 

I'm not surprised though.  All these CEO's think there's going to be some magic repatriation tax amnesty, which is quite doubtful.  Meanwhile that 'cash' loses value with each passing year. 

Wed, 04/30/2014 - 10:37 | 4711939 101 years and c...
101 years and counting's picture

borrowing to pay out dividends and buy back stocks at bloated prices is great for future growth.....

but, only in the eyes of the top .0001%.  this country is so rotten and corrupt, we're fucked.

Wed, 04/30/2014 - 11:11 | 4712111 Thermopylae
Thermopylae's picture

"That's why I'm richer than you"   -  JDimon

That will be taught to our grandkids right along side with "Let them eat cake".


Wed, 04/30/2014 - 12:54 | 4712620 steveo77
steveo77's picture

With Fuku blowing up an aerosolizing, let them eat and breath yellow cake.

Wed, 04/30/2014 - 13:13 | 4712714 mt paul
mt paul's picture

yellow cake


with Mox fuel frosting

and plutonium sprinkles 

Wed, 04/30/2014 - 13:24 | 4712755 DaddyO
DaddyO's picture

With China and Russia looking like the good guys in the battle of wits with the current USSA regime, Woar becomes the final outcome.

World opinion is rapidly escalting towards siding with Russia. China is willing to finance whomever is willing to launch the first volley.

The USSA becomes the pariah and a well placed nuclear attack on NYC and Vichy DC has all the earmarks of being acceptable in the world's eyes.

Afterall, they had it coming...

Then it's on like donkey kong.


Wed, 04/30/2014 - 13:40 | 4712819 walküre
walküre's picture

Spare NYC. Vichy DC can sink into a black hole for all I care. To even things out, blow up Hollywood for good measure. That would set things right for a few decades and mankind just may have a chance to evolve further.

Wed, 04/30/2014 - 20:04 | 4714277 Keyser
Keyser's picture

NYC has already been targetted, Obozo told us himself... 


Wed, 04/30/2014 - 15:04 | 4713285 Winston Churchill
Winston Churchill's picture

Talking of which, what the hell just happened to the dollar ?

Wed, 04/30/2014 - 15:44 | 4713452 Boxed Merlot
Boxed Merlot's picture

That will be taught to our grandkids...


I'll do my part. 


And by the way, the sentiment was taught before the guillotines too:

When the wicked dies, his hope will perish,
    and the expectation of wealth perishes too.

12 Whoever belittles his neighbor lacks sense,
    but a man of understanding remains silent.


Proverbs 11: 7 & 12



Wed, 04/30/2014 - 10:34 | 4711914 Headbanger
Headbanger's picture

So just where is all this debt money going if it's not going into capex for future growth??


Oh wait....

Wed, 04/30/2014 - 10:42 | 4711919 Ying-Yang
Ying-Yang's picture

Off topic....

Saudi Arabia shows off nukes... everyone loves a lil nukie!

Earlier today, at Saudi Arabia's northeastern military base of Hafr al-Batin, the kingdom's armed forces held a massive military parade to mark the conclusion of a major exercise codenamed "Abdullah's Sword." A surprise feature of the parade was the inclusion of two Chinese DF-3 missiles, known as the CSS-2 in NATO nomenclature. These missiles were supplied to Saudi Arabia in 1987 and have long been based in the mountainous desert well south of Riyadh, from where they can target Iran. Today is the first time they have been seen in public.


Take note of who was there:

Top guests included King Hamad of Bahrain and Sheikh Muhammad bin Zayed, the crown prince of Abu Dhabi, the lead emirate of the UAE. Also present was Pakistani army chief Gen. Raheel Sharif, who sat next to Prince Mitab, the minister of the Saudi National Guard and senior son of the king.



Wed, 04/30/2014 - 10:48 | 4711975 Manthong
Manthong's picture

Why would they ever need to use those things?

Their good buddies in Israel would be happy to do that for them.

Wed, 04/30/2014 - 13:17 | 4712730 mt paul
mt paul's picture

one of those nukes is a 20 yr old liquid fuel relic


hope they have been on top of O ring replacements

Wed, 04/30/2014 - 10:39 | 4711947 SAT 800
SAT 800's picture

It's coming. Hedge accordingly. And I don't mean anything on that chart, either.

Wed, 04/30/2014 - 13:41 | 4712821 walküre
walküre's picture

cash in the backyard?

Wed, 04/30/2014 - 11:06 | 4712088 SAT 800
SAT 800's picture

I'm now short the ES contract for June from 1875.25 times four; $200 a point. with todays date. Let's see what happens next.

Wed, 04/30/2014 - 11:29 | 4712201 Tom_333
Tom_333's picture

Well off the lows for the devade. Well off... You need to get with the program

Wed, 04/30/2014 - 12:42 | 4712564 ZH Snob
ZH Snob's picture

once hyperinflation kicks in they'll have more cash than they can handle.



Wed, 04/30/2014 - 10:30 | 4711899 VD
VD's picture


Wed, 04/30/2014 - 10:30 | 4711901 youngman
youngman's picture

unintended consiquences by the FED

Wed, 04/30/2014 - 10:36 | 4711936 DavidC
DavidC's picture

"The market is not rigged...the market is not rigged..."


Wed, 04/30/2014 - 10:55 | 4712008 SunRise
SunRise's picture

 as seen on a Market Rigger BillBoard

Wed, 04/30/2014 - 10:35 | 4711905 TideFighter
TideFighter's picture

Corporate Cash being held WHERE?

Can't bring IT home, so bonds we go!

Wed, 04/30/2014 - 10:35 | 4711915 Dr. Engali
Dr. Engali's picture

Expect CapEx to accelerate going forward? WTF are they smoking? As long as Zirp is in place and until the over capacity issues are addressed, companies will continue to reward shareholders with buy backs and dividends over spending on CapEx.

Wed, 04/30/2014 - 10:56 | 4711988 ParkAveFlasher
ParkAveFlasher's picture

We all know that the American consumer just can't git enough of that innovative stuff.  Just give them bigger wallets if they need to carry more cards. 

Of course by "American consumer" I do mean the global consumer of prime American export goods like debt, litigation, pre-detonated explosives, and Halliburton contractors (who require concessionaires, translators, and so forth to function properly in the restoration and ongoing maintenance of batch-obsoleted community infrastructure deigned for upgrade by remote-guided airborne flag implacement devices).

I wonder if "capex" includes devices intended to provide revenue streams or some other bogus scumduggery.  These fuckers wouldn't tell a lie that was easily uncovered. 

Wed, 04/30/2014 - 11:18 | 4712150 forwardho
forwardho's picture

(batch-obsoleted community infrastructure deigned for upgrade by remote-guided airborne flag implacement devices).

Bravo!!!  That madame, is a work of art.

Wed, 04/30/2014 - 13:08 | 4712690 NoDebt
NoDebt's picture

Agreed, that is one heluva piece of wordsmithing there.

Wed, 04/30/2014 - 10:59 | 4712030 TrumpXVI
TrumpXVI's picture

Yeah, that, "Expect CapEx to accelerate going forward" part is what stopped me short....makes no sense at all.  There's not a snowball's chance in Hell that companies are going to expand production.  All the borrowed money is for something else entirely.

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