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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.

DaddyO

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

 

jmo.

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.

http://www.washingtoninstitute.org/policy-analysis/view/saudi-arabias-mi...

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

but......

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..."

DavidC

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.

Wed, 04/30/2014 - 12:32 | 4712510 Tortfeasor
Tortfeasor's picture

You win the thread.

Wed, 04/30/2014 - 11:05 | 4711917 First There Is ...
First There Is A Mountain's picture

Precisely why you won't ever see the downward pressure on yields relent. From corporate debt to government debt, they simply cannot allow yields to return to longterm averages....

Wed, 04/30/2014 - 11:53 | 4712323 thamnosma
thamnosma's picture

"won't ever"... nope, nothing on this planet lasts forever.  So at some point, but it could be years away, this shit house will implode and it will be something to behold.

Wed, 04/30/2014 - 12:44 | 4712569 LooseLee
LooseLee's picture

Sadly, 'They' were unable to stop the 2007-2009 decline amongst others, 'They', the PINKO COMMIES, will eventually be overrun by Mr. Market. Mark by words....

Wed, 04/30/2014 - 10:35 | 4711922 yogibear
yogibear's picture

Why should they show it when the main idea is to keep the party going.

Wed, 04/30/2014 - 10:35 | 4711923 Grande Tetons
Grande Tetons's picture

Anybody else watching the 10 year over the last half hour? Interesting. 

Wed, 04/30/2014 - 11:08 | 4712096 paddy0761
paddy0761's picture

"Anybody else watching the 10 year over the last half hour? Interesting."

If that sucker prints with a 25 handle...run for the hills.

Wed, 04/30/2014 - 10:35 | 4711925 Unknown Poster
Unknown Poster's picture

Of course DB's 50 trillion euro derivative exposure to the likes of this are nothing to worry about.

Wed, 04/30/2014 - 10:36 | 4711933 swmnguy
swmnguy's picture

Well sure, if I were to max out my HELOC and all my credit cards' cash advances, I'd be rolling cash myself.  Actually, it was in 2003 that I had my moment of clarity regarding the impending collapse of our debt-based scheme.  I refinanced my little starter home, bought in 1996 for $49,500.  My credit union, normally quite cautious, appraised it at $135,000 and offered to refi me up to that level.  They suggested I take a vacation, or buy a boat or a new car.  I laughed and asked if I'd have to pay it back.  They didn't laugh and said, "Yes."  So I said, "Oh, well, I'll stick with what's left of the $49,500 then.  Thanks."  They acted like I was the stupidest guy they'd seen all day.  When I sold that house in 2009, I got $139,000, paid off every penny of debt remaining and put half down on a $200,000 house.

But yeah, those years in between I did not have $100,000 in cash on my balance sheet.  Nor a boat.  Which made the Unfortunate Boating Incident a little less convenient, but far from unmanageable.

Wed, 04/30/2014 - 10:37 | 4711937 LawsofPhysics
LawsofPhysics's picture

Please corporations get fucking bailouts, unfortunately people do not.

 

Anyone see the irony yet?

 

Roll the mother fucking guillotines, nothing changes otherwise.

Wed, 04/30/2014 - 10:38 | 4711943 Dr. Engali
Dr. Engali's picture

Hey corporations are people too. The supreme court said so.

Wed, 04/30/2014 - 10:49 | 4711982 cro_maat
cro_maat's picture

Right you are Doc. As a person in the U.S. when I commit a crime they lock me up. So now that corporations are people we can lock them up as well. I assume that the entire corporation (both here and abroad) is the peson so all of the entities should be locked up. Hell, let's start with all of the corporations who have committed murder over the last few decades and give them the death penalty. That should take care of the MIC, most fortune 500 companies, consulting firms, corporate shells, technology companies, ag businesses (think United Fruit / Chiquita, Dole, et al). Now do we do letlhal injection, gas or guillotines?

Wed, 04/30/2014 - 10:55 | 4712010 LawsofPhysics
LawsofPhysics's picture

I say guillotines.  At least then we could feed the "unwashed masses" a wicked blood pudding...

With 7+ billion mouths to feed, we need to be efficient about all this...

interesting times indeed...

Wed, 04/30/2014 - 11:12 | 4712118 forwardho
forwardho's picture

Rest assured that some sociopathic .gov creep is making plans to take care of those 7+ billion... In an efficient manner indeed.

Wed, 04/30/2014 - 13:49 | 4712839 walküre
walküre's picture

In a time where the courts regard a corporation as a person, it wouldn't surprise anyone. We've gone so far off the reservation just to amend their wicked beliefs into their abnormal reality, it's not even funny anymore. We're all suffering the consequences of their wickedness and I don't mean that in any religious context. There's straight and then there's everything else. They haven't been thinking straight for decades.

Wed, 04/30/2014 - 10:57 | 4712013 cro_maat
cro_maat's picture

Come to think of it I think it would be poetic if we used the products of each company for the execution methodology. Monsanto executives have to overdose on Roundup. Exxon executives will drown in Texas lite and sweet. Chiquita executives will have bananas stuffed in every orifice. I am sure we can make a game show out of it with the top Twitter suggestion guiding the action.

Wed, 04/30/2014 - 11:40 | 4712247 Boxed Merlot
Boxed Merlot's picture

poetic if we used the products of each company for the execution...

 

Your suggestion is not the first time such a "solution" has been offered.  The Anabaptists remind me of "native" Ukranians of today.  (If there is such a thing.)

 

Anabaptist:  "A movement that repudiated ecclesiastical control of individuals through infant baptism and sacramentalism, and strived to attain radical discipleship to Christ by separation from worldly enticements. ANA (Greek, “again”) + Baptists made a public statement through the act of rebaptizing - theological (to believers) and political (to authorities). Their illegal rebaptisms were perceived by the government, in a similar manner to draft card burning in the turbulent 1960s. Anabaptists were routinely hunted by Täufenjager (baptist hunters) and executed through drownings (mockingly called the third baptism) and as human torches. Few of the original leaders escaped martyrdom."...

"The dual hand of church and state released its severest form of tyranny on the Anabaptists. The Rhine Valley during the mid 1500's witnessed nightly torches of burning saints. They were mocked and scorned by angry crowds as they were led to their executions. It is ironic that the very entity that suffered the initial pain of affliction in the Roman arena now became the Afflicter. Doubly ironic is that many of the Reformers who enjoyed their newly gained freedom from the Roman Catholic Church, likewise chose to be the new Afflicters. The wanton slaughter of Anabaptists was severe, vitriolic, and offered as entertainment in some locations; but still they grew in number, and became even more resolute in their convictions and activities. European nobility pronounced death to all Anabaptists at the Diet of Speyer in 1529, and within a few years most of the original leaders met with violent deaths, but still the movement grew and increased in strength. Täufenjager (baptist hunters) were special groups that systematically and persistently tracked and arrested these intractable saints. History has witnessed few movements whose participants were as inveterate as those of Anabaptism."

---http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDsQ...

 

just observing

Wed, 04/30/2014 - 11:49 | 4712309 Bangin7GramRocks
Bangin7GramRocks's picture

Off topic: Your comment reminds me of how much I want to smash Jack Welch's smug face with a brick!

Wed, 04/30/2014 - 15:30 | 4713396 lincolnsteffens
lincolnsteffens's picture

"Hey corporations are people too. The supreme court said so."

Correction Dr., corporations are persons. Most legal defs. of person exclude people. Its all fictional persons.

The problem is most people think they are persons and all the bull sh.t laws pertain to them. It is called brainwashing. Changing the meaning of words slowly to indoctrinate the sheeple into accepting unlawful concepts.

Under the US Constitution only people have unalienable rights, not corps. nor government. Government regulates commerce. Gov. can grant privileges to corporations. Elections are supposed to be conducted for the voice of the people to be heard, not corporations.  Its a racket, aka conspiracy, aka sedition by felony treason.

Just my novice opinion from examining law.

Wed, 04/30/2014 - 10:37 | 4711940 Shizzmoney
Shizzmoney's picture

At my old company, they get their cheap debt from JP Morgan.  They have been buying up companies on the cheap left and right during the QE4EVA credit card shopping spree.  Makes the balance sheet look strong!  

That is, until, interest rates rise.  Suddenly, the "M&A is the new R&D" and corporate buybacks don't look so good anymore.

Wed, 04/30/2014 - 10:43 | 4711962 LawsofPhysics
LawsofPhysics's picture

"That is, until, interest rates rise."-   Please, there is no market for true price discovery...

The oligarchs will kill all fiat before interests rates rise, this has been the plan for quite some time.

Wed, 04/30/2014 - 11:02 | 4712065 TrumpXVI
TrumpXVI's picture

It'll be a long time yet before interest rates rise.  The future will bring with it moar fear, and moar fear will bring moar flight to "safety".  In a sane market, confidence would be destroyed and rates would go up, but not in the insane world in which we find ourselves....rates will stay down for a good while yet.

Wed, 04/30/2014 - 15:08 | 4713306 Shizzmoney
Shizzmoney's picture

RE

It'll be a long time yet before interest rates rise.  The future will bring with it moar fear, and moar fear will bring moar flight to "safety".

Agreed.  The paralells to Japan are uncanny, right down to the wage deflation for workers (despite asset, real estate, and food inflation).

This might go another 10+ years.  Especially if we go to war.

Wed, 04/30/2014 - 10:39 | 4711946 Bernoulli
Bernoulli's picture

And rates could rise much faster than Mr. Yellen would want them to. Everybody keeps staring at his mouth when he talks (eeehm... maybe.... eeehhhm.... 6 months after 2015 bla bla bla)

But what if nobody WANTS to buy treasuries anymore? The rates will spike. Just because it didn't happen to the US before doesn't mean it wont happen.

Just check out Eurozone periphery bonds 2010 and 2011, Mr. Yellen: Do you think your buddy Draghi did that on purpose?

 

Wed, 04/30/2014 - 10:42 | 4711959 jstrack
jstrack's picture

Where is the fuel for when the economy some day wants to take off...  Its constrained by high debt loads due to the FED keeping interest rates way too low for too long.  If rates were up at 4 to 6% then corporations would not be borrowing as much and would have plenty of cash on hand.  Also, money would be directed toward only productive uses and banks and other financial investors would put money to use on the domestic economy rather then try and make money on arbitrage plays and funding international banks and such...  Low interest rates should only be used for a brief time...year or two at most...after the purge of a recession so as not be "push on a string"...  Its the direction of rates that matters and that bit of stimulus can only last so long...   

Wed, 04/30/2014 - 10:44 | 4711967 FieldingMellish
FieldingMellish's picture

Rates are not going much higher for a long, long time. The markets are not rigged. All hail, Mr. Yellen.

Wed, 04/30/2014 - 10:49 | 4711983 Ban KKiller
Ban KKiller's picture

I keep sending out the nail guns and shitgums...need updated banker death report.

Its early but...time for a bong hit.

Wed, 04/30/2014 - 10:52 | 4711995 Yen Cross
Yen Cross's picture

   WTF?  "As long as rates are low and keep declining, this record debt hoard is not a big issue". Keep declining to where? Rates are already at rock bottom prices.

Wed, 04/30/2014 - 13:50 | 4712852 walküre
walküre's picture

+1

Someone actually disagrees with you and thinks rates could go lower? Wow.

Wed, 04/30/2014 - 10:52 | 4711998 Last of the Mid...
Last of the Middle Class's picture

Record corporate cash means we printed trillions and pumped it into the stockmarket so they could all initiate stock buy-backs to prop up their balance sheet and show profit and growth for the last 3 years. The rest went into major stockholders pockets, surprise, suprise. I'll say it again. They printed tons of money and did nothing, now we're broke 5 years later with the same economic problems, NOTHING has been fixed.

Wed, 04/30/2014 - 11:55 | 4712338 Bangin7GramRocks
Bangin7GramRocks's picture

Exactly why stock buybacks are an incredible sham. Unless you sell the next day, the "giving profits back to investors" mantra is bullshit. When the market takes its inevitable messy wet shit, all of those "profits" will instantly disappear.

Wed, 04/30/2014 - 10:52 | 4711999 alexdg
alexdg's picture

IBM will be bought for pennies! Probably by Oracle...

Wed, 04/30/2014 - 10:52 | 4712002 1stepcloser
1stepcloser's picture

Screw the charts. Give us some hot female anchors we'd like to bang....NILFs  News I'd Like to Fuck

Wed, 04/30/2014 - 10:54 | 4712006 rsnoble
rsnoble's picture

Need to get the WW3 eraser out.  Of course the peons will be getting hand-delivered mortgage and credit card bills.

Wed, 04/30/2014 - 11:02 | 4712060 Spungo
Spungo's picture

I look forward to the rising interest rates. If a broken window helps the economy, think of how much a broken economy will help the economy!

Wed, 04/30/2014 - 11:12 | 4712115 wagthetails
wagthetails's picture

CNBC still does financial news? i thought they just did infomercials for such revolutionary products like the Shake Weight. 

Wed, 04/30/2014 - 11:29 | 4712195 TalkToLind
TalkToLind's picture

If you're rich, they have hot escorts for your private plane rides.  There are federal reserve groupies there too. 

Wed, 04/30/2014 - 11:22 | 4712173 tahoebumsmith
tahoebumsmith's picture

Looks like every other ponzi scheme chart to me. This chart should be labled, ZIRP induced Euphoria Chart...It's no wonder their having sunshine meetings?

Wed, 04/30/2014 - 11:25 | 4712185 rodgerleanne
rodgerleanne's picture

I wonder if:  Say a company has $10 billion of earnings stashed in Europe and they don't want to bring it into the US becasue of the high tax bill.  So, they borrow $10 billion in the US at very low interest rates.  Then they service the debt with the $10 billion in stashed earnings in Europe which debt payments offset earnings in the US thus reducing their stateside tax bill.  Voila tout!  They have essentially gotten their $10 billion into the US without paying the confiscatory tax! 

If this analysis is wrong, pease let me know.

Wed, 04/30/2014 - 11:28 | 4712189 auntiesocial
auntiesocial's picture

then these arseholes use every legal and tax advantage as well as going offshore that they can... rape and pillage! the American Way!

 

these are the job creators mind you! 

 

JOBS:

wash my yacht

servant

landscaper

Wed, 04/30/2014 - 11:27 | 4712192 BeetleBailey
BeetleBailey's picture

Why else, the KABILLION CAYMAN ISLANDS ACCOUNTS UNDER A VAGUE NAME....

....and elsewhere.....

Wed, 04/30/2014 - 11:32 | 4712213 evernewecon
evernewecon's picture

 

 

 

 

 

 

In view of the liquidity trap and

monetary and fiscal largesse all

at the expense of the middle class

this is perfectly logical.

 

 

Mr. Spock would say this:

 

There are two possibilities.

 

 

Our "leaders" have turned logic

upside down. 

 

 

Our "leaders" are really "raiders"

not serving the public purpose.

 

 

In A Nutshell, All This Is About

Going From A Nation In Debt

Or Prison To One That's 

Either Not In Debt Or Else

Uses Its Debt To Worthwhile

Ends, And Enables People,

Instead Of Imprisoning Them.

 

 

Wed, 04/30/2014 - 11:36 | 4712232 Save_America1st
Save_America1st's picture

yeah, but they don't ever plan on paying their debts...it'll all be shoved onto the public side of the fence for generation and generation to slave away at. 

And in the short term:  Bail-Ins, bitchez...

Get outta the banking and credit system and go Gault.

Ag is on sale, YET AGAIN, today!  I know I'll be adding to the stack.

 

Wed, 04/30/2014 - 11:36 | 4712233 Incubus
Incubus's picture

MAD FUCKING MAX / BOOK OF FUCKING ELI

 

take your pick

 

I personally'd do with Mila Kunis

Wed, 04/30/2014 - 12:44 | 4712570 The Most Intere...
The Most Interesting Frog in the World's picture

Mila Kunis for Fed Chair!

Wed, 04/30/2014 - 16:20 | 4713565 hesk
hesk's picture

Yikes, looks like a girl in my art history class

Wed, 04/30/2014 - 11:37 | 4712241 NOTaREALmerican
NOTaREALmerican's picture

And people say you can't borrow your way to prosperity....

Wed, 04/30/2014 - 11:40 | 4712261 Incubus
Incubus's picture

Frankly, my boy, it's all play-pretend.

 

If you're at the top, it'd be wise to loosen the leash if you value your head.  It's common sense. 

 

Debt forgiveness is inevitable, or face social upheaval.  Never violate a man's sense of sufficiency lest you want to get bitten.

Wed, 04/30/2014 - 14:12 | 4712968 Seer
Seer's picture

"Debt forgiveness is inevitable, or face social upheaval."

And there it is!

The System ends up breaking regardless.  There's no more blood, er, oil, in the rock.  The grow-or-die system's options are pretty clear at this point.

Wed, 04/30/2014 - 11:44 | 4712287 Never_Put_Down
Never_Put_Down's picture

In a land of debt and leverage, asset values including real estate, Corporate stocks and bonds are only as valuable as the interest rate that supports it.

Wed, 04/30/2014 - 11:46 | 4712293 CHX
CHX's picture

oh those ratios always just distort reality /sarc

Wed, 04/30/2014 - 11:50 | 4712311 LooseLee
LooseLee's picture

Even a dumb 'True American Capitalist' like me knew this years ago. Doesn't take much investigating. Still, Card-carrying PINKO COMMIES (e.g. MSM, Corp. Lobbyists, Politicians, and Bankers, et. al.) are desperate to get things going. Sadly, their corrupt system is coming to an end and there are very few people who buy into the bullshit (with the exception of equity bulltards and those who benefit from the maintenance of the 'Status Quo').

Wed, 04/30/2014 - 11:53 | 4712325 Seer
Seer's picture

Hurling around lables doesn't do anything but distract.  Don't care what "perfect" system you wish to run things, as long as it's requiring growth to work it's going to fail (growth is dead, that's the message- has to do with the premise of growth not what ideology is behind that premise [the premise itself is flawed]).

Wed, 04/30/2014 - 12:11 | 4712420 headhunt
headhunt's picture

The premise is their ideology - in this case communism is not really hurling labels.

Wed, 04/30/2014 - 12:29 | 4712502 Seer
Seer's picture

Sure it is.  HIstory states that ideology has little to do with the collapse of empires.  Read: http://www.rexresearch.com/glubb/glubb-empire.pdf

I've spent enough years on this planet to have gotten the point that TPTB could give a shit what ideology is used as long as THEY have the power.  The "ideloogical" shit is part of their divide and conquer game...  Helps pad military budgets: "get those commies"- never mind that BAD SYSTEMS FAIL and that as a bad system communism could NEVER "take over the world."

Sometimes history and logic is lost on people...

 

Wed, 04/30/2014 - 12:58 | 4712649 LooseLee
LooseLee's picture

People are as people 'do'. Be a man of non-action...

Wed, 04/30/2014 - 14:28 | 4713063 Seer
Seer's picture

Huh?

You see, it's the great trick by the Statists, to get you to react.  Most will knee-jerk and leap at something; TPTB know this.

The chief cause of problems is solutions.?

- Eric Sevareid

And sometimes people aren't as smart as they think they are.  Human hubris...

Wed, 04/30/2014 - 14:53 | 4713237 headhunt
headhunt's picture

For those who really have no ideology you are correct - I think they are called 'psychopaths.'

Most, including the elitist wankers, do have some form of ideology that they follow - all the way over the cliff.

Wed, 04/30/2014 - 12:57 | 4712641 LooseLee
LooseLee's picture

A 'perfect' system is 'non systematic'. It is self-sustaining and requires no 'growth'...Like the sound of one hand clapping. Get it?

Wed, 04/30/2014 - 17:28 | 4713836 Seer
Seer's picture

I could not tell you what "sustainable" is.  But, for sure I can state where "growth" leads.

Wed, 04/30/2014 - 14:52 | 4713232 LooseLee
LooseLee's picture

Agreed that labels do little but identify something. I am merely pointing out the 'enemy'....

Wed, 04/30/2014 - 11:51 | 4712315 Seer
Seer's picture

Well then, it should be pretty clear that the "it's on the sidelines" folks have been correct all along! </sarc>

The digits are rapidly filling the bottomless-pit holes in banks' balance sheets.

This is past "circus" and is now clearly a "VIRTUAL circus" (we don't even have the real thing anymore).

Wed, 04/30/2014 - 11:51 | 4712318 q99x2
q99x2's picture

They can borrow to pay off all their debt.

Wed, 04/30/2014 - 12:41 | 4712557 Seer
Seer's picture

And for each dollar borrowed that "creates" NINE more.  How could we ever be out of money? WINNING! </sarc>

Wed, 04/30/2014 - 12:11 | 4712421 headhunt
headhunt's picture

Lucy - I'm home!

Wed, 04/30/2014 - 12:14 | 4712434 Return of 20-20
Return of 20-20's picture

Actually in some ways this is good new.  Rates will eventually rise and bond prices will tank so that the effective rate stays competitive.  This would allow issuing companies to by the debt back for less than they issued it for.  If rates really soared you could see heavy discounts.  So if a business is healthy, like say Apple, they could retire their $17B offering for considerably less.

Wed, 04/30/2014 - 12:47 | 4712583 Seer
Seer's picture

This is not your grandfather's cycle...

"So if a business is healthy, like say Apple, they could retire their $17B offering for considerably less."

Perhaps.  But consider that their sales will likely have collapsed due to the fact that consumers will be hammered by those rising interest rates (less disposible income).

Wed, 04/30/2014 - 12:16 | 4712440 CuriousPasserby
CuriousPasserby's picture

I hate when graphs don't start at zero at the bottom.

Wed, 04/30/2014 - 12:21 | 4712465 novictim
novictim's picture

Yep.  Zero gives you relative proportions.  

Thu, 05/01/2014 - 19:41 | 4718169 MeelionDollerBogus
MeelionDollerBogus's picture

You must really, really hate log-scale graphs, then.
Probably explains why so many don't understand log-scale, using equal % changes for each unit distance, and why my scatterplots get so many -1's because they are all A vs B with both in log-scale, so no zero value can ever be there.
http://flic.kr/p/f5bHkJ

Fri, 05/02/2014 - 00:53 | 4718918 Miffed Microbio...
Miffed Microbiologist's picture

Very pretty! ;-)

Miffed;-)

Wed, 04/30/2014 - 12:19 | 4712455 novictim
novictim's picture

Zero Hedge!  I know this will NOT be popular.  But try to get past you knee jerk reaction.  Give this some thought!

 

Fed ZIRP/TARP/QE policy has put 1-3 $TRILLION into corporate and financial coffers.  Low pay to US workers and foreign workers has put some 6-9 $Trillion additional money into the international banking coffers.

Now, this money is NOT earned!  It certainly does not represent MERIT pay.  It is only the perversity of the manipulated and rigged international financial system and trade deals that have resulted in these MASSIVE wealth accumulations.

So how do we EFFICIENTLY drain this swamp?  How do pry this wealth away from these global thieves and oligarchs and fight against all their underhanded and clever tricks?

INFLATION.  INFLATION.  INFLATION.  

Inflation is the best means to offset the inequities we see here.  And yes, it hurts the little guy too.  But it is the only way.  

I know!  Let the down arrows commence!

Wed, 04/30/2014 - 12:43 | 4712566 The Most Intere...
The Most Interesting Frog in the World's picture

When push comes to shove I think you are correct.  At some point, governments will grab bankers by the balls, hang em upside down and extract what they need from their pockets (through inflation or otherwise, at gun point, you name it)...  

Currently we are in the "fattening the pigs prior to slaughter" phase...

Wed, 04/30/2014 - 13:07 | 4712684 Blood Spattered...
Blood Spattered Banner's picture

This is not possible.  In fascist countries (like the US), the banks ARE the government.  They go down, we all go down.  Back in 2008 they held our 401k's hostage in lieu of TARP, and we buckled like the nation of pansies we are.  Until Americans are ready to sacrifice their retirement and their lives for a better future for our kids, nothing will change.  Are you seriously holding out hope for government intervention?  If so, there is a website for you:  www.huffpost.com.

 

 

Wed, 04/30/2014 - 14:13 | 4712982 Jack4952
Jack4952's picture

The bankers ARE the government !!!

 

Wed, 04/30/2014 - 15:46 | 4713462 novictim
novictim's picture

Yes.  

Understand!  The correction is not an OPTION, it is the INEVITABLE.

Correction must occur and it will either be by INFLATION, CONFISCATION, TAXATION or REVOLUTION.

Wed, 04/30/2014 - 12:49 | 4712593 Seer
Seer's picture

It's not a secret that the wealthy do NOT want deflation, inflation is their chosen means.

Wed, 04/30/2014 - 15:43 | 4713451 novictim
novictim's picture

Are you saying that those who hold the lions share of financial wealth WANT inflation?  

If so, you need to think this through.  

If you had a $trillion dollars yourself in the bank and financial institutions, would YOU then want an inflation rate of 10-15% taking away 10-15% of your Trillion dollars wealth year by year?  NO, you would not.

That is why inflation is the needed cure.

Wed, 04/30/2014 - 17:25 | 4713826 Seer
Seer's picture

Not sure which way you're leaning on this, so I'll just toss out more of my "observations" (using your response as taking points).

"Are you saying that those who hold the lions share of financial wealth WANT inflation?"

I'm not guessing.  I'm reciting history.

Most "wealthy" have assets, and deflation removes the value of those assets.  Consider that the CBs (esp Fed) have been doing all they can to keep real estate prices up (which is inflation)- if they allowed them to drop then their books would wipte out a shit load of value.

"If you had a $trillion dollars yourself in the bank and financial institutions, would YOU then want an inflation rate of 10-15% taking away 10-15% of your Trillion dollars wealth year by year?  NO, you would not."

Yes, why would I have that much in the bank?  Again, the "wealthy" became wealthy not by "saving" but by prudently investing in wealth-generating assets.

"Inflation" is the ability to dispatch a big number with one that's made bigger.  Of course, it does nothing to rectify the underlying economic problems, but it does make the books look better!

Thu, 05/01/2014 - 19:33 | 4718150 MeelionDollerBogus
MeelionDollerBogus's picture

Don't be silly: they get those trillions from freshly printed dollars.
They acquire for nothing. Inflation does them the least harm and starves the masses, putting them to death or into debt to those with trillions.

Wed, 04/30/2014 - 14:13 | 4712976 Jack4952
Jack4952's picture

How about DEBT FORGIVENESS (private individual debt only) along the lines of that proposed by economist Steve Keen? Simple version: issue (let's say) $500,000 to EACH individual American citizen, regardless of need or debt. Those who have any debt MUST pay off that debt immediately, then they keep the balance. If you have NO debt, you keep the entire $500,000 tax-free. (Also, accompany it with a statute declaring that NO home (primary residednce) may ever be seized for lack of payments or taxes - only a LIEN may be attached, with NO levy until the owner dies.) Then re-enact Glass-Steagall AND outlaw any U.S. central bank.

Of course this will cause MASSIVE devaluation of the dollar, but what other option is there?

 

Wed, 04/30/2014 - 14:35 | 4713118 Seer
Seer's picture

Someone else made the statement that it's pretty much the only course, debt foregiveness/debt jubilee.  I agree 100% that this will be the outcome.

A "problem" trying to manage all of this in some sensical way is that the result, not matter what decisions we apply, is NOT going to end up looking anything resembling sensible, not as we have heretofore understood "sensible" to be.  There will be no resurection of the system; therefore, basing decisions ON the system, using its metrics and mechanisms, will only be a practice in futility (and likely give the reigning powers a little more life).

Wed, 04/30/2014 - 19:12 | 4714146 A Dollar Short
A Dollar Short's picture

Debt forgiveness may work but it MUST be universal.  You have a mortgage of any size on an American primary residence, other than private loans, cut 30% right off the top and re-amortize all the loans.  It would probably take a revolution and elimination of the Fed to make that happen.  

Wed, 04/30/2014 - 12:21 | 4712468 Rising Sun
Rising Sun's picture

Book 'em Danno!!!

Wed, 04/30/2014 - 12:24 | 4712482 Watson
Watson's picture

Does anyone have a link to a similar graph going back more than fifteen years?

I, for one, would be interested.

Watson.

Wed, 04/30/2014 - 12:30 | 4712503 Helvidius
Helvidius's picture

What are those two brown lines on the graph?  Skidmarks?

Wed, 04/30/2014 - 12:55 | 4712627 steveo77
steveo77's picture

Carrington Event. NASA video explains how we were 2 days away from a world wide emergency that would have 100 nuclear plants melting down….in 2012. They say the one 2 years ago could have been even bigger than the Carrington Event. Fortunately it missed the earth but nailed Stereo A sun observer satellite

Nuke Pro has been promoting the idea that we have to harden our electrical grid, or risk the annihilation of the human species. Yes, it really is that bad. And get rid of nuke.

http://nukeprofessional.blogspot.com/2014/04/nasa-explains-how-we-missed-100-nuke.html

Wed, 04/30/2014 - 14:38 | 4713146 Seer
Seer's picture

The END is never a good outcome for life.  Eventually the earth's cycles will plow us all under- little that can be done about that.

We can think in terms of the imortal, but our ability is and always be mortal.  This divide provides quit an entrance point for human hubris...

Wed, 04/30/2014 - 13:07 | 4712685 Colonel Klink
Colonel Klink's picture

MOAR LIES from the MSM.

Wed, 04/30/2014 - 13:10 | 4712697 RichardENixon
RichardENixon's picture

I have a vague recollection of someone once telling me that Assets minus Liabilities=Equity, if that's any help.

Wed, 04/30/2014 - 13:30 | 4712783 mt paul
mt paul's picture

that chart looks like Mt Everest

 

sad about them sherpas

some great hearts died

doing what they do ..

Wed, 04/30/2014 - 14:57 | 4713227 Chuck Knoblauch
Chuck Knoblauch's picture

Parked overseas, tax free.

Perhaps in a PHC in the Netherlands?

APB 23.

Hey ZH, why don't you post a story on APB 23?

It may require some reading and intelligence, but you might pull it off.

google it, idiots.

 

Wed, 04/30/2014 - 14:53 | 4713241 kw2012
kw2012's picture

Janet Cheer Yellin. 

 

I wonder what Q2 excuse will be? 

 

Good thing they stopped with the 1929 chart comparsion

Wed, 04/30/2014 - 15:12 | 4713286 Itchy and Scratchy
Itchy and Scratchy's picture

'Those corporations never built that debt!' - The Kenyan

Wed, 04/30/2014 - 17:18 | 4713791 Seer
Seer's picture

Fucking childish Party Pussy shit.  Gets old...

Wed, 04/30/2014 - 18:09 | 4713954 Itchy and Scratchy
Wed, 04/30/2014 - 18:54 | 4714106 Bear
Bear's picture

You are right and wrong ... the Parties are identical when they get to DC. Bush taped Bernake, Obama Yellen ... can it get worse for the nation than that? GOP spends money on WarCrap, Dems spend money on everything else, and with the way the world is headed, I vote for WarCrap over Welfare

Thu, 05/01/2014 - 19:24 | 4718124 MeelionDollerBogus
MeelionDollerBogus's picture

oh ho hoe-ing, it is 'american' to spend on much war-ring!

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