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"Record Corporate Cash And Profitability" Are Lies: Here Is The Truth
One of the best and easiest rules of thumb in recent years to determine just how clueless any one financial pundit is, was to ask them if US corporations have record cash. If they blindly recited the conventional wisdom, which is dead wrong, and said yes, US corporations are loaded to the gill with cash (even though we have repeatedly shown that this is simply incorrect in "Corporations Have Record Cash: They Also Have Record-er Debt" and "Here's A Chart You Won't See On CNBC") one could henceforth ignore their hot air.
It was truly a great filter for so much of the financial noise out there.
However, since the number of people who still believe this lie has soared in recent months, it is our duty to conduct a public service announcement to show the truth.
Here it is, from Credit Suisse:
- Cash levels have slipped relative to assets, while free cash flow yields are nearly back to 2007 lows.
- Corporate cash levels in the US are still high relative to history, but have been worked down in recent years.
Keep in mind this chart shows gross cash. What it doesn't show is that the bulk of the cash on the asset side is the direct result of incrementa debt, as we showed before:
... not due to organic cash flow. In fact, as the next chart shows, corporate cash flow yield across the entire US market is now at the lowest level in the 21st century.
Credit Suisse' conclusion:
- Overall, there appears to be less firepower to do M&A, buybacks, and increase
Which, among many other, is one further reason why the Fed simply can not hike rates: for an increasing number of companies the only source of cash is new, incremental debt. Because in a world in which there is little motivation to create cash flows organically when one can simply lever up (until one no longer can: see IBM and its stock buybacks), there are no cash flows, period.
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the stock market is so undervalued right now.. Buy Stock Bitches!!!!
I do think we'll see 2150 end of March, see here: www.tripstrading.com
Lies? cmon....who be lying? who lies? Back in the day of the Rockefellers and Carnegies and my Father...shit was done with a handshake...go figure... my, my how far we have come. And there in lies (pardon the pun) the challenge. No one trusts anyone. NO ONE is honorable
I was in small biz finance over the past decade. The amount of charlatans, crooks, con-men, UP FRONT FEES...ie. send me 1k and we can begin on your loan...omg...corzine, drink wine, feel fine, be mine...its a disaster...time for a building 7 take down
Please refute
So you dealt musicians too?
YES, so many viable businesses looking for capital that just got scammed for the "up front fee" only to get NOTHING..
No refute here, but I would not say that NO ONE is honorable any more. What I would say is, those FEW who are honorable have understood how few others are, and are now very hesitant to deal with anyone because the odds they are dealing with a scam artist are now much too high.
This is just one of several reasons the number of new small businesses has been FALLING. Nobody in their right mind would risk starting a new business when virtually everyone else is a flaming dishonest predator or parasite.
Been there and agree. The implication are staggering
This comes as Earth-shattering news!
The investor class cannot carry an economy alone.
Your squeezing the balls of everyone else.
There's no sperm or piss left.
Commieville, here we come.
The investor class is turning the US into a commie state.
And they don't see it?
LOL..................
Useful idiots selling the communists the rope by which they will hang the capitalists.
Sincerely,
The Redundant Department of Redundancy
Corporations can no longer create organic cash flows because most people no longer have money to buy their products. When all of a country's workers wages are spent on taxes, food, shelter, health care and transportation, there is no, and never will be any, organic grow in product sales. So any increases shown in corporate cash flow are the financial equivalent of a dog eating its own shit and declaring that itself well fed.
Well piss in my hat! There goes the Christmas bonus!
What ever the corps may or may not have, it is actually owned by the Zionist banksters that hold the fiat mortgage over it.
"Sure, we'll loan you a few $billion more to buy back more of your stock, and/or Enron your earnings report. No problem. Just sign here. I'll just need to prick your finger for the ink."
The banksters need to repay us.
Dead cat bounce? BDIY Chart - Baltic Dry Index - Bloomberg
The USDX needs to move 2-3% lower IMHO.
More like the putrefaction gases bloating the cat, than a bounce.
Don't forget Govt lies helping Corporate profits
UK Govt Allows Arms Sales Through Open Licenses to Russia and Others – CAEC Report
FEDGOV Pentagon operations will be adding to the cash-flow of certain U.S. domestic constabularies with Operation Jade Helm, using U.S. towns for training purposes. Matt Drudge displayed this link on March 20 2015. https://www.scribd.com/fullscreen/258605525?access_key=key-dS1ZhJJ4ZgCH6...
Mugabe/Zuma/Obama - Dumb/Black/Economy/Destroyers
I did not know George Bush was black.
Imagine a Quantative Easing specifically based on buying corporate debt if enough deflation hits that these corporations can't service their debt. I wonder if that would be enough of a wake up call for the public. The Fed debasing their currency to save our coporate masters..people would probably find a way to blame the public like they did for TARP.
"Creative bookkeeping", aka former "big eight" accounting firms. IT ALL STARTS WITH PHONEY ACCOUNTING.
2+2 DOES = whatever number you need to keep the investor fooled.
Can't beat them so join them in white collar crime, says every company! Not a crime unti they get caught and by then...too late sucker!
I feel like nailguns are the real answer. The Onion makes no sense in todays news.