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| Are US companies flush with cash? | |
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| Tweet Topic Started: Aug 3 2010, 09:43 AM (283 Views) | |
| 1hp | Aug 3 2010, 09:43 AM Post #1 |
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Fulla-Carp
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These guys say no. The biggest lie about US companies ...........................American companies are not in robust financial shape. Federal Reserve data show that their debts have been rising, not falling. By some measures, they are now more leveraged than at any time since the Great Depression. You'd think someone might have noticed something amiss. After all, we were simultaneously being told that companies (a) had more money than they know what to do with; (b) had even more money coming in due to a surge in profits; yet (c) they have been out in the bond market borrowing as fast as they can. Does that sound a little odd to you? A look at the facts shows that companies only have "record amounts of cash" in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don't look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?............ ![]() ..................Central bank and Commerce Department data reveal that gross domestic debts of nonfinancial corporations now amount to 50% of GDP. That's a postwar record. In 1945, it was just 20%. Even at the credit-bubble peaks in the late 1980s and 2005-06, it was only around 45%. The Fed data "underline the poor state of the U.S. private sector's balance sheets," reports financial analyst Andrew Smithers, who's also the author of "Wall Street Revalued: Imperfect Markets and Inept Central Bankers," and chairman of Smithers & Co. in London........................ Edited by 1hp, Aug 3 2010, 09:44 AM.
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| There are 10 kinds of people in this world, those that understand binary and................ | |
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| Axtremus | Aug 3 2010, 10:05 AM Post #2 |
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HOLY CARP!!!
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Interest rates are low; good time to borrow. |
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4:24 PM Jul 10