Posted on 11/03/2009 6:32:03 AM PST by blam
Major Companies Hoarding Cash, Preparing for Second Wave of Financial Crisis
By Rocky Vega
11/02/09 Stockholm, Sweden – If you’re looking for insight into how you should be responding to the “recovery” in the US economy, there’s actually a glimmer of sanity coming leading US companies. Right now major American companies are storing up more cash than at any other time within the past 40 years.
According to media reports, Citigroup and JPMorgan Chase among others are saving “as if another financial crisis were on the way.” Even the vice president of equity research at Rochdale Securities Dick Bove said, in reference to Citigroup, “In my 44 years in the business, I have never seen a company with remotely as much cash as this.”
Outside of the abovementioned banks, other firms saving up for a rainy day include Bank of America, Wells Fargo, and about 500 of the largest nonfinancial US firms. They are all in the process of increasing assets and short-term investments. So, if you’re wondering whether it’s better to be a spender or a saver right now, at least these firms seem to have made up their minds.
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(Excerpt) Read more at dailyreckoning.com ...
No investor will put his capital into anything until the fear that such an investment can be made worthless at the stroke of a pen has passed.
I just moved my 401K funds to bonds (40%) and fixed return funds (40%). Kept a little in a EuroPacific stock fund (20%).
I took a beating on the first drop earlier this year, but recovered most of it. I won’t be fooled again.
Smart move. I avoided the last downturn by doing the same thing. I’m currently all cash.
Major companies and smart citizens are hoarding cash because we have an administration that has promised to raise taxes, “electricity rates will necessarily skyrocket”, and intentionally wrecked the banking, auto, homebuilding industries and has their sights set on the medical industry. Even animals know to hunker down when a storm is coming.
>> Smart move. I avoided the last downturn by doing the same thing. I’m currently all cash.
I’m pretty much all cash too. And quite concerned (and confused) about what to do with it, as regards both safety and yield.
Even though it *appears* that we’re headed for major inflation, there doesn’t seem to be any asset class worth investing in. And the depth of the deflation chasm, if any, that will be crossed BEFORE we get to inflation is unknown.
It’s interesting to note that a lot of smart people with really big dough to invest are hoarding cash. (Not just banks, but tech companies too; I trust them more than I trust BofA et al.)
Likewise, a lot of people still put a lot of dough into near-term Treasuries.
The whole climate is confusing and convoluted. Whatever position you personally believe in, you can find “renowned economists” who agree with you.
ping for later
Rural land, grow your own food, make as much yourself as you can, has always been a great ‘yield’ though of course hard work.
Isn't it a little strange that the (urban) wife of a (urban) community organizer is championed for growing a garden. There's a message there, don't you think?
Check my tagline.
I'm acquiring gold and silver as well as useful items like tools and guns. At least they are actually worth something. Maybe it sounds crazy, but if there are no trustworthy investments and inflation destroys the worth of currency, what's left?
I am selling about $2 million in worthless commerical paper to my neighbors. then I will make a huge bet against that paper using 20-to-1 leverage. When it all goes bust I will buy them all out of their foreclosed homes, and use the rest of the profits to pay off my local Rep. and both Senators, and pass a little over to the DNC for good measure. And I will skate.
>> I’m accumulating stuff...Maybe it sounds crazy, but if there are no trustworthy investments and inflation destroys the worth of currency, what’s left?
We’re doing some of that also. Not going hog wild, mind you, but “opening the faucet” a little.
Particularly business-related things (a.k.a. “the means of production”). If I see a work-related toy I really want, I just buy it.
I really need to get off my butt and buy some more guns. I’m not a “gun nut” — only have one right now — but I sure see the need, and the value. Just too busy, and in this day and time that’s a GOOD thing.
crisis will stem from the political vacuum caused by the collapse of the Obama Administration
Barry is taking the US down the global rat hole. His work is being accomplished and will be completed before his term is up.
The Republicans who are Conservative are outnumbered. The only roadblock to the GoreHusseinPelosi destruction of our Constitution is you and me.
Buy brass.
Sorry, buy lead.....
All cash in 401K also. Lucky enough, and I know it was luck, to get out at about Dow 13,800...
But I missed this second parabolic run up of 30%...and I’m fine with that.
I’m short with a chunk of my discretionary investment money.
I thought about shorting, but am afraid that the Treasury will pump cash into anything that tanks.
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