Things Will End In Chaos: We Are Heading For A Financial Apocalypse, Insiders Now Betting On A Market Decline While Investors Keep Cashing Out
October 10th, 2012
What you need to know about the record-breaking cash hoards of U.S. corporations
“Are businesses quietly preparing for a financial apocalypse?”
From Dan Steinhart, Casey Research:
U.S. corporations are sitting on more cash than at any point since World War 2.
That’s without including banks. I’m only talking about nonfinancial corporations – the ones that sell goods and services and make the economy go.
Those businesses hold $1.4 trillion. In absolute terms, that’s the most ever. In relative terms, it’s the most since World War II.
As investors, we can infer quite a bit from corporations’ inability (or unwillingness) to deploy their cash.
For one, it indicates that business have assumed a very defensive stance.
Cash, of course, is a buffer against uncertainty – the uncertainty that business may slow for any reason. Management wants a healthy cash reserve with which to pay the bills and remain liquid should anything unexpected happen. I think we can all agree that this is prudent, and a good business practice.
But $1.4 trillion? That tells me that businesses are not just a little jittery about the future. They’re prepared for an apocalypse…
Insiders betting on a market decline