What’ll we do with all this cash?

US corporations are drowning in a sea of cash. Well, maybe not drowning, maybe a little bit closer to wading; either way, nonfinancial companies in the US hold roughly 2 Billion dollars in cash and other liquid assets on their balance sheets, the largest balance share since 1959.

What’s a wealthy corporation to do? Until now corporations were digging deep into their trenches, scared of a double dip recession, or new laws from Washington that would result in a loss of profits.

Now, with a business friendly congress and the possibility of a double dip shrinking away in the rear-view mirror, companies are going to start looking to deploy cash.

How will they do that you ask?

Cash rich companies like Cisco will start paying a dividend this summer, mergers & acquisition news has escalated from whispers to bona-fide rumors. Companies are starting more aggressive stock buyback programs, and *gasp* hiring new employees.

This increase in cash was one of the main drivers of stock market speculation this December, and will likely be a key driver of economic growth in 2011. Whether you are a shareholder, employee, or unemployed, cash rich American companies are good for everyone.



Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: