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Re:Is your company saving cash? (1 viewing) (1) Guest

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TOPIC: Re:Is your company saving cash?
#1325
Re:Is your company saving cash? 5 Years ago Karma: 0  
Companies must also be looking ahead to gauge how tightfisted the US consumer is going to become. We've already gotten some signs that the recovery will not be US-led this time around. Maybe the new paradigm will be solidified as: save at home, invest (capex) abroad?
 
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#1366
mward ()
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Re:Is your company saving cash? 5 Years ago Karma: 0  
With historically low interest rates, now is a great time for companies to return cash to shareholders. Obviously there's a fiduciary duty to other stakeholders, e.g. bondholders and employees, so don't dump cash and reduce the cash position to dangerous levels, but this is a great opportunity to take either retire some higher interest rate debt or make investments by issuing new bonds. In five years, the federal deficit is going to make interest rates balloon (who remembers the mid-80's?) and having some long term debt on your books that you issued today is going to make your WACC whack!
 
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#1377
Re:Is your company saving cash? 5 Years ago Karma: 0  
Judging from Ron's blog last week, http://www.cfozone.com/index.php/Newsflash/Why-re-opening-the-credit-markets-isn-t-enough.html, some companies are doing this. What do you think, MWard, about Stiglitz calling for a second stimulus?
 
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#1379
mward ()
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Re:Is your company saving cash? 5 Years ago Karma: 0  
We're headed for much higher interest rates, no doubt. The 50-year average mortgage rate is about 10% - when was the last time we saw that? We're due; cash is a bad bet. Taking on long-term debt is darn good strategy.

The Stimulus is a whole different issue. "Too big to fail" is a myth; the only significant business that failed? I don't quite recall who that was (anyone? anyone? Bueller?), but I sure do remember Barclay's swooping in to clean up the scraps of the carcass. The bailouts and first stim were a huge mistake. This economy was due to take a lot of lumps and we could have taken them all in 18 months, but we chose to mortgage our economy for the next 20 years. That said, now that we're stuck with the first stim, take off the blinders and start planning the second and this time spend it frivolously. Lots is going to get wasted, but most of the waste stays in the economy anyway. Some congressman cools $90k in the freezer, and a year later he's walking into the bursar's office at Tulane to pay his kid's tuition. Waste and graft are subject to the multiplier effect, too.

The only thing that we've learned from Santayana is that Americans don't read Santayana. Back in the middle of the Great Depression, Roosevelt gave in to pressure to reign in spending and what happened? The Depression got worse again because they didn't keep their foot on the gas. Once you're on the water, you've got to paddle through the waves or your going to get swamped.
 
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#1413
Re:Is your company saving cash? 5 Years ago Karma: 0  
Apple is the new cash hoarder to watch, the WSJ points out today. $31.1 billion in cash and no debt. Whatever they decide to do with it will be front page news, for sure.
 
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#1417
Re:Is your company saving cash? 5 Years ago Karma: 0  
Hoarding cash is certainly the trend. The Association for Financial Professionals' 2009 Liquidity Survey shows that almost 75% of companies had increased or maintained their U.S. cash balances during the first part of 2009. Companies are clearly stockpiling and positioning themselves to be the first out of the gate when the economy recovers.
 
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