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Mward,I agree companies shouldn't sit on cash but I find it interesting that there's this old debate around who should get that cash. Shareholders vs. bondholders. It's always nice to see leverage go down, but returning cash to shareholders whether it's through dividends or share buybacks also strengthens a company.

Maybe companies will finally put the cash where it matters most -- back into their own businesses.

According to Dean Maki at Barclays Capital, companies have cut back too much, and we should be seeing a return to business investment soon.

The head of US economics research at the firm wrote this week:

"Once firms get the sense that the recovery will last, we believe the investment cutbacks that looked prudent when sales were plummeting will start to look excessive. In this sense, we think that corporate sector spending overshot to the downside in response to overly pessimistic projections. This is the usual behavior of corporations during and after deep recessions, and given that we have seen the greatest declines in business investment spending in the post-war era, we expect the usual snapback in the months ahead."

Then again, may companies think they have reason to be especially cautious after this "Great Recession"?

Companies have yet to show any signs of major spending or hiring and consumers are saving money at record levels. Trouble is, no one is completely convinced that the recession is receding, that recovery is around the corner. Unfortunately, that unbelief becomes some a self-fulfilling prophecy -- You think things won't get better and your behavior helps ensure that they won't.

It's all about jobs right now as Ron Fink pointed out again today.

Pimco's CEO is saying “Today’s unemployment rate is much more than a lagging indicator. It is also a signal of future pressures on consumption, housing and the country’s social safety net.”

The economy can't expand --and in turn, employers won't hire-- until consumers consume and they won't do so until they feel like the economy is recovering. I'm not sure what the psychological trigger will be.

I disagree and I think that companies have started spending, just look at the recent M&A activity (and read the thread on the M&A surge in deals). Obviously, only the most financially sound companies have started doing so and with caution. So when it comes to unemployment, it may get worse before it gets better. But it doesn't mean that the economy isn't on the path to recovery.

I guess attendees at the AFP conference this year aren't as sanguine, Marine.

According to a survey they did a few days ago, only 11% think the U.S. economy is out of the recession, and 69% think the recession will continue well into 2010.