Blog Entries tagged 'capital expenditures' Blog Entries tagged 'capital expenditures' Fri, 31 Dec 2010 22:25:32 +0100 FeedCreator 1.7.2 Bonus depreciation no bonus, says one expert

While much of the focus of the pending tax cut package seems to be on the reductions and breaks for individuals, there are some goodies tucked in for corporations as well.

They include a two-year extension of the research and development credit, which covers employment costs of employees involved in research, and $22 billion for accelerated depreciation, which allows companies to write off all of their costs of assets placed in service after September 8, 2010 and through December [...] Mon, 13 Dec 2010 23:00:00 +0100 Tax depreciation Credit suisse Cash capital expenditures capital equipment outlays capex bonus depreciation Majority of mid-market CFOs say they are hiring

Chief financial officers of middle-market companies are generally upbeat about the economy and their hiring plans.

Nearly half (47 percent) of the CFOs who participated in GE Capital's quarterly survey said they expect the US economy to be stable while another 37 percent said it is "improving" over the near term. This suggests little chance for a double-dip recession in the months ahead, GE Capital asserts.

Their hiring plans seem even more encouraging.

[...] Wed, 17 Nov 2010 23:00:00 +0100 jobs General Electric GE Capital CFOs Cash Careers/Management capital expenditures
SMIDs prefer technology to employees

Small business owners prefer spending money on their company than on people.

According to a new biannual survey which gauges the mood and sentiment of small and medium sized business owners, nearly two-thirds (63 percent) plan to increase capital spending during the next six months. This is up sharply from 49 percent in the spring, according to the PNC Economic Outlook survey.

The business owners say technology equipment spending is their number one priority as they look t [...] Fri, 08 Oct 2010 23:00:00 +0100 jobs hiring Cash capital expenditures capex CFOs more pessimistic, cautious about spending

The Federal Reserve recently reported that nonfinancial companies had $1.84 trillion in cash and other liquid assets as of the end of March, up 26 percent from the prior year and the largest sum since 1952, when these kinds of records began to be kept.

So, various interest groups have been urging companies to spend this money-on dividends, buybacks, acquisitions, additional employees.

However, don't count on any of this happening soon. It seems that chief financial off [...] Thu, 29 Jul 2010 23:00:00 +0100 Financial Executives International FEI CFOs Cash Careers/Management capital expenditures Baruch College's Zicklin School of Business Why companies aren't spending

There's a political debate heating up about companies' hesitancy to invest the cash they're sitting on.

Essentially, the Democrats--or at least those in favor of further government stimulus measures such as a jobs program or at least extended unemployment benefits--argue that companies are wary of spending because of the lack of aggregate consumer demand.

The GOP--or those in the party who oppose stimulus in favor of austerity or at least tax cuts--prefer to explain th [...] Wed, 07 Jul 2010 23:00:00 +0100 recovery recession Obama Administration Obama jobs joblessness employment economy earnings demand cash position cash management Cash capital expenditures capex Companies sitting on still more cash

A survey released today by the Association of Financial Professionals will do nothing to dampen the austerity versus stimulus debate.

To wit: Forty-three percent of US corporations had larger US cash and short-term investment holdings this May than they did six months earlier. Only 24 percent of respondents reported that their short-term holdings had shrunk during the past six months.

In a press release accompanying the findings, the AFP described finance executives  [...] Wed, 30 Jun 2010 23:00:00 +0100 Tax TARP recovery recession economy demand default consumer spending Congress cash management cash concerns Cash Carmen Reinhart Careers/Management capital expenditures capex Banks Small businesses still pessimistic

Don't look for small businesses to lead the economic recovery.

The monthly reading from the National Federation of Independent Business Index of Small Business Optimism clearly shows little optimism among small business.

Sure, nine of the 10 components that comprise the index rose from the prior month.

However, some of the critical factors that would indicate whether small business owners plan to invest in their firms did not show encouraging results. The NFIB&# [...] Mon, 10 May 2010 23:00:00 +0100 small business National Federation of Independent Business jobs Cash capital expenditures Excess capacity continues to stunt capex

Capital expenditure among US companies fell more than anticipated in 2009 and although the trend is expected to reverse this year and next, growth is most likely to be modest.

Capex fell by 16.6 percent in 2009, compared with a 9.9 percent decrease projected by Fitch Ratings. The difference was largely driven by the fact that revenue was 4 percent lower than Fitch forecasted for 2009.

Fitch sees aggregate capex for a sample of 308 companies increasing by 3. [...] Wed, 05 May 2010 23:00:00 +0100 recovery demand Cash capital expenditures What's the deficit for, anyway?

One last point in connection with last Friday's rant about Alan Greenspan and Jamie Galbraith occurs to me, thanks to an interesting post this morning by Steve Randy Waldman.

The point has to do with investors' concerns about the deficit and their faith, or lack thereof, in the creditworthiness of the US.

Waldman is no market fundamentalist and admits to being "centrist to dovish" on the question, if only because the US has enormous sources of economic capital at [...] Sun, 28 Mar 2010 23:00:00 +0100 Risk recovery recession Greenspan economy Careers/Management capital expenditures budget bubbles Galbraith vs. Greenspan: You be the judge

I see Bloomberg can't resist interviewing Alan Greenspan about the perils of federal budget deficits, because the former Maestro's crystal ball is just so marvelously clear that he accurately predicted the housing crisis, which he did nothing to create, and took majorly serious steps to forestall it.

Oh, none of that last clause is true? And the ex-Fedster went so far as offer the markets the "Greenspan put," which is the ultimate "too big [...] Fri, 26 Mar 2010 23:00:00 +0100 unemployment Risk Regulation recovery recession Obama Moody's Greenspan financial crisis Federal Reserve economy downgrade default cost of capital Congress capital expenditures banking reform banking industry How Uncle Sam is more like a bank than a household

James Galbraith provides much-needed clarification of a point that has been obscured in the debate, if that's the right term, over the federal budget deficit at a time of recession.

And that is that when it comes to the economy, the government is more like a bank than a family household, in contrast to those who argue that the budget should be balanced at all times, and especially when times get tough. Even President Obama echoed that view in his State of the Union address when he s [...] Thu, 04 Mar 2010 23:00:00 +0100 Risk Obama government finance financing default Congress capital expenditures budget Bernanke Banking Why huge corporations are bad for the economy

There are three pieces in the blogosphere today that touch on the fundamental problem with our economic system and why it will remain in a ditch, or just lurch onward to the next crisis, if it isn't addressed.

And that is monopoly. I'll leave aside the politics of that, which is addressed well enough by Thomas Franks over at the Wall Street Journal. In a nutshell, he warns of a return to feudalism, which I've done as well before.

What struck me as new was this analysis [...] Wed, 03 Mar 2010 23:00:00 +0100 Regulation recovery recession New York Fed joblessness hiring growth financial crisis employment economy compliance capital expenditures Banks banking reform banking industry antitrust Stock buybacks herald a recovery? Really?

In its latest Herculean effort in positive spin, Reuters claims an increase in corporate stock buybacks is the latest sign of economic recovery.

Come again? If correlation isn't cause, then this article deserves a prize for mistaking the two, even if it marshaled a bit of data for evidence of the claim, which it decidedly does not.

But let's accept its undocumented assertion that buybacks are often accompanied by increases in M&A and capital expenditures.

Just [...] Mon, 01 Mar 2010 23:00:00 +0100 unemployment recovery recession M&A; joblessness employment economy Cash capital expenditures buybacks History shows tax cuts produce lower capital investment

This Bloomberg article on the dearth of corporate capital spending reports some important data, but ends up allowing a Bush era economist to spew hogwash about what will get companies to invest once again.

The amount of cash sitting on the balance sheets of the S&P 500 has soared by 78 percent from a year earlier, to $1.2 trillion, as capex has dwindled. And the article goes on to note that this is hurting an economic recovery by inhibiting employment growth, and with it, increased [...] Wed, 10 Feb 2010 23:00:00 +0100 unemployment Tax recovery recession joblessness Federal Reserve economy Cash capital expenditures capex It's the global economy, stupid

Lost in the hubbub over the financial condition of Greece and other weak E.U. members is the fact that the U.S.'s member states are in terrible shape as well, and those such as California and New York have bigger economies. Except that Barry Ritholtz has some data on this.

While Greece's economy is only the 34th largest in the world, California's is the 8th largest, equal to that of France.

And California is hardly alone. As Ritholtz points out, 43 of the 50 U.S. state [...] Tue, 09 Feb 2010 23:00:00 +0100 recovery recession Obama Administration Obama europe economy Congress Careers/Management capital expenditures capex bailouts AT&T's results are an object lesson for the economy

AT&T's fourth-quarter earnings results show why policymakers have to spend less time focusing on short-term moves in the capital markets and more on economic fundamentals.

The company said it will increase capital spending by almost $2 billion, or 10 percent, to improve its much-maligned network by adding more cell towers and connecting them to faster fiber optic lines.

Hooray, no? Sorry, that didn't go over well with investors, who sent the stock down by almost half [...] Thu, 28 Jan 2010 23:00:00 +0100 recovery joblessness employment economy earnings cost cutting Cash capital expenditures capex Oops. About that November increase in durable orders

This obviously is conspiracy theorizing at its worst, but it's hard not to scratch your head over the revision to the November report on durable goods orders that the Census Bureau quietly made on January 15.

Remember, the initial report of a 0.2 percent increase got major billing as a positive indication for the economy, even though the consensus expectation was for an 0.5 percent increase. As CNBC intoned, this was a sign of "a firmly entrenched economic recovery."< [...] Sun, 24 Jan 2010 23:00:00 +0100 recovery recession economy data consumer spending cash concerns capital expenditures As goes GE...

The results that General Electric reported on Friday for the fourth quarter of last year show that expectations continue to be everything on Wall Street. And so long as they're not as bad as expected, stocks will continue to rise.

Who knows, at this rate, maybe we'll never need a real recovery.

GE's shares rose 4.6 percent in pre-opening trading on the announcement despite a 19 percent decline in profits and a 10 percent fall in revenues from the year earlier quarter, [...] Thu, 21 Jan 2010 23:00:00 +0100 General Electric GE economy earnings cash concerns capital expenditures capex Investors ready for capex even if you aren’t

Apparently, investors think corporate balance sheets look fine and that it's time for some capital expenditures.

According to a Bank of America Merrill Lynch survey of more than 200 fund managers, for the first time since mid 2006, capital investment heads the list of investor priorities -- ahead of reducing debt and returning cash to shareholders.

Four out of ten respondents to the survey released Tuesday said capital spending is what they most want to s [...] Tue, 19 Jan 2010 23:00:00 +0100 investors debt Cash capital expenditures balance sheets P/E, cash flow disconnect stirs debate

All that attention you've put into cutting costs and conserving cash has really thrown a wrench into how some investors like to value stocks.

In short, cash flow is way, way up thanks to slimmed down expenses, but earnings are still recovering, politely speaking. What that's created is a stock market trading at historically high price-to-earnings multiples, but at lousy ones in terms of cash flow.

In addressing that disconnect, Bloomberg oddly claims that, &quo [...] Mon, 18 Jan 2010 23:00:00 +0100 stock market investors earnings cash management cash flow Cash capital expenditures capex