QE-3

[explanade]

Why would they add jobs or start any large capital intensive investment in the US? Between the EPA and the govt regs, there's no incentive for them. Apple has about $100 billion or so in CASH........

That's a political talking point.

 

[ziggy29]

Lots of cash is most often a reflection of inadequate demand and usually lots of that cash is overseas.

And also allows businesses to turn their R&D departments into M&A departments instead, as more companies are expanding their product lines not by developing them in-house, but by buying smaller companies producing them. This is very common in technology companies, though Apple has mostly been a notable exception.

 

[Gone4Good]

Why would they add jobs or start any large capital intensive investment in the US? Between the EPA and the govt regs, there's no incentive for them. Apple has about $100 billion or so in CASH........

One of the ancillary benefits of yesterday's Fed action is that we get to put claims like this to the test. If the result of massive Fed intervention is accelerating inflation without any significant improvement in the labor market open-minded people will know the economy is facing supply-side constraints like those mentioned above. If, however, the labor market improves without accelerating inflation those same open-minded people will conclude that demand-side factors were constraining the economy. If nothing much happens, we'll conclude that "unconventional" monetary policy is a flop.

Incidentally, the current low interest rate / stable inflation environment in the face of almost four years of unprecedented monetary expansion argues strongly in favor of the last two conclusions at the expense of the first.

 

[explanade]

There are fewer and fewer pure software companies.

Even MS is getting more and more involved with producing hardware products.

Apple pours billions to secure the supply chain, to be able to move tens of millions of product each quarter. But they get great returns on those billions so their cash position keeps growing.

This article cites $3.6 trillion in cash:

Companies, Flush with Cash, Share More With Shareholders. Finally. | Business | TIME.com

But this more recent article indicates corporations are taking advantage of low rates to refinance debt by issuing more bonds at lower rates:

Corporate Bond Market's Busiest Day in 2 Years - WSJ.com

 

[Hamlet]

Are we going unicorn hunting as well?

open-minded people

 

[brewer12345]

Are we going unicorn hunting as well?

I ride one to work every day (or so my management seems to believe).

 

[FinanceDude]

That's a political talking point.

There is always a reason that large corps hoard cash. Usually its because they expect a big slowdown on their market, or the business environment is not favorable to invest in their opinion. In this case, the business environment looks uncertain to them, so they are holding tight. I don't blame them one bit...........

How is that political?

 

[explanade]

[Mod Edit]


Economists will tell you the reason they sit on cash is that there's lack of demand, which is understandable given the unemployment and the near-meltdown of the banking system.

But to admit that would be to open yourself to the notion of exploring fiscal policies to stimulate or replace some of the shortfall in demand.

 

[Alan]

Thanks folks, this thread has now run its course.

Queen - 'Another One Bites the Dust' - YouTube