Insane? -- May 20, 2016

Updates

May 23, 2016: The Financial Times -- US companies' cash pile hits $1.7 trillion. Story was posted May 20, 2016, and has the same data points as the one below. Some additional notes:

It is the first time the top five cash hoarders have been made up exclusively of tech groups, an industry that generates more of its sales abroad than any other sector and one that has been embroiled in tax disputes in both the US and Europe.

The ever increasing amount of cash also highlights how US boardrooms are reticent to invest in their businesses, choosing instead to increase dividends, in a sign of the continued anxiety that economic activity could still slow at home or in China.

The report showed the first annual dip in capital spending since the US emerged from recession. Expenditures on things like new equipment slipped 3 per cent to $885bn as energy and mining groups retrenched in the face of sharply lower commodity prices.

“Companies are hoarding cash,” said Jack Ablin, chief investment officer at BMO Private Bank.  

Maybe if tax codes were a bit more corporate-friendly, some of that cash would be winding its way through the economy.

Original Post

 

My definition of insane at this link: surprise me. In case the link breaks, but much more at the link:

Apple, Microsoft, Alphabet, Cisco Systems, and Oracl are sitting on $504 billion, or 30%, of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015.

That's even more cash concentration than in previous years, as these five companies held 27% of cash in 2014 and 25% in 2013. Apple alone is holding more cash and investments than eight of the 10 entire industry sectors.

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