Where are all the jobs that were supposed to be created? In the man's pocket!

[Realitycheck]

http://www.usatoday.com/money/companies/2010-07-28-cashcows28_ST_N.htm

 

Where else would it be? The people predominantly at the top, who aren't necessarily in favor of Obama's agenda, aren't in any hurry to play into his hand, hoarding up record amounts of cash. I guess the question is how long will they hold out?

Edited July 28, 2010 by agentchange

[jackson33]

I guess the question is how long will they hold out? [/Quote]

 

One thing about your link; Held Corporate funds is far in excess of two Trillion Dollars and more importantly the major economic driving engine in the US are small and intermediate business and/or start up business, whom either have no means to increase or start a business or desire to...

 

I suspect a lot depends on the upcoming elections or possibly how destructive the meaning of those elections could be on current enacted or proposed policy. Whether obligations being placed on the 'Free Markets' will in fact be challenged, so to speak.

 

I was hoping your link went to what is being claimed by our GOVERNMENT and that with out the stimulus and other programs (Health Care/Financial Reform) we would have lost an additional 5-10 Million jobs and be in an International Depression (because of Bush policy), if it had not been for Obama and the current Congress.

[Pangloss]

That article may have been moved, can you try again with the link, agentchange? Thanks.

 

Do you really feel that business owners are holding back because they don't like the president's ideological agenda? It's not been my experience that business owners are in the business of making less money when more money is available.

[Realitycheck]

I'm not sure using my phone, but I think this is the page. Seriously speaking, no I don't think that is the primary driving force in their decision-making process, but the issue is probably there in some of their minds. Being conservative is one thing, but we are looking at cash reserves 25% higher than they have EVER been. When cash is earning you virtually nothing and the job market is the way it is, it seems like the bright, responsible minds that catapulted Obama to stardom would think of something productive to do with the money, or is it just dead weight in the man's wallet until a Republican gets elected back in? Just who holds the strings anyway? I can understand the cautious nature in the face of unknowns, but we're supposed to be on the rebound, not dead in the water.

 

http://www.usatoday.com/money/companies/2010-07-28-cashcows28_ST_N.htm

Edited July 28, 2010 by agentchange

[jackson33]

Pangloss; The old link and the new one offered by ag are very slow loading...

 

 

Do you really feel that business owners are holding back because they don't like the president's ideological agenda? It's not been my experience that business owners are in the business of making less money when more money is available. [/Quote]

 

Speaking for myself and expressed; You have this a little backwards IMO. Business owners, potential business and more importantly those that do the investing are very concerned about current policy. I'll explain it this way as a very small investor and life long small business owner.

 

I have -X- number of dollars, disposable or could afford to lose, at my age. If I currently invest in a business or an equity of a business, I expect a certain return on that investment. In doing so I currently pay 15% on any profit earned from that investment, that will go up to near 40% on 1/1/2011. To put at risk -X- number of dollars taking that risk will be greatly diminished.

 

As it was in my day, to start up or increase a current venture anything that might effect the profit margins, would diminished my desire to risk the investment. Even today, while I feel buying homes in Green Valley, Arizona (think I recall your interest in Arizona) would be a very good FUTURE investment, rather than cash for my kids on my death and provide me with a nice place to live, I am reluctant to commit. I could easily today buy three or four homes, live in the smallest (a natural recluse myself) and rent out the other two or three, no doubt showing a profit by today's measures. However, if we are going into a Nationally Controlled Economy, financially speaking and those extra three homes would then become excess property under "Social Justice", any profits taxed at 40% while alive and after death up to 55% in Taxes, then the investment is no longer advisable.

 

Small business, start ups and even the Corporate Giants are all going to be effected in much the same manner, with a good many unknown factors, especially in labor direct or hidden cost. For instance many States have 'Right To Work Laws' where 'Card Check' could and would make a tremendous difference in enacted. A large percentage of business operate where labor laws are currently restricted, Card Check then bypassing their laws.

 

The net result is making a less percentage of profit, for more investment, not making more money ....Keep in mind, most every State, in addition to the Federal, have obligations that are out of control and these will need to be addressed as well.

 

agentchange; Most the above pertains to your last post as well and will add, that a good many economist and/or people in business, feel any seen improvement is based on artificial evidence. While Government is spending at ALL TIME high levels, the 'Free Market' has NOT been. Most the figures your seeing then, not reality of the economy. Consumer confidence for instance is at or near all time lows or frankly the unemployment figures are misleading.

[mississippichem]

Big Banks have been spooked as of recent due to the recent financial legislation that puts restrictions on them trading derivatives. They new bill created a clearing house that slows down the derivatives securities transactions. That along side with a base interest rate of 1%, keeps big lenders' money locked up. Their is little motivation to lend with such low interest rates. Just take a lok at the S&P 500 on any given day, it's a blood bath out their; not all bad, but extremely volatile. A lot of these companies want that money on their balance sheets when quarterly reports come out, so when potential investors analyze the corperation's financials values like ROE (return on equity), DER (debt to equity ratio) and straight out cash reserves the company will appear fundamentally sound. This is part of a long list of accounting tricks that every CFO who is worth his salt knows. All that to say, alot of these companies are not prepared to acquire the risk (or investor perception of risk) of new employment. Lokk up the concept of liquidity trap. Thst is the situation we are in our 1% base interest rate. At face value it has nothing to do with jobs, but it's effects are far reaching. Hope for a healthy bit of inflation; that is what we need. (never thought I would say that)

[Pangloss]

The old link is working for me now as well as the new one; thanks AC.

 

It's a good article, and it answers a question that I was pondering when I first heard commentators talk about what I call the "withholding" argument (that business owners are holding back from growing their businesses). People starting saying this a while back, but they didn't have any data to back up the assertion that it's worse than before. Now it appears that they do.

 

It's a significant statement. Thanks for passing it along.

[Realitycheck]

No, wait a minute. I believe that there was a good reason why investment decisions were hampered. I think the catch-phrase of the week was that it was 'due to uncertainty about rising government debt in many European countries'. Yeah, that was it. I'm sure someone will think up some other excuse soon enough. (You have to admit, though, that all of these European debt failures were somewhat timely.)