Tuesday, December 28, 2010

Companies Flush With Cash - Newsweek

Companies Flush With Cash - Newsweek


The recession has been over in most countries for more than a year now, and as economists continue to decipher how and why this downturn differed from others, an interesting anomaly has emerged. While nations like the United States, Great Britain, and Japan are saddled with debt, companies in the U.S. and Europe have more than $1.5 trillion sitting on their respective balance sheets. In normal times, this abundance of cash would be good for the economy, as companies would invest, expand capacity, and create jobs. And indeed, over the next year, analysts say there may be a slight uptick in spending as cash-heavy firms turn to mergers and acquisitions, dividend payments, capital expenditures, and a variety of job-creating investments, particularly in high-growth countries such as China, India, and Brazil.

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