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comment by snoodog
snoodog  ·  3231 days ago  ·  link  ·    ·  parent  ·  post: Why Are Corporations Hoarding Trillions?

NY times misses the point once again. Corporations are hording cash because bond rates are so damn low its very cheap insurance for them. It makes lots of sense to issue bonds when rates are super low as insurance for future market dislocations. Were 7 years out from the last recession, asset prices have bubbled significantly, recovery has been slow, china is slowing down, consumers are leveraged at 2008 levels, and the last 3 weeks have been a wild ride on the stock market. That being said I think interest rates are still probably the biggest factory.

Some interesting links:

Cash Vs Interest Rates (Correlation)

http://bama.ua.edu/alstone/CashHoldings_Interest_Sept2013.pdf

Cash Vs recessions (no correlation)

http://bama.ua.edu/alstone/CashHolding_Recession_July2013.pdf