If unemployment is over 10%

[byu71]

tomorrow, could there be a silver lining. Could the dems finally be scared enough to do some things that would give the investing class reason to move out of cash. I read the Corporations are flush with cash, but won't make any moves that involve capital risk. I am not talking about speculative crap, I mean investing in growth.

It is in vogue to rip on corporations and especially banks and Wall St. I do it myself. However, I heard today the gov't made 10 billion on their Citi deal. All the banks have paid back Tarp. Fannie and Freddie who weren't touched in the financial reform bill are still a huge drain.

[All-American]

tomorrow, could there be a silver lining. Could the dems finally be scared enough to do some things that would give the investing class reason to move out of cash. I read the Corporations are flush with cash, but won't make any moves that involve capital risk. I am not talking about speculative crap, I mean investing in growth.

It is in vogue to rip on corporations and especially banks and Wall St. I do it myself. However, I heard today the gov't made 10 billion on their Citi deal. All the banks have paid back Tarp. Fannie and Freddie who weren't touched in the financial reform bill are still a huge drain.

Maybe we should spend more money.

[byu71]

Maybe we should spend more money.

If by we you mean consumers and corporations, well yes that would be good. However, who is going to do it in this confusing environment.

Not me. If I was approached by someone with a very good idea, I wouldn't take an equity position or loan them money. The potential upcoming tax structure doesn't make it worth the risk.

[All-American]

If by we you mean consumers and corporations, well yes that would be good. However, who is going to do it in this confusing environment.

Not me. If I was approached by someone with a very good idea, I wouldn't take an equity position or loan them money. The potential upcoming tax structure doesn't make it worth the risk.

Let's not worry about who what or how. Just spend. Buy some bacon. Make some grease.

[frank ryan]

Byu71 I have a surefire money-making venture that needs some seed money. I was wondering if you--nevermind I saw the post above

[byu71]

Byu71 I have a surefire money-making venture that needs some seed money. I was wondering if you--nevermind I saw the post above

LOL, I was speaking metaphorically. I don't have any money. I just sunk my last dime into guns and food storage.

[statman]

tomorrow, could there be a silver lining. Could the dems finally be scared enough to do some things that would give the investing class reason to move out of cash. I read the Corporations are flush with cash, but won't make any moves that involve capital risk. I am not talking about speculative crap, I mean investing in growth.

It is in vogue to rip on corporations and especially banks and Wall St. I do it myself. However, I heard today the gov't made 10 billion on their Citi deal. All the banks have paid back Tarp. Fannie and Freddie who weren't touched in the financial reform bill are still a huge drain.

Yes, corporations are COMPLETELY LOADED with cash (by historic standards). But they simply have to be. And don't hold your breath waiting for investment to pick-up because of it. They can no longer borrow their day-to-day / week-to-week / month-to-month cash requirements in the commercial paper markets. They now have to budget for cash like individuals. They need large (in some cases - like credit card companies - HUGE) operating cash reserves. And we're not talking loan-loss reserves here. This is operating cash. My company is currently holding six months worth of operating CASH. Floating daily/weekly/monthly cash on low-interest quick turn-around loans is no longer possible.

And this structural shift in financing of business operations is not without huge costs. We laid off approximately 13% of our workforce, all due to increased operating costs from the lack of short-term borrowing possibilities...

[statman]

However, I heard today the gov't made 10 billion on their Citi deal. All the banks have paid back Tarp. Fannie and Freddie who weren't touched in the financial reform bill are still a huge drain.

There is absolutely no question that TARP will be a net money-maker for the government. No question whatsoever. And that includes $100+ billion loss they will take on AIG. And NONE of the repaid TARP money has been used to pay-down the debt as the TARP law said it had to be. The Treasury felt it was better to hold on to the repaid funds, just in case...

[frank ryan]

LOL, I was speaking metaphorically. I don't have any money. I just sunk my last dime into guns and food storage.

If it is the kind of food storage Bob Wright and Glenn Beck hocked, than that is a good move. Hope you got some gold too

[byu71]

Yes, corporations are COMPLETELY LOADED with cash (by historic standards). But they simply have to be. And don't hold your breath waiting for investment to pick-up because of it. They can no longer borrow their day-to-day / week-to-week / month-to-month cash requirements in the commercial paper markets. They now have to budget for cash like individuals. They need large (in some cases - like credit card companies - HUGE) operating cash reserves. And we're not talking loan-loss reserves here. This is operating cash. My company is currently holding six months worth of operating CASH. Floating daily/weekly/monthly cash on low-interest quick turn-around loans is no longer possible.

And this structural shift in financing of business operations is not without huge costs. We laid off approximately 13% of our workforce, all due to increased operating costs from the lack of short-term borrowing possibilities...

I am not holding my breath, that is what I am saying. I am sure many corporations are in the situation yours is. However, others are in a situation a friend talked with me about yesterday. He is well connected and on a golf outing with a CEO of a big corp., the CEO told him they are sitting on their cash because of the impending tax climate.

I also know of a small business owner who is flush. They are doing well and could expand. Again he told me it isn't worth it to take the risk of expanding when the government looks to be on a taxing splurge.

[Uncle Ted]

I am not holding my breath, that is what I am saying. I am sure many corporations are in the situation yours is. However, others are in a situation a friend talked with me about yesterday. He is well connected and on a golf outing with a CEO of a big corp., the CEO told him they are sitting on their cash because of the impending tax climate.

I also know of a small business owner who is flush. They are doing well and could expand. Again he told me it isn't worth it to take the risk of expanding when the government looks to be on a taxing splurge.

I just read this interesting opinion about why companies may not be hiring that seems to back up what you are saying...

With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

[...]

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price.

How was that American Recovery and Reinvestment Plan going to work again?

[Color Me Badd Fan]

I just read this interesting opinion about why companies may not be hiring that seems to back up what you are saying...



How was that American Recovery and Reinvestment Plan going to work again?

As I've said before, the stimulus that was crammed down everyone's throats poisoned everything for Obama at a very early point in his term. Other major pieces of legislation have been viewed with suspicion because of the stimulus. Now it appears that the suspicion has crept down to employers.

Obama isn't Clinton and I don't think the GOP is going to take over the Senate. Not only will he not have the GOP controlling both houses of Congress like they did between the 94 midterm and 96, but Obama doesn't have it in him to triangulate like Bill Clinton did. He's going to own everything that happened between inauguration and November 2012. I mentioned a few months ago after the Health Care bill was passed that Obama will not be reelected if unemployment is over around 7.5% in 2012.

[Tim]

She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

GASP! 25% taxes! Help, I'm being oppressed! OH, NOOOOOOOOOOOOOO!

Seriously, dude... you can do better than that. No one in their right mind would think that 25% withheld is high.

[beelzebabette]

GASP! 25% taxes! Help, I'm being oppressed! OH, NOOOOOOOOOOOOOO!

Seriously, dude... you can do better than that. No one in their right mind would think that 25% withheld is high.

[Jacob]

GASP! 25% taxes! Help, I'm being oppressed! OH, NOOOOOOOOOOOOOO!

Seriously, dude... you can do better than that. No one in their right mind would think that 25% withheld is high.

Well, maybe no one in your mind.