(08-16-2010 02:56 AM)animus Wrote:  http://www.businessweek.com/news/2010-08...lysis.html

Even more somber IMO

http://finance.yahoo.com/banking-budgeti...et=&ccode=

(08-15-2010 11:49 AM)Machiavelli Wrote:  Guys I don't know. Everything I have been reading is stating that we are headed for deflation. Money supply is not increasing.

As the article Torch posted correctly points out, deflation has been here. It also correctly states that debts don't deflate while asset values do.

At some point you need to come to the realization that there is no singular indicator of economic strength. Meaning just because there is deflation doesn't mean the economy is ok.

(08-15-2010 07:28 PM)RobertN Wrote:  Corporations are sitting on 8.4 trillion. I understand the need for financial security but come on, you just don't sit on that much claiming "it is keeping us from failing" and "we are affraid of the economy". There IS another reason: the election of 2012. It is blatently obvious to those who aren't blinded by corporate propaganda. Just ask professional golfer John "tan man" Boehner. He meets with the corporate elite several times a week on the course(and you righties thought Obama's golfing schedule was excessive! ).

http://www.nytimes.com/2010/07/26/busine...gewanted=2

You're dumb as a box of rocks. Businesses are sitting on all their money because they're waiting on 2012? Are you really that Gdamn stupid? They have expectations from their stockholders. Their board has to show a 10-K every damn year. If it doesn't look good, they lose their job in their elections. They don't sit on money if they can make more from it. If they're sitting on money it's either because they're unsure what the clown at 1600 is going to do next, they don't see any market potential, or a combination of both. No one is going to invest in a stagnant business.

Actually, a lot of the cash businesses are "sitting on" is overseas. If they bring it home, they have to pay US taxes on it. So there's no point in bringing it home unless the investment opportunities here are substantially better than elsewhere. Right now, it's looking like other places are recovering ahead of us. So, it's those other places that the money will be invested.

Charlie Rangel wanted to encourage US companies to bring the money home by taxing it even if they don't. My expectation would be that instead of bringing the money home, a more rational response for most US based companies would be to move their corporate headquarters overseas. Almost all the oilfield service companies have already done so, because their operations are primarily outside the US at this point. Perhaps because of his current troubles or perhaps because somebody talked some sense into him, Rangel seems to have backed off.

(08-16-2010 09:02 AM)Owl 69/70/75 Wrote:  Actually, a lot of the cash businesses are "sitting on" is overseas. If they bring it home, they have to pay US taxes on it. So there's no point in bringing it home unless the investment opportunities here are substantially better than elsewhere. Right now, it's looking like other places are recovering ahead of us. So, it's those other places that the money will be invested.

That's an interesting discussion all by itself. I've got the Apr 27, 2009 Chem & Eng News in front of me, and it's got an article talking about Big Pharm bringing manufacturing back to the US.

I'm sure the issues and challenges vary widely depending on the product. But, IMO the gov't should have been cognizant of this trend, and adjusted the taxes accordingly.

My feeling is business are sitting on money simply because their competition is.

http://mjperry.blogspot.com/2010/08/infl...-time.html

Quote:There's been a lot of debate lately about inflation, and many conflicting opinions about whether we're headed for inflation or deflation. The consensus among economists seems to be now leaning more towards pending deflation than inflation, and yet gold, the classic hedge against pending inflation, is still trading close to all-time historical highs of around $1200 per ounce,...

So despite low levels of inflation over the last five years, inflation variability peaked in 2009 by both measures, and those historically high levels of variability might be adding to the confusion about whether we're headed for inflation or deflation.