Major Companies Hoarding Cash, Preparing for Second Wave of Financial Crisis
If you’re looking for insight into how you should be responding to the “recovery” in the US economy, there’s actually a glimmer of sanity coming leading US companies. Right now major American companies are storing up more cash than at any other time within the past 40 years.
According to media reports, Citigroup and JPMorgan Chase among others are saving “as if another financial crisis were on the way.” Even the vice president of equity research at Rochdale Securities Dick Bove said, in reference to Citigroup, “In my 44 years in the business, I have never seen a company with remotely as much cash as this.”
Outside of the abovementioned banks, other firms saving up for a rainy day include Bank of America, Wells Fargo, and about 500 of the largest nonfinancial US firms. They are all in the process of increasing assets and short-term investments. So, if you’re wondering whether it’s better to be a spender or a saver right now, at least these firms seem to have made up their minds.
More details are available in The Huffington Post’s coverage of Citigroup, Bank of America, and other companies hoarding cash.