re: #77 MurphysMom

It would. Why do you suppose they’re sitting on cash rather than investing it in jobs?

Well, it’s a complex question. Though I would also say that the huge amount of economic uncertainty in the US— with the lack of certitude that the GOP congress will vote to raise the debt limit— may have something to do with it. Some companies will say that they don’t trust that the recession is really over, because they feel it may be masked by government spending. Others— more— will say that it’s the uncertainty that the government will continue to spend as they need to during a recovery from a recession, that the austerity measures being proposed will cause a double-dip recession.

In addition, a lot of companies have been using that money to buy back shares from investors, which increases the earnings-per-share. This is a good investment for them when they can expect that stock price to rise— and it’s almost certain they can, with the combination of a revitalizing economy plus the higher earnings-per-share they’ll get with the repurchased stock. And if the stock price doesn’t rise immediately, fewer shares outstanding means fewer stockholders to placate in the short-term.

Does that help you understand?