It sounds perverse, but one of the emerging problems for investors and company executives is cash, too much cash.
According to Standard and Poor's, cash on hand at the nonfinancial S&P 500 companies will top half a trillion dollars for the first time ever by end of this quarter. While it's only an estimate, because not all companies have reported yet, so far, with 193 companies already in, cash and short-term equivalents is up 17% over the first quarter of 2003, which itself was up 25% over 2002, according to Howard Silverblatt of Standard and Poor's.
How much cash is there? Think of it this way: Microsoft, with $51 billion in cash, could give 51,000 entrepreneurs $1 million to start new businesses.
General Motors has some $37.5 billion in cash. Intel is sitting on $15.7 billion. At a share price of about $26, roughly 9% of its stock price is just cash.
Meanwhile, even with interest rates very low, long-term debt has risen more slowly, up just 6% from 2003. A record number of S&P 500 companies, 43, have less than $5 million in long-term debt, according to S&P.
Behind the rise in cash are surging revenues amid still-stringent cost containment. Meanwhile, companies have been paying lower taxes, both part of the Bush tax-cut plan along with increased use of loopholes. Corporate taxes as a percentage of gross domestic product in 2003 were just 1.2%, their lowest level in 21 years.
Elsewhere in the article the columnist Steve Liesman says, "The unlocking of this cash through higher salaries and increased hiring would really secure the economic recovery, creating that virtuous circle of increased salaries and spending that will supplant the stimuli of tax cuts and mortgage refinancings."
Because we aren't seeing the increased hiring and higher salaries as a result of this cash bonanza, it's obvious that the dubious tax cuts and the refinancing craze are just so much gas to pump up a punctured balloon.
No investment in jobs, capital infrastructure, or research... just more and more and more tax-free dividends for the leisure class. A half trillion dollars and counting.
That was the plan all along.
Meanwhile, here's an idea: American businesses that profited so handsomely from unwise Bush economic policies ought to foot the bill for another of its unwise foreign policies.
Let's have the S&P 500, with its $500 billion in cash, pay for Iraq.
A senior Defense Department official is under investigation by the Pentagon inspector general for allegations that he attempted to alter a contract proposal in Iraq to benefit a mobile phone consortium that includes friends and colleagues, according to documents obtained by The Times and sources with direct knowledge of the process.
John A. Shaw, 64, the deputy undersecretary for international technology security, sought to transform a relatively minor police and fire communications proposal into a contract allowing the creation of an Iraq-wide commercial cellular network that could generate hundreds of millions of dollars in revenue per year, the sources said.
Shaw brought pressure on officials at the U.S.-led Coalition Provisional Authority in Baghdad to change the contract language and grant the consortium a noncompetitive bid, according to the sources.
The consortium, under the guidance of a firm owned by Alaskan natives, consisted of an Irish telecommunications entrepreneur, former officials in the first Bush administration and such leading telecommunications companies as Lucent and Qualcomm, according to sources and consortium members.
Shaw's efforts resulted in a dispute at the Coalition Provisional Authority that has delayed the contract, depriving U.S. military officials and Iraqi police officers, firefighters, ambulance drivers and border guards of a joint communications system.
That has angered top U.S. officials and members of the U.S.-led authority governing Iraq, who say the deaths of many Americans and Iraqis might have been prevented with better communications.
Even Darrell Issa makes an appearance in the latest scandal.
"Hiding the death and destruction of this war does not make it easier on anyone except those who want to keep the truth away from the people," the father, Bill Mitchell, wrote yesterday. The letter has not yet been published.
In a postcript to the letter, he added: "I would be willing to help that poor woman in Kuwait [Silicio] who lost her job over the picture which she felt needed to be seen. Possibly even with enough press coverage, the other parents who lost children on the same day as my son would also feel that she did a service for us."
And yet both pages make mention of a "$2 million [reward] being offered through a program developed and funded by the Airline Pilots Association and the Air Transport Association." So the FBI pages were clearly prepared after 9-11 and informed by the events that took place, but conspicuously silent on the suspected connection between Osama bin Laden and the New York and Washington attacks.
With speculation escalating on an impending indictment, Ken and Linda Lay are not out much these days. Except for last week when they arrived at the very public Holocaust Museum Houston annual dinner, attended by more than 1,300.
The Lays were anything but hunkering down. They were seated at a table in the middle of the packed ballroom at the Hilton Americas-Houston and received well-wishers with bear hugs and kisses. You couldn't miss them with that steady stream of admirers.
Also not exactly in hiding in Houston is the insaneJeff Skilling who was dangerously near former Enron executive and current Bush Pioneer Nancy Kinder, proving that the Enron clique remains intact, complete with all the armies of lawyers and plastic surgeons that the richest criminals could possibly need.
Federal prosecutors will try two ex-Enron (ENRNQ) officials and four former Merrill Lynch (MER) employees together for allegedly creating a sham sale of Nigerian barges that allowed Enron to inflate its earnings, a judge has ruled.
U.S. District Judge Ewing Werlein Wednesday refused requests to try the defendants separately. They had claimed they would be prejudiced by evidence against the others.
The judge also denied a number of requests from the six defendants set to be tried June 7 in Houston. All have pleaded innocent to conspiracy and other charges in connection with the Nigerian barge deal.
Okay, I have to ask again: why are federal prosecutors trying "officials" and "employees" of Enron and Merrill Lynch, when they indicted the entire 80,000-person firm of Arthur Andersen, only a handful of whom had anything to do with the Enron fiasco?* Similarly, why aren't Jeff Skilling or Ken Lay in jail yet?
I'm not suggesting Andersen individuals aren't culpable, but why is the auditor held to a higher standard than the fraudsters?
If Andersen the auditor was annihilated by the feds, shouldn't Enron the perpetrator (that faked the barges) and Merrill Lynch the investment bank (that bought an interest in the fake barges) be destroyed too?
*I know, rhetorical questions are a pain. The theory that's been promoted here often enough is that Andersen the firm was indicted lock, stock, and shredder because, with the intention of killing two birds with one stone, the feds' elimination of Arthur Andersen had the twin effect of deflecting media attention away from Enron at the moment it would have been hottest, and simultaneously destroying all the records of Andersen's financial audits of Halliburton while its CEO was Dick Cheney.
