Something big this way comes?

Now, what news on the Rialto?

Something big this way comes?

Postby Zack Morris » Fri Jan 22, 2016 5:51 am

An interesting analysis of why corporations today hoard so much cash -- and why investors agree that they should: Why Are Corporations Hoarding Trillions?

Spoiler:

Surely the most important economic question of our time is a fairly simple one: Are the good times over? Will wages continue to fall for many, while rising high for a few? In the cash conundrum, we might find a modest reason for optimism. If corporate leaders and their investors truly believed that the future were bleak, that innovation and economic growth were irreparably slowing, there would be little reason to hold on to all that cash. Their hoarding of it hints that they think the next transformative innovation could be just around the corner. If in fact they do — and if they’re right — it’s good news for all of us.


We are speeding toward veritable icebergs of cash!
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Re: Something big this way comes?

Postby Simple Minded » Fri Jan 22, 2016 12:42 pm

In the olden days, the common wisdom was to use good times to accumulate capital, and use bad time to buy assets at a discount.

That and saving for a rainy day, or making hay while the sun shines were "normal."

Last 15 years or so, eating your seed corn seems the norm.
the good news: there appears to be about 320 million different opinions about America is.
the bad news: except for mine, they're all wrong.

When you have an anti-racist hammer in your hand, you tend to see everyone who disagrees with you as a racist.
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Re: Something big this way comes?

Postby Zack Morris » Sat Jan 23, 2016 3:33 pm

How so? At least according to leading-edge capitalist theory, companies today are much better managed than the sprawling old-day conglomerates of old. Far from eating their seed corn, they've largely accumulated cash stockpiles during the recent bull market. The picture is complicated by QE, which made it possible to obtain cheap financing for acquisitions, so we saw a wave of M&A activity in 2015 and the year before, in some industries like pharma and tech. But there is still room to deploy capital, though, especially if assets get cheaper in a bear market.

A lot of interesting stuff on the horizon that pessimists (including some on this forum) would dismiss as fads only a few years ago. Now, they're starting to sound like Krugman and his famous comparison of the Internet's impact to fax machines. Few -- and I certainly did not -- saw the brilliant, value-creating engine that is Facebook. Now, we have witnessed a sea-change in artificial intelligence capability, self-driving cars are just around the corner, CRISPR is revolutionizing biology, VR is arriving, and former high-tech innovators like Intel are now in a once-unthinkable permanent decline as a new paradigm sets in.

There is so much wealth yet to be created that it boggles the mind. It's an interesting perspective shift: that perhaps the conventional wisdom that corporations are hoarding cash only because they can't find anything useful to invest is 180 degrees from the real truth.
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Re: Something big this way comes?

Postby Mr. Perfect » Mon Feb 01, 2016 10:57 am

I guess this is your first bubble.
Censorship isn't necessary
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Re: Something big this way comes?

Postby noddy » Tue Feb 02, 2016 9:30 am

Simple Minded wrote:In the olden days, the common wisdom was to use good times to accumulate capital, and use bad time to buy assets at a discount.

That and saving for a rainy day, or making hay while the sun shines were "normal."

Last 15 years or so, eating your seed corn seems the norm.


you are describing depression conditions, people not optimistic for the endless growth of the future, cynical about the safety nets provided by the system and generally paranoid that their jobs might not be there tommorow.

bugurk

they will wish they had of malt mashed the corn instead of eating it - same outcome but a more pleasant path to get there.
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Re: Something big this way comes?

Postby Simple Minded » Wed Feb 03, 2016 1:34 pm

noddy wrote:
Simple Minded wrote:In the olden days, the common wisdom was to use good times to accumulate capital, and use bad time to buy assets at a discount.

That and saving for a rainy day, or making hay while the sun shines were "normal."

Last 15 years or so, eating your seed corn seems the norm.


you are describing depression conditions, people not optimistic for the endless growth of the future, cynical about the safety nets provided by the system and generally paranoid that their jobs might not be there tommorow.


Maybe, or just describing farmers, or anyone raised in the era where it was implicitly understood that there are few guarantees in life. That both nature and life can be unpredictable, that you will not always get sunshine, rain, daylight, warm temps, good crops, or health when you need them.

Why so many people think otherwise is somewhat of a mystery. Separation from nature?

noddy wrote:bugurk


What is bugurk?
Last edited by Simple Minded on Wed Feb 03, 2016 2:02 pm, edited 1 time in total.
the good news: there appears to be about 320 million different opinions about America is.
the bad news: except for mine, they're all wrong.

When you have an anti-racist hammer in your hand, you tend to see everyone who disagrees with you as a racist.
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Re: Something big this way comes?

Postby noddy » Wed Feb 03, 2016 1:53 pm

Simple Minded wrote:
What is bugurk?


the noise a chicken makes.

buk-buk-bugurk
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Re: Something big this way comes?

Postby Simple Minded » Wed Feb 03, 2016 2:04 pm

noddy wrote:
Simple Minded wrote:
What is bugurk?


the noise a chicken makes.

buk-buk-bugurk


People are chickens? That would answer my question. Once again, you are god-like in my eyes! :D
the good news: there appears to be about 320 million different opinions about America is.
the bad news: except for mine, they're all wrong.

When you have an anti-racist hammer in your hand, you tend to see everyone who disagrees with you as a racist.
Simple Minded
 
Posts: 6257
Joined: Mon Jan 09, 2012 1:24 pm

Re: Something big this way comes?

Postby noddy » Thu Feb 04, 2016 8:36 am

Simple Minded wrote:
noddy wrote:
Simple Minded wrote:
What is bugurk?


the noise a chicken makes.

buk-buk-bugurk


People are chickens? That would answer my question. Once again, you are god-like in my eyes! :D


i actually intended that i am a chicken, scratching my way through human politics and crapping randomly on whatever happens to be behind me.
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Re: Something big this way comes?

Postby Simple Minded » Fri Feb 05, 2016 2:52 pm

noddy wrote:
i actually intended that i am a chicken, scratching my way through human politics and crapping randomly on whatever happens to be behind me.


You're still one of the better chick-men I have ever imagined. ;)

keep scratching Bro! :)
the good news: there appears to be about 320 million different opinions about America is.
the bad news: except for mine, they're all wrong.

When you have an anti-racist hammer in your hand, you tend to see everyone who disagrees with you as a racist.
Simple Minded
 
Posts: 6257
Joined: Mon Jan 09, 2012 1:24 pm

Re: Something big this way comes?

Postby Zack Morris » Sat Feb 06, 2016 1:30 am

Mr. Perfect wrote:I guess this is your first bubble.


Says the guy stockpiling for the apocalypse, which he believes said bubble will trigger.
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Re: Something big this way comes?

Postby Mr. Perfect » Tue Mar 15, 2016 8:49 am

Right. This isn't my first bubble. It'll probably be the last though, for everyone.
Censorship isn't necessary
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Re: Something big this way comes?

Postby Zack Morris » Wed Mar 16, 2016 1:09 am

It's probably not your first Apocalypse either, and maybe not even the last.
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