Showing posts with label Regime Uncertainty. Show all posts
Showing posts with label Regime Uncertainty. Show all posts
Monday, December 24, 2012
Saturday, February 26, 2011
Why Boom Is A No-Show: A Lack Of Net Investment - Investors.com
Remember what we said about the importance of net investment to economic growth? This article discusses what has happened to net investment in recent years.
Saturday, December 11, 2010
Companies Keep Tight Grip on Cash - WSJ.com
EXCERPTS:
"Corporate America's cash pile has hit its highest level in half a century.
Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies' total assets—the largest share since 1959.
The cash buildup shows the deep caution many companies feel about investing in expansion while the economic recovery remains painfully slow and high unemployment and battered household finances continue to limit consumers' ability to spend.
***
In one bright sign, the Fed's data show that the net worth of U.S. households increased to $54.9 trillion in the third quarter, up from $53.7 trillion in the second quarter, as rising stock-market wealth more than offset declining home values.
That was still well below the second-quarter 2007 peak of $65.7 trillion. After-tax household income rose to an annualized $11.42 trillion from $11.37 trillion in the second quarter.
The cash pooling up at companies has the potential to help the economy grow more vigorously and bring unemployment lower—if they start spending it on new plants, equipment and employees.
But in the wake of the worst economic downturn since the 1930s, companies are hesitating to make that shift, said Brian Bethune, economist at IHS Global Insight.
"Corporate America's cash pile has hit its highest level in half a century.
Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies' total assets—the largest share since 1959.
The cash buildup shows the deep caution many companies feel about investing in expansion while the economic recovery remains painfully slow and high unemployment and battered household finances continue to limit consumers' ability to spend.
***
In one bright sign, the Fed's data show that the net worth of U.S. households increased to $54.9 trillion in the third quarter, up from $53.7 trillion in the second quarter, as rising stock-market wealth more than offset declining home values.
That was still well below the second-quarter 2007 peak of $65.7 trillion. After-tax household income rose to an annualized $11.42 trillion from $11.37 trillion in the second quarter.
The cash pooling up at companies has the potential to help the economy grow more vigorously and bring unemployment lower—if they start spending it on new plants, equipment and employees.
But in the wake of the worst economic downturn since the 1930s, companies are hesitating to make that shift, said Brian Bethune, economist at IHS Global Insight.
Saturday, August 28, 2010
Vietnam Moves Ahead With Price Measures - WSJ.com
EXCERPTS:
"HANOI—Vietnam is enacting measures allowing it to slap price controls on foreign and private companies starting Oct. 1 in a move designed to contain inflation but that risks stifling business sentiment.
An official at Vietnam's Finance Ministry confirmed Thursday that the measures will go into effect Oct. 1. The orders will let the Vietnamese government intervene and impose controls if it believes that prices on a variety of items—ranging from cement and steel to sugar and rice—are moving unusually or out of step with the cost of other component goods.
So far, there is no indication Vietnam will move to control prices in the immediate future. But its frequent bouts with inflation suggest the measures might be imposed on at least some goods at some point.
***
The move is likely to produce a fresh outcry among investors about state intervention. It also comes after a series of problems at state-sector companies have damaged Vietnam's reputation as one of the standout success stories in a new wave of frontier emerging markets.
***
The new power to impose price controls seems designed to limit any social tensions from any further rising prices. But the downside is that Vietnam risks becoming a less attractive place to do business, strangling foreign investment, encouraging locals to invest overseas and worsening its balance of payments.
"HANOI—Vietnam is enacting measures allowing it to slap price controls on foreign and private companies starting Oct. 1 in a move designed to contain inflation but that risks stifling business sentiment.
An official at Vietnam's Finance Ministry confirmed Thursday that the measures will go into effect Oct. 1. The orders will let the Vietnamese government intervene and impose controls if it believes that prices on a variety of items—ranging from cement and steel to sugar and rice—are moving unusually or out of step with the cost of other component goods.
So far, there is no indication Vietnam will move to control prices in the immediate future. But its frequent bouts with inflation suggest the measures might be imposed on at least some goods at some point.
***
The move is likely to produce a fresh outcry among investors about state intervention. It also comes after a series of problems at state-sector companies have damaged Vietnam's reputation as one of the standout success stories in a new wave of frontier emerging markets.
***
The new power to impose price controls seems designed to limit any social tensions from any further rising prices. But the downside is that Vietnam risks becoming a less attractive place to do business, strangling foreign investment, encouraging locals to invest overseas and worsening its balance of payments.
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