Detailed market commentary at The Market Ticker
(The Year 2012 In Review)
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|User Info||Empire Index: Simply Awful; entered at 2010-11-15 08:50:33|
Registered: 2009-03-09 avoiding yellow snow
to me, at least, the interesting money quote was:|
"In a series of supplementary questions, respondents were asked about cash holdings and debt financing. A majority of respondents reported that they expected their outstanding debt levels to remain unchanged over the next year; of those firms that expected a change in debt levels, the number anticipating a decline somewhat exceeded the number expecting an increase. In response to a question about current cash holdings, 35 percent of firms said that they were currently holding higher than usual (excess) cash balances, while just 22 percent indicated that their cash balances were lower than usual. Moreover, looking ahead to the next twelve months, a sizable 42 percent of respondents expected their cash holdings to increase, whereas fewer than half that number expected cash balances to decline. Finally, when asked how they planned to finance capital spending over the next year, respondents indicated that they would use cash to finance nearly 60 percent of expenditures."
Bottom line, no growth because they aren't planning to borrow more, and they aren't planning major investments either, but sitting on cash for two reasons: to use to pay down debt, and to use to fund margin squeeze. This is pretty amazing given the low interest rates (and expected flattening of the yield curve). Ie, I sense strong hunkering down.