"The nation’s workers may be struggling, but American companies just had their best quarter ever.Catherine Rampell, "Corporate Profits Were the Highest on Record Last Quarter", NYT 23 november
American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms. /.../
Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.
Still, most economists say the current growth rate is far too slow to recover the considerable ground lost during the recession.
'The economy is not growing fast enough to reduce significantly the unemployment rate or to prevent a slide into deflation,' Paul Dales, a United States economist for Capital Economics, wrote in a note to clients. 'This is unlikely to change in 2011 or 2012.'"
Economist, "Gimme a 'V'", 4 december - profiterna ökar snabbare än sysselsättningen i USA; V-form kontra L-form
John Authers, "Why hoarding comes naturally in the Age of Anxiety", FT 27-28 november, s 7 - om att företagen har så mycket pengar men inte investerar dem. Osäkerhet. (Dock utan referenser till Keynes/Shiller etc.)
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Jfr juli 2010, "Företags profiter och sparande"
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UPPDATERING 5 mars 2011
"The labor market may be improving, but U.S. workers have yet to share much in the productivity and profits they’ve helped generate during the recovery.Mark Whitehouse, "Number of the Week: Workers Not Benefiting From Productivity Gains", WSJ Real Time Economics-bloggen, 5 mars
From mid-2009 through the end of 2010, output per hour at U.S. nonfarm businesses rose 5.2% as companies found ways to squeeze more from their existing workers. But the lion’s share of that gain went to shareholders in the form of record profits, rather than to workers in the form of raises. Hourly wages, adjusted for inflation, rose only 0.3%, according to the Labor Department. In other words, companies shared only 6% of productivity gains with their workers. That compares to 58% since records began in 1947. /.../"
UPPDATERING 19 mars
Mark Whitehouse, "Number of the Week: Companies’ Cash Hoard Grows", WSJ Real Time Economics-bloggen, 12 mars
"U.S. companies’ cash hoard keeps getting bigger, a trend both good and troubling.
After hitting new highs in five of the last six quarters, nonfinancial corporations’ cash and other liquid assets reached $1.9 trillion at the end of 2010, according to the Federal Reserve. That’s 7% of all their assets, the highest level since 1963."
UPPDATERING 22 mars
FT hade i fredags en artikel om hur också företag i Storbritannien har sett vinsterna komma tillbaka, men utan att öka investeringarna "proportionerligt". FT rapporterar att företag använder extrapengarna till att köpa tillbaka aktier snarare än att göra nya investeringar. Colin Ellis från British Venture Capital Association säger till FT att "companies' choosing buy-backs over investment suggested they were not confident about the future, and also that they were not short of spare capacity."
Alison Smith, "Companies face difficult calls on returning cash", FT 18 mars
Norma Cohen, "Focus falls on cash piles", FT 18 mars
UPPDATERING 27 mars
Rebecca Wilder på bloggen Angry Bear argumenterar för att den bestående höga arbetslösheten i USA inte beror på en höjd jämviktsarbetslöshet, utan på en "corporate savings glut".
Rebecca Wilder, "It's not structural unemployment, it's the corporate savings glut", angrybear 27 mars
Chris Dillow plockar fram de amerikanska marxisterna Paul Baran och Paul Sweezys gamla bok Monopolkapitalet. Detta citat från den boken passar bra på den nuvarande situationen, konstaterar Dillow:
"[det monopolkapitalistiska systemet] tends to generate ever more surplus, yet it fails to provide the consumption and investment outlets required for the absorption of a rising surplus and hence for the smooth working of the system. Since surplus which cannot be absorbed will not be produced, it follows that the normal state of the monopoly capitalist economy is stagnation (p 108)."Stumbling & Mumbling, "Monopoly Capital redux", 11 mars
UPPDATERING 1 juli
Stephen Greenhouse på NYT:s Economix-blogg refererar en ny studie av nationalekonomerna Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin och Sheila Palma om fördelningen av de ökade inkomsterna sedan recessionen vände i USA andra kvartalet 2009 (fram till fjärde kvartalet 2010). 88 procent av de ökade inkomsterna har gått till vinstandelen.
Steven Greenhouse, "The Wageless, Profitable Recovery", Economix 30 juni
Uppdatering 19 augusti
FT:s James Mackintoshs ger en intressant förklaring till den märkliga vinst-jobb-divergensen i USA idag:
"Corporate profits are the difference between revenue and cost.James Mackintosh, "A cautious view of corporate rebound", FT fm 15 augusti
Costs are mostly labour, so job cuts in a recession - about 7m in the US in the recession of 2008-09, more than previous downturns - widen margins. The usual offset to that is that fewer jobs inherently means lower spending, cutting revenues faster than costs can be cut.
This time around, the US government has gone to extraordinary lenghts to keep spending up. On top of standard counter-cyclical spending, such as food stamps, came extended unemployment benefits, tax cuts, stimulus projects, and the extension of healthcare. The budget deficit is running at levels never seen outside wartime.
Companies managed, in other words, to dump a big chunk of their labour costs on to the government without incurring as much damage as usual to revenues.
Of course, more is going on than a simple transfer from government to shareholders. Tobias Levkovich at Citigroup estimates this effect accounts for about 10 to 15 per cent of corporate profits. Emerging markets have remained strong, and borrowing costs have plunged, as the Federal Reserve cut interest rates to nearly zero.
Taken together, this helps explain why corporate profits remained robust in the first half of the year, even as the US economy struggled."
Uppdatering 21 september 2011
Ekonomen David McLean hävdar att företags cash hoarding har ökat de senaste 30-40 åren eftersom företagens R&D-utlägg har ökat och deras inkomsters volatilitet har ökat. McLean hävdar att därför är det rationellt för företagen att ha mer likvida medel i reserv.
David McLean, "Corporations hoard cash as precautionary measure", MIT Sloan Experts
FT Alphaville-bloggen diskuterar huruvida de stora vinsterna kommer göra en stor inbromsning snart.
"The combination of company cost-cutting and policy-driven demand, both of which have been keeping margins and profits high, will soon come to an end. We’ve written about all this before and think it makes sense.Cardiff Garcia, "Margin squeeze.... rally?", FT Alphaville 20 september
Nomura analysts have a somewhat different notion /.../"
Och Chris "Stumbling and mumbling" Dillow ser stor investerar-pessimism i det faktum att företagen hoardar pengar men inte investerar dem - jfr hans blogginlägg från 11 mars om Monopolkapitalet som jag länkat till ovan.
"firms aren’t reinvesting their retained earnings, but are just hoarding cash. Official figures show that, in the year to March, non-financial firms operating in the UK retained £169.5bn of profits after paying taxes and dividends. But only £108bn – less than two-thirds – was invested in capital equipment and new premises. A large chunk of the rest - £31.7bn – was stuck into cash.Chris Dillow, "Marxist Markets", Investors' Chronicle 14 september
One reason for this is that smaller companies especially are not confident that credit will be available if they need it, so they feel the need to hold lots of liquid working capital.
But there's another reason why firms aren't investing. It's the same reason why stock markets aren't anticipating future growth – they don't believe that there are good profit opportunities."
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Uppdatering 6 oktober
Robert Parker, en rådgivare till Credit Suisse, skriver i FT om företagens högar med cash och huruvida de kommer sätta sprätt på dem. Han börjar med att konstatera att "investor sentiment is more negative than at any time over the past 30 years", och att frågan är vilka reformer och händelser som kan vända stämningen och få folk att investera igen. Han diskuterar en mängd reformer framför allt om eurozonskrisen, som en ny haircut på Grekland, större EFSF osv.
Parker skriver ur ett investerarperspektiv och formulerar sig bland annat så här:
"the key to markets over the next few months is whether elevated cash levels are reduced; monitoring investor cash positions therefore remains critical but gauges such as the Vix volatility index and corporate and financial bond spreads may also be good forward indicator"Parker, "What will persuade investors to dump cash piles?", FT 5 oktober
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Uppdatering 10 oktober
Thomas Franzén, ordförande för regeringens Finanskriskommitté och tidigare bl a ordförande för Riksgälden, har en väldigt intressant debattartikel i SvD idag på detta tema:
"Att världen återkommande drabbas av finansiella kriser hänger starkt samman med företagens avkastningkrav.Thomas Franzén, "Företagens krav har skapat krisen", SvD brännpunkt 10 oktober 2011
De flesta företagen har satt upp mål på 15–20 procent. Dessa mål styr vilka investeringar som genomförs. Med bonussystem drivs företagsledningar att uppnå avkastningsmålet, samtidigt som inflationen sjunkit de senaste decennierna, vilket ökat de reala kraven. Om företagen ser till att ha så litet eget kapital som möjligt och bara väljer de mest högavkastande investeringarna kan de öka avkastningen. De kan då öka sina utdelningar och återköpa aktier. Aktieägarna får då pengar som de kan investera på nytt.
Men avkastningsmålen utgår från att företagen inte ska be börsen om mer kapital. Detta innebär att efterfrågan på aktier stiger samtidigt som utbudet på aktier inte ökar. Följden blir att aktierna stiger i värde. Bubblan börjar.
Processen stannar inte där. Ägarna – ofta fonder – försöker finna andra marknader med en avkastning i nivå med företagens finansiella mål. För att nå en sådan avkastning måste risktagandet öka. Asienkrisen på 1990-talet och it-kraschen vid millennieskiftet byggdes upp av dessa investerar- beteenden. Subprimelån, lån till låntagare med låg kreditvärdighet, är det senaste uttrycket. /.../
fortfarande strävar företag efter att komma tillbaka till gamla höga avkastningsmål, vilket håller tillbaka tillväxt och sysselsättning. Jag är övertygad om att kraven måste komma ner på nivåer som ligger närmare ekonomins tillväxt och den långsiktiga räntenivån innan vi får en marknad i samklang med god långsiktig industriell tillväxt."
se också Franzéns artikel "Bolagens vinstmål är en orsak till finanskriser" (pdf), Ekonomisk Debatt nr 4 2009
jfr: Kevin Daly och Ben Broadbent, "The Savings Glut, the Return on Capital and the Rise in Risk Aversion" (pdf), Goldman Sachs Global Economics, Commodities and Strategy Research, 27 maj 2009
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Uppdatering 4 januari 2012
"Bin Jiang and Tim Koller of McKinsey estimate that European and US companies hold about $2tn of surplus cash, defined as the amount outstanding over and above operating cash, which is deemed to be two per cent of revenue. The question is how these cash balances will be deployed. /.../John Plender, "Don't expect economic boost from cash-rich companies", FT 3 januari
I suspect, too, that the English-speaking countries may be moving to a new, low-investment paradigm and not merely because, as in the case of the UK, they have a service sector bias. The practice of rewarding executives increasingly with equity is imposing a far greater focus on short-term measures of performance. Academic evidence in the US has, for example, shown that a high proportion of chief financial officers admits to a willingness to sacrifice economic value to meet short-term earnings targets. The current record profit margins and exceptionally high unemployment reflect that ruthless focus.
The capital market culture of these countries also has a strong emphasis on merger and acquisition activity which, from a managerial perspective, substitutes the thrill of the chase for the hard slog of managing operating businesses and investing in fixed capital. Business becomes transactional at the expense of relationships and performance is seen in narrowly financial terms. Far too many of the deals fail in economic terms, partly because stock options and rewards for failure give managers a huge incentive to bet the ranch.
That brings us to the most likely outlet for all that corporate cash. Much of it will go into share buy-backs, which are relatively painless for managers since, unlike dividends, they entail no continuing commitment to pay. Part of this activity will be arbitrage because corporate bond yields for many companies are now below the yields on equity."
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Uppdatering 7 januari
Jason Voss tittar på statistiken för företagens högar med pengar, och hävdar att diskussionen om för stort företagssparande i USA förvridits av att man bara jämfört tillbaka till 2008, ett år med ovanligt lågt sparande:
"The usual discussion of the corporate cash mountain compares growth on a year-over-year basis. According to the Federal Reserve’s Flow of Funds Guide published in mid-September, at the end of the second quarter of 2011, U.S. nonfinancial corporations held liquid assets of $2,047.1 billion, up 24.37% over the prior year. At a time of negative real interest rates, this rate of cash accumulation certainly does seem alarming.Jason Voss, "Is the Mountain of Corporate Cash an Illusion?", del 1, del 2, CFA Institute Enterprising Investor blog, november 2011
But is it really? The answer, it turns out, is probably not. In fact, most of the alarm about excess cash accumulation seems to be a simple artifact of how the U.S. Bureau of Economic Analysis and the Federal Reserve report their data: Both organizations publish numbers in press releases going back only to 2008. To analyze a longer sweep of history, analysts and commentators would need to dig deep into both organizations’ websites, and it seems that few do. Instead, they have anchored to year-end 2008 data as the basis of comparison — a period when cash balances were artificially low. At the time, with short-term credit markets seizing up and U.S. corporations suffering through the worst economic quarter since the Great Depression, many businesses dramatically drew down cash balances in an effort to maintain their operations."
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Uppdatering 8 januari 2012
Adam Ozimek, "Why do corporations hold so much cash?", Modeled Behavior 7 januari
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Uppdatering 31 januari 2012
John Authers har en lång och intressant artikel om US-amerikanska företags högar med cash i FT:
"Call it the $1,700bn problem. Companies in the US are flush with cash and are paying out a smaller proportion of their earnings as dividends than ever before. Much the same can be said for western Europe. Governments and households on both sides of the Atlantic are meanwhile strapped for cash. This cannot persist much longer. /.../John Authers, "Hordes of hoarders", FT 29 januari
At present, cash accounts for more than 6 per cent of the assets on the balance sheets of US non-financial companies. That is the highest in at least six decades, and represents the fruit of record high profit margins. Companies cut costs through redundancies during the post-Lehman economic swoon, while negligible interest rates reduced their borrowing costs. As a result, US corporate profits are higher, as a share of gross domestic product, than at any time since 1950.
But as uncertainty persists, groups are reluctant to repay that cash to shareholders by buying back stock or – particularly – paying dividends. The pay-out ratio (the proportion of earnings that go in dividends) for the S&P 500 index is at its lowest since 1900.
Why? For years, investors have not pushed the issue. Academic theory says they should not care whether cash is paid out or left on the balance sheet. Either way, it belongs to them. “There was a time in the 90s when dividend was a four-letter word,” says Jim Cullen, a Boston fund manager. “They were for old ladies.”
James Henderson, a fund manager for Lowland Investment Company, a UK investment trust, puts it another way. “Companies held back on dividends to make themselves look more like growth stocks,” he says. Then came what he depicts as “a return to the roots of equity investing, which was that you put your money into a venture and then you harvested your return – and that return didn’t depend on whether the price of the asset had gone up recently”. /.../
Managing “for cash” makes sense if the economy grows slowly, as it is hard for revenues to grow. But while this might keep investors happy, governments would feel differently. Politicians want companies to grow, to create jobs and to generate the tax revenues needed to plug their deficits.
“We are seeing a symbiotic relationship between government ‘borrowing’ and corporate ‘saving’ the likes of which has rarely been seen before,” says Ian Harnett of Absolute Strategy.
Governments could yet respond by raising corporate taxes, tweaking them to encourage spending, or increasing dividend taxes. But it will be hard to cut public deficits without some aid from corporate cash, which investors want paid to them. Neither option – a heavily taxed corporate sector or one that pays out cash rather than reinvesting it – is conducive to capitalism at its most vibrant."
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Uppdatering 6 februari 2012
John Cochrane:
"There is a lot of puzzling why people and companies are sitting on so much cash. Well, at zero interest rates, the opportunity cost of holding cash is zero, so it's a wonder they don't hold more. This measure of velocity is tracking interest rates with exactly the historical pattern."Cochrane, "A brief parable of over-differencing", 26 januari
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Uppdatering 9 februari
"Much has been written about how the developed world must tackle its structural budget deficits. But the link that remains to be properly recognised is that the counterparts to those ‘unsustainable’ public-sector budget deficits are equally ‘unsustainable’ corporate-sector surpluses.David Bowers, joint managing director of Absolute Strategy Research, "Watch out as sovereigns eye company cash piles", FT 8 feb
The conventional wisdom believes that the current sovereign debt crisis is the result of governments having been too profligate. But it is not that governments have been spending ‘too much’ that is the problem; it is that corporates have been spending ‘too little’. Moreover, because this corporate saving is the main counterpart to the government’s borrowing, until companies start to spend again, the burden of fiscal adjustment will have to fall on cutbacks in public services and higher personal taxation. It is time to shift the debate away from talking about the fiscal position, and focus instead on whether it is a shift in corporate behaviour that is responsible for the fiscal mess in the developed world. /.../
Investment-to-gross domestic product ratios in the developed world are now close to the lowest levels seen in 60 years. Corporates appear to have decided to run themselves for cash, and not for growth. /.../
In the Reagan-Thatcher era, politicians cut taxes so that companies would come to their country, invest, create jobs … so that those politicians could, in turn, be re-elected. It does not work like that anymore; globalisation has seen to that. The reality is that public services used by the ‘99 per cent’ are taking the strain, while attractive corporate tax regimes are protected. Just as the trade-union barons of the 70s failed to see the writing on the wall, so the global captains of industry may suffer a similar fate unless they put their cash to work in the countries in which they are domiciled. "
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Uppdatering 29 mars 2012
Cardiff Garcia på FT Alphaville konstaterar att företag i USA faktiskt spenderar mer på utdelningar och att köpa tillbaka aktier, än vad de drar in i vinst. Diagram:
"Whatever happens, that is still an awful lot of liquidity in search of investable ideas."
Cardiff Garcia, "US corporate cash stat of the day", FT Alphaville 27 mars
Garvia, "A US corporate cash update", FT Alphaville 14 mars
Och Chris Dillow har fortsatt sin fördjupning i relationen mellan vinster och investeringar. Dillow:
"The key question is: what is the link between capitalist investment (and hence economic growth) and profit margins?"Stagnationism, exhilarationism and beyond", 25 mars
In the 50s and 60s, the link was positive. Social-democratic efforts to main full employment tended to squeeze profit margins. But this promoted investment because low profit margins were accompanied by high (expected) aggregate demand and high profit rates; this is what Marglin and Bhaduri called a stagnationist regime.
But in the 70s, this broke down. The profit squeeze no longer promoted aggregate demand, so profit rates fell and investment and growth slowed.
The solution - which Thatcherism and neoliberalism stumbled upon in the 80s - was union-busting, welfare-eroding government. In creating mass unemployment, profit margins were restored and with them investment and growth. We had, in Marglin and Bharduri’s words, an exhilarationist regime.
Which brings us to our current plight. The exhilarationist regime might have broken down, just as the stagnationist one did in the 70s. Neoliberalism no longer promotes investment. /.../
what lies beyond exhilarationism? The right’s answer is: nothing. It assumes that tax breaks and diminishing the welfare state will re-ignite investment. The statist left’s answer is that we‘re seeing a return to stagnationism, in which case fiscal expansion and wage-led growth will work. But what if they’re both wrong?"
"the difficulty of monetizing new innovations means that the profit motive is no longer sufficient to promote investment. This would be consistent with (though not proof of!) Marx’s prediction that capitalism would eventually retard economic growth:"Capitalists on strike", 28 mars
'At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production…From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution.'"
Uppdatering 17 juli 2012
David Cay Johnston, "Idle corporate cash piles up", reuters 16 juli
Uppdatering 11 februari 2013
Paul Krugman, "Corporate Hoarding and the Slow Recovery", 8 februari
Noah Smith, "The corporate cash puzzle", 10 februari
Uppdatering 30 juli 2013
Denna diskussion har nu nått Sverige! I förra veckan rapporterade Ekot att svenska börsbolag har 150-200 miljarder på hög.
"Under krisen har bolagen gnetat och sparat och kapat kostnader. Men inte ökat i volym. Alltså har de inte behövt investera i produktionen och nyanställa.Ekot, "Börsbolagen vadar i pengar", 25 juli
Man skulle kunna tro att bolagen i den här situationen vill växa genom att köpa upp andra. Men det händer inte heller, säger Jerker Söderström. [aktiestrateg på Swedbank]
– Det här riktigt klockrena förvärven finns egentligen inte där ute.
Alltså, nu måste snart aktieutdelningarna öka.
– Det blir svårt att förklara varför man ska så ineffektiva balansräkningar. När det inte finns förvärvskandidater finns det egentligen inget annat alternativ.
Många chefer är helt enkelt brända av finanskrisen, säger Richard Wahlund, som är professor i företagsekonomi och expert på ekonomisk psykologi.
– Absolut, det är ju individer som sitter i styrelser och ledningar de agerar i stor utsträckning som vilken människa som helst.
Pengarna finns men inte framtidstron. För eller senare vänder det förstås. Men inte än."
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