More on Cash Levels at Firms and Other Things

A few days ago, this article appeared int he WSJ:

Whitehouse, Mark, Walker, Marcus, Lublin, Joann S., 2010. Waning economic recovery fuels global uncertainty. The Wall Street Journal, Sept. 12.

I found this quote particularly interesting in that it is a fundamental indicator of the economic outlook for the Midwest:

"At Duke Energy Corp., which supplies electricity to many manufacturers in the Midwest and Southeast, Chief Executive Jim Rogers says that despite an initial rebound, he doesn't expect industrial sales to 'claw back' to prerecession levels until 2014. Over the past 30 years, he says, 'there has never been a recession where the recovery has been so anemic as this one.'"

It is also interesting that American companies are maintaining a very high cash balance.

From the article:

"The U.S. has ample resources to restimulate the global recovery. U.S. companies are sitting on some $1.8 trillion in cash—the highest level, as a share of their total assets, since 1963. If and when uncertainties over income taxes, health care and government policy clear up, companies could grow confident enough to deploy that cash to hire workers and invest in new projects. That, in turn, could inspire U.S. consumers to return to the malls."

I think with time the American economy will achieve rapid growth again. folks need to be patient.