For Companies, Cash Is King

Confronting financial insecurity, companies are keeping more cash on hand than in any time in the past 40 years. In the second quarter, American firms held nearly $1 trillion in cash, up from $876 billion earlier this year. Google, Pepsi, and Texas Instruments all reported higher cash holdings in the last quarter. According to the Wall Street Journal, the cash hoarding is a blessing and a curse: saving more means companies are investing less, damping economic growth, but when the economy does turn around, companies will have more money on hand for hiring and capital expenses. It doesn't look like the cash caches will disappear any time soon. Said Alcoa's chief financial officer, "They'd have to beat me over my head to get it out of my hands."