, Columnist
The Great Corporate Cash Shell Game
Stockpiles of liquid assets aren't a safety net.
This article is for subscribers only.
There’s a mystery hidden on the balance sheets of Corporate America: These companies have a record amount of cash and they’re more deeply indebted than ever before.
This seems paradoxical and kind of silly. Why raise money from bond investors when you already have the liquid assets on hand? As Bloomberg News reported Thursday, non-financial companies' liquid assets, which include foreign deposits, currency as well as money-market and mutual fund shares, reached a record of almost $2.3 trillion in the second quarter. That's an increase of nearly 60 percent since mid-2009. This cash cushion also appears sort of comforting; companies can do whatever they want. They're rich.