Big Business Starting to Spend Hoarded Cash…to Buy Back Own Stock, Not Create Jobs
Monday, October 11, 2010
Interested more in pleasing Wall Street than helping Main Street, some of the biggest American corporations are spending hundreds of billions of dollars to buy back their own stocks, rather than invest in new products or services that would mean hiring more people.
After sitting atop of more than $1 trillion in cash, much of it borrowed at near-zero interest rates from the Federal Reserve, big business is spending money on share buybacks, in order to satisfy investors. To date in 2010, companies have committed $273 billion towards purchasing their own stocks.
Last month, Microsoft borrowed $4.75 billion to buy back shares, while continuing to sit on nearly $37 billion in cash held in overseas operations. Hewlett-Packard plans to spend $10 billion buying its shares, and Pepsico intends to acquire $15 billion of its common stock over the next three years.
U.S. Companies Buy Back Stock in Droves as They Hold Record Levels of Cash (by Jia Lynn Yang, Washington Post)
While Small Businesses Struggle to Find Loans, Big Corporations Borrow Big and Hoard (by Noel Brinkerhoff and David Wallechinsky)
Banks Hoard $1 Trillion in Reserves…and the Federal Reserve "Solution" (by Noel Brinkerhoff, AllGov)
- Top Stories
- Unusual News
- Where is the Money Going?
- U.S. and the World
- Appointments and Resignations
- Latest News
- 9 American Insiders Who Opposed Bush Torture Program
- Sen. Coburn Blocks Funding for Veterans Suicide Prevention Web Site
- Social Security Administration Still Collecting Debts from Children of Overpaid Recipients Despite Promising to Stop
- Nominee for U.S. Ambassador to Norway Gives Up; Who Was George Tsunis?
- Lax Oversight of Americans Lobbying for Foreign Governments