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Finding Signs of Health

October 5, 2009 – 12:12 pm

Everyone knows about our dysfunctional economic system, the very poor jobs market, the struggling housing market, and banks that are closing weekly. What no one is paying any attention to is the real strength of the balance sheets for Corporate America outside the banking industry. A recent article in Barron’s spoke to this issue.

 

These companies have the financial ability to kick start our economy in the form of mergers, expansion and money for research and development. In times of economic stress large corporations position themselves to take advantage of the eventual recovery.  With their cash horde and pristine balance sheets this cycle, unlike the Dot.com recessionary cycle, they can take the role of the catalyst we need. The consumer will be part of that roll but the consumer will not return to his/her old ways. They will and have begun to save again and I think that is a long term shift that is healthy and needed.

 

We need business investment and the government can take steps to spur that along with various tax incentives. The question is will they?

 

Good Trading

Steve Peasley

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