Apple announced a new operating system, and the price is $30. Not $90 anymore, $30. This is good news. Good big businesses like Apple are helping our economy recover.
Elsewhere. like the Wall Street Journal, a reporter has noted US Corps are sitting on nearly a trillion in cash reserves, and if an when this is released, (invested in new plant and equipment) we'll see an economic expansion like no other.
So cash sits idle—even as interest rates, after inflation, are so low that cash often produces negative real returns.
And then of course, the article goes on to blame Obama for Bush policies and then claim a lot of it is left overseas due to USA tax policies. Sigh.
A lot of it is earned overseas because of USA tax policies, which subsidies sales overseas and then rewards corps to money launder other profits overseas.
Mish Shedlock has already, and several time, pointed out why this "cash on hand" is so misleading. The cash on their balance sheet is borrowed money. It represents bonds sold. So it is not cash from profits from operations, it is just a huge debt.
Econ 103: you get wealthy from savings, not debt. If this money was savings, then great. It might do wonders. But it is not. Unloading it will be a race to the bottom, Quantitative Easing Number 12 or something by the time it happens. The article cited, with disapproval, that Microsoft way overpaid 8.5 billion for Skype. Exactly. Easy come easy go. Like a homeowner with cheap and easy credit, people overpay, and prices shoot up. (Not to mention Microsoft will ruin Skype and make it useful only to people who want to waste time.)
Apple invests from its profits and zooms forward. Most other US industry sells bonds and sits on debt. But Apple gets investigated. We are such a lawless country!
Tuesday, June 7, 2011
Falling Prices - More Good News
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