Tuesday, June 12, 2012

Poof! Cash on the Sidelines Disappears

Through Q1 2012, nonfarm nonfinancial corporate businesses held $1.74 trillion in liquid assets on their balance sheets. In the latest revision, nearly half a trillion dollars of cash disappeared.
Where did the cash go? It disappeared as the Federal Reserve is now saying it never existed in the first place.

Read it at The Big Picture
By James Bianco

So much for the bullishness of excess cash sitting on corporate balance sheets. This is a perfect example of the importance in maintaining a healthy level of skepticism regarding data. That data can be revised to this degree in the US should definitely provide reason to pause when considering economic data from China, which is never revised.     

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