Tuesday screencast: corporate cash

• abnormalreturns
• March 29th, 2011

Two years into an economic recovery there still remains a big disconnect between Main Street and Wall Street. This disconnect remains because the employment situation remains quite muted while corporate profits are at record highs.  In addition many see a buildup of cash on the balance sheet of American companies that could be used to expand and/or hire. The latest culprit in this case is corporate tax policy. The trend of American companies moving assets and/or workers overseas seems to be accelerating. Some US companies are calling for a reduction in US corporate tax rates to ease this disparity. There is also the issue of American companies holding cash in overseas subsidiaries that they cannot return to the US absent a big tax hit. Recently GE came under fire for their strikingly low tax burden. Expect this debate to continue as these tensions between Main Street and Wall Street grows.  In today’s screencast we look at the issue corporate taxation, cash on the balance sheet and the employment recovery.

Items mentioned in the above screencast:

Record corporate profits are not translating into hiring.  (Slate)

Cash on the balance sheet is not translating into hiring.  (NetNet, Market Talk)

Corporations are playing countries off against each other for lower taxes.  (Economist’s View, 60 Minutes)

The real scoop on GE taxes.  (Business Insider)

A daily price chart of GE (GE).  (Finviz)

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Tickers: GE

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