{"id":38534,"date":"2013-05-24T11:50:53","date_gmt":"2013-05-24T15:50:53","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=38534"},"modified":"2013-05-24T11:50:53","modified_gmt":"2013-05-24T15:50:53","slug":"if-the-economy-is-improving-why-are-business-executives-so-scared-to-spend","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/05\/24\/if-the-economy-is-improving-why-are-business-executives-so-scared-to-spend\/","title":{"rendered":"If the Economy is Improving, Why Are Business Executives So Scared to Spend?"},"content":{"rendered":"

As I have been writing in these pages, economic growth in the U.S. economy<\/a> won\u2019t happen by printing more paper money\u2014it\u2019s a short-term fix that creates more long-term problems.<\/p>\n

According to data compiled by Bloomberg, 2,267 non-financial constituents of the Russell 3000 index saw their cash holdings increase by 13% to $1.73 trillion in the first quarter of 2013 compared to the same period a year earlier. (Source: Bloomberg, May 23, 2013.)<\/p>\n

As the cash hoard continues, business spending declined 21% in the first quarter compared to the last quarter of 2012. This was the biggest decline since the financial crisis of 2008.<\/p>\n

To top this off, business executives in the U.S. economy are worried about troubles in the global economy, and they don\u2019t have a very optimistic view on conditions here at home. A CEO Confidence Survey conducted by the Conference Board suggests only 29% of executives believe conditions in their industries have improved in the first quarter; going forward, only 32% expect the U.S. economy to improve in the next six months. (Source: Conference Board, April 25, 2013.)<\/p>\n

Looking at all of this, how can you not question the effectiveness of quantitative easing in the U.S. economy? The problem at hand is businesses shying away from spending in the U.S. economy and hoarding cash. To my standards, quantitative easing is failing at making businesses more confident about spending as it was promised.<\/p>\n

Dear reader, for economic growth to take place in the U.S. economy, businesses must be willing to spend and make investments; we are seeing the opposite of that. This isn\u2019t rocket science; once businesses start to spend and make investments, we will see recovery in the jobs market<\/a> and economic growth will eventually follow.<\/p>\n

The U.S. economy is at a vulnerable stage. I am paying extra attention to business spending because troubles from outside the U.S. economy are brewing quickly, and as a result, multinational businesses may make further cutbacks on their spending.<\/p>\n

Where the Market Stands; Where It\u2019s Headed:<\/b><\/p>\n

We are putting the finishing touches on \u201cA Dire Warning for Stock Market<\/a> Investors,\u201d a forecast we will present in video format. Please see your e-mail inbox tomorrow for this presentation. It\u2019s important you watch it to see where the stock market is really headed next.<\/p>\n

What He Said:<\/b><\/p>\n

\u201cAs for the stock market, it continues along its merry way oblivious to what is happening to homebuyers\u2019 wealth. (Since 2005 I have been writing about how the real estate bust would be bigger than the boom.) In 1927, the real estate market<\/a> crashed and the stock market, even back then, carried along its merry way for two more years until it eventually crashed. History has a way of repeating itself.\u201d Michael Lombardi in Profit Confidential<\/i>, November 21, 2007. This was a dire prediction that came true.<\/p>\n

Article by profitconfidential.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As I have been writing in these pages, economic growth in the U.S. economy won\u2019t happen by printing more paper money\u2014it\u2019s a short-term fix that creates more long-term problems. According to data compiled by Bloomberg, 2,267 non-financial constituents of the Russell 3000 index saw their cash holdings increase by 13% to $1.73 trillion in the … <\/p>\n

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