Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: LLCF who wrote (52922)	9/2/2004 3:08:22 PM
From: energyplay	Read Replies (1) of 74559

More on cash/debt - bond holders are pretty comfortable when cash is 11-13% of total debt (much is long term) - spreads over treasuries tend to have narrowed with that level of cash. Note that the interest rate on the debt is much lower than 1988, and companies are continueing to pile up cash and/or reduce debt - should generate cash in range of 4-6% this year. The money will need to go somewhere. I expect enough will show up as hiring, especially as 2005 looks better. 2005 was expected to be a major down year- now at worse it should be flat. This will bea big change in expectation. Oil prices, interest rates, terrorism have all been bad - now thay will look slightly better.

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