Cash hoarding, profitability and debt


Michael Roberts Blog

J.P. Morgan Chase & Co. has reached a tentative deal to pay a record $13 billion to the Justice Department to settle a number of outstanding probes of its residential mortgage-backed securities business, according to a person familiar with the decision.The deal, which was struck Friday night, doesn’t resolve a continuing criminal probe of the bank’s conduct, which could result in charges against individuals or the bank itself and possibly increase the penalty tab. The two sides continued to disagree over an admission of wrongdoing that would end the criminal probe and decided instead to resolve the civil allegations related to the mortgage securities.

In previous posts, I have noted the apparent conundrum of corporate sectors in the US, the UK and other major capitalist economies having apparently large cash reserves from accumulated profits which they are failing to invest in new plant or equipment technology (http://thenextrecession.wordpress.com/2013/10/19/the-fallacy-of-causation-and-corporate-profits/).  In…

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