Uncertainty about U.S. default leads companies to hoard cash

07/27/2011 | Wall Street Journal, The

Businesses are keeping cash in preparation for a potential U.S. government debt default. The possibility of default once seemed remote, but the continued gridlock in Washington has prompted companies to preserve liquidity and delay hiring and investment. "This debt imbroglio is just giving companies another excuse not to do much," said Joseph LaVorgna, Deutsche Bank's chief U.S. economist.

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