excess liquidity

US companies: When having too much money is a bad sign (I)

WASHINGTON | By Pablo Pardo | In the 1Q14, companies at Standard and Poor’s 500 spent more money to repurchase shares in comparison to the profits they had made during that period. And  third quarter data point in the same direction. Large American firms do this for several reasons, such as inflating their share price –because, the fewer number of shares, the more profits per share they’ll have, which in turn benefits  managers, who receive financial compensation in the form of company shares.