David Simon, CEO of Twin Capital Management, a New York-based event-driven hedge fund, provided the following market commentary:
“German Chancellor Angela Merkel dashed market hopes for a solution to the Greek crisis with Germany’s proposal of placing Greece under the careful watch of an EU budget czar. While Europe continues to debate how to resolve the Greek crisis and prevent other EU economies (Portugal, Ireland, and Spain) from similar fates, American CFO’s hold tight to their corporate wallets.
Until a clear roadmap emerges of how Europe solves their debt problems, American companies will continue to spend their cash very cautiously. Right now non-financial U.S. companies hold more than two trillion in cash and other liquid assets. That’s the highest share of cash on their balance sheets in nearly a half century. Once this European debt crisis is completely resolved, I would expect a large portion of this cash to be released into the Mergers and Acquisition space resulting in one of the biggest M&A booms since the year 2000.”