For Investors, Cash Is King

From the Wall Street Journal online:

"Investors, companies and small savers are stashing billions of dollars in plain-vanilla bank accounts, taking cash out of short-term markets, in an effort to shield themselves from any market convulsions caused by Washington's stalemate over the debt ceiling.

The movement of money, akin to that during the peak of the 2008 financial crisis, is one more sign that skittishness is on the rise as officials in Washington remain deeply divided about ways to reduce the deficit and lift the debt ceiling ahead of the Aug. 2 deadline...

Corporations are following the same route.

Glass and ceramics maker Corning Inc. has moved about 16% of its cash, or $1 billion of its $6.4 billion pool, into non-interest-bearing bank accounts insured by the FDIC over the past few weeks for fear that the Treasury bond market and other financial markets become volatile... (p)reviously, Corning invested all of its cash in Treasurys and money market funds that invest in Treasury bonds and other government-backed debt that matured in three months or less.

The $1 billion covers about three months of Corning's bills..."

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Link: http://online.wsj.com/article/SB10001424053111903635604576476551562186880.html