Holding on to cash

There've been a lot of reports floating around about US companies stockpiling cash. Anyone want to explain this to me? In a period of historically low interest rates, with Fed pressure to raise rates evident, and even Microsoft returning cash to its shareholders, why would you be stockpiling cash?

This is the time for companies to be taking on debt (at healthy levels), since you can be almost certain that the debt will be worth less in the future than it is today.

My take on the real reason? Because investors are too scared to go for anything less than a slam dunk these days and post-Enron all debt is considered bad. With so many executives being compensated by options and shareholder discount programs they want to raise the stock price at the expense of efficient capital allocation. You do this today by cleaning up the balance sheet and squeezing operational efficiencies. No one trusts a growth story anymore.