January 2011 archive

IMF Continues to Criticize U.S. Fiscal Policy

A speech by the International Monetary Fund’s First Deputy Managing Director (John Lipsky) at the American Economic Association Annual Meeting on “The United States in the World Economy” provided continuing warnings about U.S. fiscal policy.  This was not the first such warning. For example, last summary, the IMF effectively reported that the U.S. is Broke. …

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Financial Crisis Inquiry Report is a Big Disappointment

Last Thursday, the Financial Crisis Inquiry Commission delivered the results of its nearly two-year-long investigation into the causes of the financial and economic crisis.  At 28 pages of summary, followed by 633 pages for the actual report, the entire document is overly and unnecessarily long.   The majority commissioners reach the following conclusions:  We conclude this …

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Many Workers Believe Social Security will become an Illusion

A survey conducted by the Employee Benefit Research Institute covered a broad range of retirement savings and planning topics.  The 2010 survey is the 20th annual study.  Generally, the current survey showed that record low confidence levels measured during 2008 and 2009 have bottomed out.  Retiree confidence also bottomed out, although there are only 19% of …

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CBO Releases Alarming Deficit Forecast

In his Tuesday State of the Union address, President Obama said: … understand if we don’t take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery—all of which would have an even worse effect on our job growth and family incomes.” The president …

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The Real Deal Behind Congress’ Pay

The heightened attention towards the Constitution and whether or not recent legislations abide by it or not is causing some to draft Constitutional amendments.   One of the suggested amendments is:   “Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 2.5%.”    At first glance, this may seem like …

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Adverse Inference Instruction for Failure to Preserve Text Messages

There are plenty of cases in which courts provided sanctions for a failure to preserve and produce relevant electronically-stored information (ESI).  But there are practically no such cases involving text messages.  As texting becomes more prevalent and important, this area will continue to evolve.  However, as a general proposition, there is usually not much relevant data …

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Social Security goes paperless…saves a bunch of trees and a ton of dough.

The Social Security program is undergoing several changes in 2011.  One seemingly benign change is that new recipients will be required to utilize direct deposit or have their payments loaded onto a prepaid Debit MasterCard (existing retirees have until March 2013 to make the switch).  No more paper checks…a fact which will put a smile …

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Foreclosure Court Ruling has National Importance

In two recent separate cases, Massachusetts’ highest court voided the seizure of two homes by Wells Fargo and US Bancorp.  The banks failed to show necessary documentation that they held the mortgages at the time they foreclosed.  This is the first such decision in the country.   Although the decision only directly affects Massachusetts, Massachusetts has …

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Steve Jobs’ Key Man Discount

The message boards are abuzz with the news of Steve Jobs’ (possibly) temporary medical leave of absence from Apple.  The obvious question is the impact of this news on Apple’s valuation.  For most large public companies with deep management, this is not an issue.  Relatively speaking, a single person’s importance usually affects only smaller companies, …

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Apple's Rollercoaster Two Days

In the span of just a couple of days Apple both announced another quarter of expectation-busting record profits and the fact that Steve Jobs would be taking another medical leave of absence.  Compared to his two prior medical leaves of absence this one ominously did not contain an expected duration.   Lets start with the upbeat …

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