The CEO, Steve Appleton, of Micron a corporation that makers semiconductors and flash memory died in a plane crash on Friday morning. His death caused the shares of Micron, which are traded on the Nasdaq were halted due to the news. Appleton was on the board of the Semiconductor Industy Association and he was given the highest honor by the trade group last year. He has worked at Micron since 1983 and held several positions in that time. He was named president and chief operation officer in 1991 and became chairman and CEO in 1994.
Micron was founded in 1978 in Boise and it became a public company in in 1984. It was ranked number 287 on the 2011 Fortune 500 list, and employs over 20,000 full-time employees. This is the second plane crash that has killed a high profile executive. In December a plane with two executives from Green-hill & Company were killed in a crash. Appleton's death is a major loss to the company, which is already struggling with slow computer sales and declining prices.
One article summarized it "The loss of Micron's top dealmaker could waylay a possible acquisition of troubled Japanese rival Elpida Memory. Saddled with millions of dollars in operating losses and major upcoming debt payments, Elpida may be in talks to be bought by Micron or reach some kind of partnership, media recently speculated."
What do you think Steve Appleton's death will due to Micron? Will they be able to cope with the sudden loss of their longtime CEO? Will Micron's possible acquisition be stopped due to this loss? What have other major companies done when they have suffered a loss of their CEO?
Read the article here.
CNN's article
Sunday, February 5, 2012
Economic Impact of the Super Bowl
http://www.thestarpress.com/article/20120205/BUSINESS/202050304
I'm sure all of you are aware that today is Super Bowl Sunday, and that means that the majority of American sports fans will be going out and spending money on hilarious amounts of food and beverages. I read an article this morning talking about the economic impact that the game had on its host cities since the 60's. An economist who has compiled the numbers for each Super Bowl predicts that this years game will bring in between $325-$415 million into the city of Indianapolis. This is such a large amount of money for people to be spending in basically one day. I am curious as to how the money was spent in Detroit a few years ago.
I'm sure all of you are aware that today is Super Bowl Sunday, and that means that the majority of American sports fans will be going out and spending money on hilarious amounts of food and beverages. I read an article this morning talking about the economic impact that the game had on its host cities since the 60's. An economist who has compiled the numbers for each Super Bowl predicts that this years game will bring in between $325-$415 million into the city of Indianapolis. This is such a large amount of money for people to be spending in basically one day. I am curious as to how the money was spent in Detroit a few years ago.
The point of taxation is to raise revenue
But even tax experts are depressed over the present chaotic state of our tax system. (see here)
"Our tax system is a mess and unless we send a clear signal to Congress to do something about it, it’s just going to get messier and messier. As Bruce Bartlett writes in his book, The Benefit and The Burden, the tax system is like a garden. It gets overgrown and chaotic unless you regularly clean it. Well, we’ve got an eyesore now and need to bring in a bulldozer.
Here’s what leaves me distraught. Sixty temporary tax provisions expired at the end of 2011. Congress enacted each with an expiration date and has subsequently extended almost every one. Most of these “temporary” provisions—nicknamed “extenders”—have been repeatedly extended."
So instead of maintaining a tax system that raises sufficient revenue for government operations, we have a system that plays favorites.
"Our tax system is a mess and unless we send a clear signal to Congress to do something about it, it’s just going to get messier and messier. As Bruce Bartlett writes in his book, The Benefit and The Burden, the tax system is like a garden. It gets overgrown and chaotic unless you regularly clean it. Well, we’ve got an eyesore now and need to bring in a bulldozer.
Here’s what leaves me distraught. Sixty temporary tax provisions expired at the end of 2011. Congress enacted each with an expiration date and has subsequently extended almost every one. Most of these “temporary” provisions—nicknamed “extenders”—have been repeatedly extended."
So instead of maintaining a tax system that raises sufficient revenue for government operations, we have a system that plays favorites.
Saturday, February 4, 2012
Low tax payments for US companies
http://bottomline.msnbc.msn.com/_news/2012/02/03/10309301-if-you-thought-romneys-taxes-were-low-wait-until-you-see-what-companies-pay
I found this article about companies who have gotten away with paying taxes under 13% of what they earned domestically. This article discusses how this is a lower amount paid by Romney. I can't believe that there are companies getting away with practices like this. I really think they are doing the American people an injustice by contributing such a small amount to the tax fund when normal people are putting so much of their hard earned money into the system.
Warren Buffett is not the Oracle of Public Finance
It was reported on January 30, 2012 that Senator Sheldon Whitehouse of Rhode Island is introducing a bill that would impose a minimum 30% tax on individuals earning more than $1 million per year. This type of tax policy has been dubbed the "Buffett Rule" due to the news last year that Warren Buffet had a lower tax rate than his secretary. He claims to have a tax rate of 17.4%. His claim is true only if one ignores one of the most basic economic principles of tax analysis: that the person who writes the check is not necessarily the same as the person that bears the economic burden of the tax. The article goes on to explain that this distinction is known as the difference between "legal incidence" (the entity with legal responsibility for paying taxes) and "economic incidence" (a measure of who really bears the economic burden of the tax). The discussions surrounding this new bill have focused solely on the legal incidence of the personal income tax system and have failed to think through the economic incidence of the overall tax system. Warren Buffett receives most of his income from dividends and capital gains which are taxed differently.
There are a number of problems with this new bill, the most important being that it would exacerbate the already existing tax distortion that favors debt over equity. Should we allow Congress to justify this potentially bad tax policy on the basis of naive and misleading understanding of tax incidence?
(Read entire article here)
Dow at 4-year high, Nasdaq hits 11-year high
Yesterday, the US stocks hit a high after a long gap. The Dow Jones gained 1.2%, S&P added 1.5% and Nasdaq went up 1.6%. This has brought Dow to the highest level it has been since the 2008 recession. Nasdaq is at its highest level in over 11 years. The articles says that these high levels are being reached with the help of the dropping unemployment rate, which is at is lowest since 2009.
These increases seem unexpected because economist expected a slow-down after the holidays, but instead we are reaching renewed highs. Marc Chandler said, "The jobs data blew away market expectations. This coupled with other recent reports for January, show the year has begun off on a firm note." The article goes on to show other companies who experienced a spike, but looks at a couple who did not and are still working to meet expectations.
The article talk about changes in currencies and commodities prices. The US dollar fell against the Euro and British pound but rose versus the Japanese yen. Oil has risen $1.48 (97.84 a barrel).
What do you think? WIll we continue to see a steady rise or should we expect a fall in the near future? Also what do think this means for the world markets, will they continue to rise too?
find the article here.
These increases seem unexpected because economist expected a slow-down after the holidays, but instead we are reaching renewed highs. Marc Chandler said, "The jobs data blew away market expectations. This coupled with other recent reports for January, show the year has begun off on a firm note." The article goes on to show other companies who experienced a spike, but looks at a couple who did not and are still working to meet expectations.
The article talk about changes in currencies and commodities prices. The US dollar fell against the Euro and British pound but rose versus the Japanese yen. Oil has risen $1.48 (97.84 a barrel).
What do you think? WIll we continue to see a steady rise or should we expect a fall in the near future? Also what do think this means for the world markets, will they continue to rise too?
find the article here.
Friday, February 3, 2012
Payroll-Tax Cut Backup Plan Prepared
Senate Democrats are devising a backup plan to extend a payroll tax cut and emergency unemployment benefits set to expire at month’s end if negotiations with the Republican-controlled House don’t lead to a deal.
President Barack Obama's top economist called on Congress to extend these payroll tax cuts and unemployment benefits which he said would help maintain economic momentum.
"If Congress does follow the president's call to extend the payroll tax cut and to continue the extended unemployment benefits, that will help maintain this momentum (and) the economy will be stronger going forward," Krueger told Reuters Insider on Friday.
Data released earlier on Friday showed the U.S. unemployment rate dipped to 8.3 percent in January and the economy created new jobs at the fastest pace in nine months, in welcome news for Obama as he seeks re-election later this year.
Majority leader Harry Reid declined to provide details on how the package would be financed, saying “we are not going to discuss how we are going to pay for it.”Reid declined to provide details on how the package would be financed, saying “we are not going to discuss how we are going to pay for it.”It is great news to see that the unemployment rate has dipped so low. Do you think that extending these tax cuts and unemployment benefits will help maintain economic momentum? Is it bad that they are not discussing how these benefits will be financed?
(Read entire article here)
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