U.S. Economic Strength a Buffer Against Stock Market Declines

Stock markets in the U.S. and around the world have had a rocky week, triggered by economic problems in China. Investors everywhere are wondering when the market’s slump will end and how low prices will drop before they stabilize. The Miller Group’s CEO, Rudy Miller, discusses the situation and explains his perspective on the days ahead in this report.

Miller says that the current stock market slump is not unprecedented, “although it’s a major milestone.” Miller remembers the stock market crash of 1987 and says it was the last time he owned any stocks in his portfolio on margin. Margin calls very much affect the market at a time like this.

Rudy Miller

Rudy Miller

But, as Miller points out, “We’re sitting on a very solid U.S. economy.” The housing market is in excellent condition. There have been economic problems in China and Greece, but those problems have not damaged our economy. Europe has seen a huge influx of immigrants from Syria and from Africa, the largest since World War II. But the problems related to that immigration have not affected the U.S. economy.

There has been some concern about news that the Federal Reserve would raise interest rates by a quarter of a point in September. Miller does not see a prospective raise in interest rates as a problem. Miller points out that “We’ve had a zero-based economy for seven years.” But the proposed rate increase has already been “baked in” with Wall Street and America’s banks. The increase is largely symbolic. There may be some adjustments, but there will be no serious problems. Miller says that the U.S. “can’t have zero money forever and a $19 trillion dollar debt.” The Fed looks a host of data in making decisions. Miller believes that, among other things, the Fed looks at the S&P 500 in deciding what to do.

Any problems the U.S. suffers in the near term are not a financial crisis such as we had in 2008 and 2009. The real estate problems of that time are gone. Miller points out that, last year, 44% of all home sales “were cash deals.” In other words, home buyers can afford the homes they are buying, and they plan to live in those homes, not flip them as part of an investment scheme. There is a lot of investor money going into housing purchases.

Miller believes the Fed will move slowly and firmly going forward, avoiding the problem of “every ninety days rolling out another rate hike.” Miller reiterates that it is important for the U.S. to move forward from zero-based money, even though the low interest rate got us through the bad years and helped the economy to start moving forward again. Miller thinks the market will react positively to the interest rate increase because it shows that “we are slowly going in the right direction.” One of China’s problems is that it has in recent times had government-owned companies trying to prop up its stock market by using cash to buy securities instead of investing in the economy.

Miller is optimistic “and realistic” about the future of the stock market and the U.S. economy. He believes that the latest stock market correction has shaken loose “retail investors” who are not in it for the long run. Miller says he is “a long-term hold of good quality companies.” Their earnings are good, as are their ratios. But all money has to be invested somewhere. And the U.S. economy is not having a problem. There is presently an international economic crisis, but it is not an American economic crisis.

Rudy R. Miller is the Chairman, President, and Chief Executive Officer of The Miller Group as well as Miller Capital Corporation, an affiliated company The Miller Group, established in 1972. He was the Founder and Chairman of the Board of Miller Capital Markets, a FINRA member investment banking firm, from 2006 through 2012. He has over 35 years of executive-level experience owning, operating and advising corporations, from large NYSE listed public companies to emerging-growth private companies. His extensive operating and advisory experience provides clients with a comprehensive understanding into the challenges of successfully navigating a business through varying economic climates. The Legal Broadcast Network is a featured network of Sequence Media Group.

Should Football Fights Results In Legal Action?

NFL’s “Joint Practices” Have Turned into Slugfests; What Should the League Do?

LBN’s Jess Burke reminds us that a scuffle in the New York Jets locker room recently ended with Geno Smith getting a broken jaw and IK Enemkpali being thrown off the team. But the latest fight news in the NFL has come from what the NFL calls joint practices. If players can’t get along with their own teammates, Burke wonders, what can we expect in a joint practice session?

The joint practices and preseason games give fans and players a hint of what to expect come September, when the season starts for real. But during this week, Burke says, “players are literally taking things into their own hands.” Fistfights with the opposing team have broken out in joint practices between the Rams and the Cowboys, the Dolphins and the Panthers, the Texans and the Redskins, and the Eagles and the Ravens. In the Cowboys-Rams set-to, Cowboys receiver Dez Bryant caught a fist in the face. Both coaches cancelled the practice early.

New Orleans Saints coach Sean Payton has no patience with the practice session fistfights. He told his players that, if they planned to fight during the joint practice with the Patriots, “pack your bags.” Those two teams stood out during the week because they didn’t have any fights.

But, Burke wonders, what can the NFL do to stop the fighting? “Do they fine each player a dollar amount for fighting?” That won’t work, he says. “Some players would willingly pay a price” in order to throw a fist at an opponent. So the question becomes, should there be legal action to stop the fighting? If so, at what point?

Burke points out that professional football teams are a business, and no business can afford to have employees sidelined because of an injury caused by the action of another employee. That’s especially true if the employee is a key member of the team whose unique skill set is important to the success of the business.

Some analysts have suggested that ending joint practices is the solution to the problem. As Allen Iverson put it, “It's easy to sum it up when you're just talking about practice.” Burke says that the NFL is interested in pleasing its loyal football fans. However, players just can’t risk the injuries that can come from a fight, even if a fight video gets a lot of “likes” on Facebook. Commissioner Roger Goodell will have to step in and figure out a solution.

The Legal Broadcast Network is a featured network of Sequence Media Group.

Ashley Madison Disclosures Won’t Hurt Lawyers, Says Humorist at Law Sean Carter

A hacker group Impact Team recently released a massive amount of personal information about Ashley Madison subscribers. The email addresses listed include those of some high-profile lawyers and judges. Phoenix lawyer and humorist Sean Carter explains the implications of these disclosures.

Sean Carter

Sean Carter

Carter suggests that there will be very little fallout from disclosing the fact that some lawyers and judges signed up for an infidelity website. Carter quotes Stalin, explaining that “The death of one man is a tragedy. The death of millions is a statistic.” When there are 37 million people cheating, says Carter, it’s not an issue.

Having a profile on the Ashley Madison site won’t be problem, says Carter. “Who is going to be judgmental about it?” Like walking into a strip club and meeting your neighbor; neither of you is going to tattle about it. Carter doesn’t think the Ashley Madison fallout will damage the reputation of the lawyers whose names appear.

As to whether lawyers would lose jobs over this, Carter asks rhetorically, “Who’s going to fire them?” Carter points out that America is a nation where marriage failure and divorce are common facts of life. Carter suggests that no one in law firm management will want to make public disclosure of marital infidelity a ground for discharge. And a lawyer who finds out that a client has an Ashley Madison profile probably has job security.

As to any concerns about ethical problems, Carter refers to ABA Model Rule 8.4 that prohibits dishonesty, fraud, deceit or misrepresentation. However, Carter notes, Comment [2] to Rule 8.4 contains a “carve out” for adultery. “The key to any good marriage,” he says, “is at least a small amount of lying.” Little lies are the linchpin that holds a good marriage together, says Carter. The ABA rule understands people and marriage, Carter opines, and allows a certain amount of leeway in the conduct of lawyers in a marriage.

As to consequences of the Ashley Madison disclosures, Carter suggests that “if you owned stock in Google, it was a good day for you yesterday” because 37 million people opened new Gmail accounts. [Note: Mr. Carter’s commentary on the Ashley Madison story contains a lot of humor to go with the facts.]

Sean Carter, Humorist at Law, is a Harvard law graduate who now applies his skills to humorous speeches to lawyers (and others). Mr. Carter draws on his unique background as a former securities lawyer, corporate vice president and stand-up comedian to create educational programs that are not only laugh out loud funny, but also, relevant to business and legal professionals. The Legal Broadcast Network is a featured network of Sequence Media Group.