How is all this going to impact the Federal court system and what impact is it going to have on our economy and the direction of interest rates?
Well, if I had the magic wand and could give you the answer I would, or actually, i'd use the information and become filthy rich. However, for those of you interested here are my observations on each:
Justice Rehnquist. A great man according to everyone who knew him out here in Arizona, very humble, decent, fair and intellectually honest. His advocacy for a strong, independant and approriaetly financed federal judiciary will probably be his legacy. His decisions on issues pertaining to commercial litigation, tax and financial matters, most recently the Banks and Banatisis cases on taxable damages, show how the court has moved in the direction of wanting state or federal legislators to create good law, instead of creating law or precedent from the bench. From a business standpoint, it just reinforces the necessity of effective, consistent lobbying at all levels to be effective advocates for injured plaintiffs.
Chief Justice Roberts? There is a lingering feeling in the conservative community that Roberts could turn out to be a more genial, compelling David Souter, and therefore be a disaster for Bush II in much the way Souter was for Bush I in the eyes of the conservative movement. There is a huge risk in nominating a blank slate to the Supreme court, and now that risk is magnified with his nomination to replace Justice Rehnquist. I don't think anyone, conservative, liberal, moderate, etc, has any idea what Roberts is going to be like, and those who wink and nod and say, "He's one of us" sound a lot like John Sunnunu telling Republican's to not worry about Souter, he's another Scalia. The point is, you just NEVER know what you are going to get once someone get's life time tenure and the power of the gavel, so you hope for legal brilliance, a strong work ethic and a reputation for moral consistency, and by all accounts Roberts fits those bills. We as a nation and industry could do a lot worse and i'm going to support him even with his relative blank slate of cases.
The destruction of New Orleans. First, as my clients in other parts of Louisianna, Mississippi and Alabama will quickly point out, it was the ENTIRE gulf coast that was devesated, but that the camera's are in New Orleans as a result of the looting, rampage and convienient media access. My conversations with lawyers from other states affected confirms that the devesation was massive, complete and will take years, not months, to recover from. As I listed in my prior post, I believe this will be the crowning blow in the real estate market, which was on shakey legs to begin with. I also believe that the damage to the ports, the river, the refineries, docks and infastructure of that crucial region has been widely ignored as we all focus on the heartbreaking images of human misery and loss. Entire courts were wiped out, law practices destroyed, records and evidence ruined and washed away. Computers damaged, hard drives erased, staff and court workers scattered and traumatized as they look for family or try to repair their homes. The harm to the legal community, courts and practice of law is going to be profound as many lawyers have lost everything and the time to rebuild will be lengthy. The Settlement Channel will be rolling out several initiatives to assist in communication, education and financial assistance to the various local trial lawyer organizations.
In summary, I believe our economy will be stunned by the effects of the storm, the damage to infastructure, gas prices and the economy of the gulf coast. The Fed has little leaway in lowering rates to stimulate growth at this point, and commodity inflation is most likely going to slow down and cripple certain segments of our economy. Therefore, if I have one piece of advice to those of you looking to invest settlement proceeds or legal fees, it is this: Use a structured annuity or trust product with guaranteed yields from the highest quality life markets you can find and protect your assets during this time of economic slowdown and uncertainty. It is not the time for financially vulnerable people to buy real estate, speculate in equities or hold funds in cash paying 1%.
It's going to be another rough year as our country gets over this, and we will, but caution is the key word when it comes to client funds right now.