June 2022

Economic Downturn?

The Federal Reserve’s Open Market Committee announced last week that it would raise the Fed’s baseline interest rate by 0.75 percentage points, the largest such increase since 1994.

The Fed’s move came in the wake of the Labor Department’s earlier announcement that the consumer price index (a measure of inflation) rose by 1 percent last month, and by 8.6 percent for the past 12 months, the highest rate of inflation since 1981. Following the release of the inflation figures, all the major domestic stock indices plummeted.

As a result of the foregoing, combined with the geopolitical uncertainty arising from the war in Ukraine, the continued supply chain issues (exacerbated by China’s ongoing difficulty with Covid), and other related factors, many economists and business owners are anticipating a recession.[i]
Continue Reading Will An Economic Downturn Lead to An Increase in Tax-Related Whistleblowing?

The Housing Market[i]

During the first quarter of 2022, the housing market accounted for 16.7 percent of gross domestic product (“GDP”).[ii] This figure represents a return to historic norms following the substantial reduction in housing’s share of GDP after the Great Recession.

The reasons cited for the increase include the imbalance in supply and demand for housing, which itself resulted from the reduction in inventory following the 2007-2009 recession and the housing bubble burst[iii] and the recent wave of millennials who, encouraged by what has been until now a low interest rate environment created by the Federal Reserve in response to the pandemic,[iv] have been looking to purchase their first homes.[v]Continue Reading Either An Investor or a Dealer Be – That is the Question

A More Cautious Approach

Compared to the torrid pace of M&A transactions last year,[i] the current year seems rather pedestrian. That is not to say businesses are not being sold; they are. The purchase and sale of a business is one of the natural alternative paths in the evolution of the business.[ii]

However, the environment in which buyers and sellers are now considering their options and the manner in which they are approaching one another seem to have changed; one might say they are generally being more cautious, notwithstanding that the economy apparently remains strong by many measures.
Continue Reading The Earnout: Contingent Purchase Price or Compensation?