Apple has more cash right now than the US Treasury

 

As Republicans and Democrats continue to work towards a compromise to the country’s debt ceiling crisis, the U.S. Treasury Department said on Thursday that Washington now has a total operating balance of only US$73.768-billion. Meanwhile, Apple currently boasts a cash reserve of US$75.876-billion, as of its most recent quarterly earnings report at the end of June.

New figures from the U.S. Treasury Department indicate that the government has a total operating cash balance of $73.768 billion, less than Apple's own war chest of $75.876 billion.

As noted by Matt Hartley of the Financial Post, the news comes even as Republican and Democrat lawmakers debate over the federal budget and debt ceiling. The government's $73 billion number actually represents the "financial headroom" that lawmakers have before reaching an arbitrary debt ceiling, according to the report.

Apple reported having nearly $76 billion in cash on hand as of June 25, 2011. That's an impressive increase of $10 billion from the previous quarter, when the Cupertino, Calif., company had $65.8 billion in cash reserves.

Apple's war chest has grown quickly since 2005, when it had just $9 billion in reserves. As of the end of 2010, Apple's $60 billion stockpile gave it more cash than any other non-financial company in the U.S.

Shares of Apple closed above $400 for the first time earlier this week, before settling down some, eventually closing at $391.82 on Thursday. The company's market capitalization stands at $363.25 billion, behind only Exxon Mobil, which boasts a market cap of $403.93 billion.

 

 

As Apple's cash reserves have soared, several analysts and investors have called for a dividend that would redistribute some of the company's profits to shareholders.

However, Apple CEO Steve Jobs has said that the company's cash hoard is being saved for big moves. "We don't let the cash burn a hole in the pocket or make stupid acquisitions," he said last year. "We'd like to continue to keep our powder dry because we think there are one or more strategic opportunities in the future."

Patent acquisition may be one such strategic opportunity for Apple. The company recently paid $2.6 billion to outbid rival Google, which had $39.1 billion in cash reserves at the end of June, for a collection of more than 6,000 patents from Canadian telecom equipment maker Nortel. Apple teamed up with a consortium that included Microsoft, Research in Motion and Sony, pooling the group's resources in order to place the $4.5 billion winning bid.

Apple is also said to be weighing a bid for Interdigital, a company with a portfolio of 8,800 patents. InterDigital CEO William Merritt claims his company's patents are "deeper and stronger" than Nortel's collection.

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That Time in 1979 When the U.S. Government Defaulted

As the Congressional debate over the debt ceiling rages on this week, more analysts are raising the question of what would happen if the country defaults on U.S. Treasury bonds. For finance types, the notion of the U.S. government defaulting is nearly unthinkable; Treasury securities are considered to be effectively risk-free. Murmurs that the ongoing wrangling over the debt ceiling could lead to even a brief default have provoked plenty of worrying on both sides of the congressional aisle. Could the government really default?

It sure could. It’s happened before! In the spring of 1979, Congress was in the midst of a similarly heated debate about raising the debt ceiling, Legislators eventually reached a last-minute deal to raise the debt ceiling and (they thought) save the day, but something went wrong. The Treasury didn’t redeem $120 million worth of securities that matured in April and May.

In other words, the U.S. Treasury defaulted on its securities even though Congress settled the debt-ceiling issue. What happened? It’s not totally clear. 

 

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Ball State University finance professor Terry Zivney later co-authored a paper entitled “The Day the United States Defaulted on Treasury Bills,” and when he appeared on NPR’s All Things Considered earlier this month, he admitted the default was still a bit of a mystery even to him.
By all indications, the 1979 default seems to have been the result of a run of bad luck. The deal over the debt ceiling was a decidedly eleventh-hour affair, and when it sparked a run on Treasury securities by investors, the department got backlogged on its paperwork. Moreover, the Treasury later explained that it had problems with the word-processing and printing software that printed its checks. (This defense is otherwise known as, “We wanted to pay you, but you know how these dang computers are!”) 

A Costly Blip

 

This event wasn’t exactly a cataclysmic default. The $120 million in unredeemed securities was a tiny fraction of the Treasury’s $800 billion in debt at the time. The government quickly got its act together and paid off investors—the Treasury still considers the episode to be a delay rather than a default—but Zivney’s research found that the blip had real consequences for the economy.

After the default, investors no longer saw Treasury securities as totally risk-free options, so the government suddenly had to pay a higher interest rate when it wanted to borrow money. Zivney and co-author Richard Marcus estimate that as the result of the small 1979 default, the Treasury had to up the interest rate it was paying by 0.6 percent on all of its debt. That may look like a tiny number, but when it’s spread across the Treasury’s entire debt, it adds up quickly.

It’s not clear how much we can learn about our current situation from an apparently inadvertent default over three decades ago, aside from maybe the painfully obvious point that a new default would be a very bad thing. But the next time you hear someone say a government default would be unprecedented, you’ll know better. 

 

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President Barack Obama takes debt battle to Twitter, loses more than 40,000 followers 

in one day

 

 

During this speech Friday, President Obama asked American to email, call, and tweet GOP Congressional leaders, and ask them to support a bipartisan debt solution.

President Obama brought his debt battle to Twitter and he lost – more than 40,000 Twitter followers.

Obama asked Americans Friday to call, email, and tweet
Congressional leaders to “keep the pressure on” lawmakers in hopes of reaching a bipartisan deal to raise the nation’s $14.3 trillion debt limit ahead of an Aug. 2 deadline.
Obama’s campaign staff used the @BarackObama Twitter account to post the Twitter handles of tweeting GOP leaders – state by state, tweet by tweet.

“Tweet at your Republican legislators and urge them to support a bipartisan compromise to the debt crisis,” Obama’s campaign staff wrote on his account before launching the day-long Twitter campaign.

The campaign appears to have served its purpose: Republican Twitter accounts were flooded with pleas for compromise.

Not everyone is a fan of the presidential spam. By Friday evening, the President had lost more than 40,000 Twitter followers - and counting.

Many members of the Twitterati took to the social media platform to voice their annoyance over the barrage of partisan tweets. A search for “@BarackObama unfollow” turned up scores of irritated posts.

“Honestly, @BarackObama, I’m going to have to unfollow you if you don’t stop filing up my Twitter inbox soon,” tweeted Bostonian @melisthreadgill, a self-described “Progressive activist”.

“Can’t believe I had to unfollow @BarackObama for spamming Twitter. Really, really strange behavior,” wrote @Arevill inConnecticut.
“I want to unfollow @BarackObama but his desperation is too entertaining,” tweeted @rdpatrick of Lavonia, Georgia.

While his follower number appears to have taken its biggest dive in recent memory, Obama’s Twitter account still had a whopping 9,362,880 followers at 7:30pm Friday night, down from 9,402,898 Friday morning - and he's still the third-most followed person on the planet.

 

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Save your friends from outdated email—

help them switch to Gmail

I switched to Gmail the first month it came out, mere seconds after receiving an invitation from a friend and two years before joining Google. Since then, I’ve invited hundreds of people, most of whom have happily made the switch to Gmail and never looked back.

But I have one friend, Andy, who’s the straggler in the group. A couple months ago, I sent out an email about a barbecue I was having. On the “To:” line, there were 15 Gmail addresses and then Andy. He stuck out like a sore thumb. Shortly thereafter, Andy was complaining to us about how much spam he got. That was the last straw.

My friends and I sat Andy down and talked him through how to import his contacts. We answered his questions, guilt-tripped him a little, and a few painless minutes later we were done. Andy had Gmail.

We all have a story like this. On the Gmail team, we affectionately refer to them as “email interventions.” We hear about them all the time: the cousin who finally switched from an embarassing address like hottie6elliot1977 to a more professional elliot.d.smith@gmail.com, a co-worker who helped his dentist switch after he heard her grumble about having to pay for IMAP access, etc.

It’s for these folks we created emailintervention.com, a site that makes it easier than ever to help your friends and family make the switch.

Staging an intervention is simple:

1. Visit emailintervention.com
2. Sign in and automatically identify who from your contacts has yet to make the switch, or just enter a friend’s email address manually
3. Choose from one of three intervention message templates (“straightforward”, “concerned” or “ embarrassed”), and add your own intervention video if you’d like
4. Send a customized email and follow up as needed 

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Microsoft ribs Google's ad tech with 'Gmail man'

 

The day after Google launched its site dedicated to helping to convert non-Gmail users with tongue and cheek "interventions," a Microsoft video has surfaced taking jabs at Google's mail service for its contextual advertising program.

Mary Jo Foley over at CNET sister site ZDNet posted the video spoof today, which was shown to attendees at Microsoft's annual Global Exchange sales conference earlier this month. In it, the company takes a crack at Google's AdWords program, which serves up contextual advertising based on the content of e-mail messages. That's accomplished by mimicking what the practice would be like with a real-life mail delivery person.

In this case, it's the "Gmail Man," a friendly, though perhaps too curious bringer of electronic messages that have been printed out in giant red Gmail envelopes. The Gmail Man explains why he's rifling through open messages to a curious passer by, a young girl who's quickly repulsed. Later on he strolls into a fictional office where he serves up ads the recipient says are wildly inaccurate.

The end goal is to push Microsoft's Office 365 product, which launched out of beta with much fanfare exactly one month ago. That subscription service offers small and midsize businesses hosted versions of Microsoft's software like Exchange e-mail and Lync, Microsoft's communications platform.

Not mentioned in the video (but worth noting) is that Google Apps users at both the business or educational tiers can completely disable advertising. Apps is Google's non-consumer focused Web mail and office Web app offering. 

The full video's below:

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The Man Without a Facebook Trailer

Remember Mel Gibson’s movie The Man Without A Face? This is what that tale of a isolated and introverted man would be about if it were made today,

 

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Netflix Relief Fund with Jason Alexander

Netflix just recently announced that they would be raising the prices of their services making it impossible for any of their customers to continue living. 

 

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