Raja acted on his own in 2G case: Justice Ganguly

Karan Thapar, CNN-IBN

: Feb 19, 2012 at 07:22pm IST

Karan Thapar: Justice Ganguly, let me start with the comment made about your recent landmark sanctions judgement and 2G judgement, both of which were delivered in last thirty days. 

The first was reserved in November 2010 and made public thirteen months later and second was reserved in March 2011 and delivered eleven months later. 

Both were delivered during an election campaign and in some quarters, this has led to people being suspicious about the timing and the delay. 

How do you respond to that sort of comment?

Ashok Kumar Ganguly: Well I understand that the judgment had to be delivered during my tenure, since I was a party to the judgment. I was retiring on February 2, 2012, that date can't be altered. So I thought it is better to deliver the judgment than to keep it undelivered. In my tenure as a judge of eighteen years, I have not kept any judgment undelivered which were reserved by me. Now these two judgments were heard by a bench of Justice Singhvi and myself, but both the judgments was reserved by my learned senior colleague Justice Singhvi. I can tell you if the judgment had been reserved by me, they would have been delivered long ago.

Karan Thapar: So in others words the reservations was not done by you, it was done by your brother judge?

Ashok Kumar Ganguly: Yes, senior brother judge

Karan Thapar: And you were determined to deliver it before you retire?

Ashok Kumar Ganguly: Otherwise it would have been huge loss of time. Because these cases can't be dismissed off the cuff, these cases were heard…at least more then thirty days were devoted. Again when judicial time is so precious, I would have felt very sad and people would have criticised the system, if these judgments were not delivered.

Karan Thapar: So the suspicion in some quarters about the delay or the timing is unwarranted?

Ashok Kumar Ganguly: Absolutely

Karan Thapar: And the delay is just because your fellow judge, your senior fellow judge wanted to reserve it for a while?

Ashok Kumar Ganguly: Yes, because judges are under tremendous pressure, specially the Supreme Court. So as a result of this pressure, it must have been delayed. I am sure the delay is not intentional.

Karan Thapar: Now one of the important judgment was the 2G judgment where you found that the first come first service fundamentally flawed. You believe it's a violation of constitutional principles and you say when it comes to allocation of scarce natural resources, the state must always adopt of method of auction. Are you prepare to accept any exceptions to that rule, is that any room for discussion?

Ashok Kumar Ganguly: First of all let me tell you I am not here to defend the judgment.

Karan Thapar: Absolutely, I am only asking for explanations, I am not asking you to defend.

Ashok Kumar Ganguly: I will tell you, the judgment is a reasoned one. The reasons are all there, of course you are right and true that there are no such absolute propositions. All propositions have to be considered in the facts of the case. In the facts of the case which were discussed in the judgment, we thought that is the only viable option.

Karan Thapar: Is the ruling that the state must always adopt the method of auction, the ruling should apply to all natural resources?

Ashok Kumar Ganguly: I can't say that because it has been said in the context of the facts considered in the judgment.

Karan Thapar: So this is in the context of the spectrum?

Ashok Kumar Ganguly: Yes.

Karan Thapar: It is possible therefore that in the context of other scarce natural resources, for instance water or land for hospitals and schools, auction may not be the best way to handling those?

Ashok Kumar Ganguly: Well I am not here to sort of predict those lines. It all depends on the facts; normally the lands for hospitals and schools are acquired on the land Accusation Act, that's the procedure in our country.

Karan Thapar: So the auction does not apply on there?

Ashok Kumar Ganguly: Naturally.

Karan Thapar: So there is infact room for discretion because this is the issue that many people have asked themselves, is there a room for discretion or is this an inflexible rule, a rigid principle? You are suggesting to me that there is clearly room for discretion; each case is a case on its own?

Ashok Kumar Ganguly: Yes, discretion as you know is the life blood of any judicial decision . There can't be any straitjacket.

Karan Thapar: So people who threw up their hands in the air and said ' oh dear this judgment has lay down an inflexible rule, all natural resources have to be auctioned there is not room for discussion hereafter'. Those people have misunderstood the judgment somewhere?

Ashok Kumar Ganguly: Well I do know. But see the judgment has to be understood as I am telling you repeatedly; it has to be understood as the facts which were discussed and decided in the case.

Karan Thapar: And it has to be understood in the context of the case?

Ashok Kumar Ganguly: Of course.

Karan Thapar: Now a second concerned that has been expressed and you must have heard and read it in the paper, is that your judgment have found Mr Raja behaved wholly arbitrarily and unconstitutionality. And people say in effect Justice Ganguly and Justice Singhvi have tried and found Mr Raja guilty. Although he wasn't in front of them and he wasn't being defended, people say this is unfair and looks like a miscarriage of justice.

Ashok Kumar Ganguly: Well I don't think so. There is a trial going on, and in the trial he is getting opportunities to prove his innocence. But here we are considering the matter on a question of a executive decision. The decision of the minister concerned was defended by the government. So it's nothing personal, it was a decision of the government and he happened to be the minister. So therefore he was defended.

Karan Thapar: How was he defended?

Ashok Kumar Ganguly: Because the ministry was defended, he acted as the minister and the ministry was defending him.

Karan Thapar: So you are saying that the government lawyer who appeared before you would be defending Mr Raja's action, that would have been his defence?

Ashok Kumar Ganguly: Yes.

Karan Thapar: Except that the same government is prosecuting him. So Raja would consider that the government was defending him in one instance?

Ashok Kumar Ganguly: It is open to him to come and defend himself, if he wanted too.

Karan Thapar: He had that option?

Ashok Kumar Ganguly: Of course he had, the court never shut out anybody.

Karan Thapar: So if he wanted to he could have exercised that option and that was up to him to decide?

Ashok Kumar Ganguly: Yes.

Karan Thapar: I know your judgment ends in the last paragraph saying that 'nothing in the judgment in any manner shall prejudice the defence of those who are facing prosecution'.

Ashok Kumar Ganguly: That's right.

Karan Thapar: But are you absolutely confident that the trial court won't be influenced, by what is at the end of the day, a strong and unequivocal finding of guilt against Mr Raja?

Ashok Kumar Ganguly: Certainly, the court is a court, that's why we made it clear that these findings are the purpose of official business. The criminal case is slightly different, it goes in a different perspective. He is entitled to get his defence.

Karan Thapar: Except the trial court judge is a junior judge, two Supreme Court judges right at the top of the chain have given a verdict…

Ashok Kumar Ganguly: Well there is nothing word is called junior or senior, he is doing his duty. He is a judge and every judge is independent of anything and you made that clear by saying this is not fixed.

Karan Thapar: So you are really confident that this won't affect and prejudice Mr Raja's case?

Ashok Kumar Ganguly: No it cannot. That is how the judiciary functions.

Karan Thapar: But the people who turned around and say and you must have read this, that you virtually decided the lower court trial as well, are being unfair to you?

Ashok Kumar Ganguly: No, I don't think so. The trial is an independent trial and after the trial he has further opportunity of going higher up.

Karan Thapar: So you are confident that you have not prejudiced Mr Raja's trial at the lower court?

Ashok Kumar Ganguly: Certainly not.

Karan Thapar: Now your judgment and this is the another concern that has risen in the papers, it is a concern that worries the telecom sector in particular, has struck down licences awarded by first-come-first-served post January 2008. But you said that nothing about licences awarded in the same way between 2001 and 2007. Because as your judgment says they were not party to the petition before you and the legality wasn't being questioned. Doesn't it also therefore follow that the legality of those judgments remains unresolved?

Ashok Kumar Ganguly: Things which are not challenged before the court, again you are asking me on the merits of the judgment.

Karan Thapar: I only ask you to explain what is the position is to regarding earlier license.

Ashok Kumar Ganguly: What have been explained in the judgment have explained in that. In an interview I am not going it to do it further, I am not going to defend it further. The judgment stands as it is. But I tell you every judgment has its territory things which were before the court, considered and the things which were not before the court were not considered.

Karan Thapar: And the licences awarded by first come first between 2001 and 2007, weren't before you and therefore weren't considered by you?

Ashok Kumar Ganguly: Precisely so.

Karan Thapar: If today or tomorrow, someone were to bring a petition in the Supreme Court. Questioning the legality of the first come first the license awarded between the 2000 and 2007. Do you believe that the Supreme Court would entertain that petition?

Ashok Kumar Ganguly: Well I can't predict.

Karan Thapar: What's your feeling?

Ashok Kumar Ganguly: I can't comment on something which may happen in future.

Karan Thapar: If the Supreme Court were to accept such a petition, does it not follow that to be consistent, it would have to apply the logic you have applied, all the way back to 2001

Ashok Kumar Ganguly: Well what logic will be applied in a given situation or in a future litigation, it's a very hypothetical question and I don't want to answer that.

Karan Thapar: Except that if the same logic wasn't applied, then the Supreme Court would be applying two different standards, one to licences post-2008 and another to licences to pre-2008.That would be inconsistent.

Ashok Kumar Ganguly: I don't know and I hope and believe Supreme Court won't be inconsistent but on a future litigation it's not for me to make any comment.

Karan Thapar: I understand you can't make a comment on a future litigation but equally you have said that you hope and pray that the Supreme Court won't be inconsistent.

Ashok Kumar Ganguly: Certainly, it is expected that court won't be inconsistent.

Karan Thapar: And to be consistent the Supreme Court would have to apply, the logic and conclusion of your judgment to any future petition as well.

Ashok Kumar Ganguly: I am very guarded in my reply that I cannot say what Supreme Court will do in the future litigation.

Karan Thapar: Except that the consistency would required that they apply the same principle and logic?

Ashok Kumar Ganguly: I do not know, consistency is a word of very wide import.

Karan Thapar: Alright you are leaving that open and this I raised only because it was an issue that concerns not just media, not just license holders but the telecom sector. Would I be right in concluding this way, that is as far as licenses is issue first come first served between 2001 and 2007 are concern, there are question marks about them and those question marks only be resolved when a petition is brought to the Supreme Court and till such time uncertainty will continue?

Ashok Kumar Ganguly: I don't know what is uncertainty if the licenses are not questioned, the licences remain.

Karan Thapar: But when they are questioned uncertainty will arise?

Ashok Kumar Ganguly: Again you are taking about future and on that I don't want to answer.

Karan Thapar: Now your judgment has serious impact on the foreign company such as Telenor, all of whom have invested billions of dollars in legitimate contract through government procedure, agreed by the government and with government permission and approval. Suddenly these people find that their contracts are in jeopardy. Does it worry you that they might now feel a need to go to court and challenge your judgment?

Ashok Kumar Ganguly: May be I can't say anything, if anybody feels that their rights have not been protected, it's for them to decide.

Karan Thapar: But if there is a plethora of challenges, would that raise question mark about your judgment ?

Ashok Kumar Ganguly: I am not here to certify my judgment, it's not my judgment, it's a court judgment. The judgment of the court… I am not here to certify that.

Karan Thapar: A second issue that arisen in press, is, has your judgment created doubt in the mind of foreign potential investors, who now before to come Indian may now say themselves, given that those sacrosanct contract overnight negated. Should be we going to India? Have you created doubts in minds in the foreign potential investors, the viability the investing in India?

Ashok Kumar Ganguly: We don't know this is not the first time that the contract is squashed though courts. This is nothing new. There were very many aspects of a contract. I am not taking of this particular judgment; it is happened in the past and would have happened in the future also. Every contract has certain legal parameters. Whenever anybody enters in a contract in this country, the law of the land has to be obeyed.

Karan Thapar: So are you saying to me that foreign investors should be reassured that untimely the rule of law and transparency will prevail and wrong doing will be rectified, rather then worried by the fact that three individual companies, who believed they had sacrosanct contracts, might have suffered?

Ashok Kumar Ganguly: I would like to think that way but again I am telling you, again what is going to be happened the fate of those foreign investors future depend on breach of contracts…

Karan Thapar: Justice Ganguly lets take a break at this point of time and when we come back, I want to talk about your other landmark judgment, the sanctions judgment. That's in a moment's time. Don't go away.

Karan Thapar: Welcome back to Devils Advocate, an exclusive interview with one of the architect of the landmark 2G judgment, justice Ashok Kumar Ganguly

Let's come briefly Justice Ganguly to your sanctions judgment which gives the government a maximum of four months to respond to corruption complains against public servants. Now, critics turned around and say that wittingly or unwittingly you may have opened a Pandora's Box for spiteful and vengeful complaints which would end up harassing people and individual and innocent people rather than further justice?

Ashok Kumar Ganguly: Well every judgment is open to criticism, I don't say no judgment can't be criticised but we have given reasons. Those are suggestions by the court. As a present advice on the Prevention of Corruption Act, I think Section 19 where they have to ask for sanction and time limit is not fixed. So we have said that the government should do well to follow this timeline in order to have corruption free governance.

Karan Thapar: How do you reconcile the fact that you have given the government a four month timeline in which to respond the corruption cases against public servants, but there's absolutely no time bar when the chief justice is approached for permission to file FIR against a sitting judge. To be consistent, shouldn't be time bar in that instance as well?

Ashok Kumar Ganguly: Well I don't want to say anything but as far as the directions or the recommendations, these are not directions these are recommendations concern, they should apply across the board.

Karan Thapar: They should apply across the board?

Ashok Kumar Ganguly: Yes, we have not made this in our recommendations that is not legislation. Kindly make and understand the difference.

Karan Thapar: That is practice and convention ?

Ashok Kumar Ganguly: Yes we have suggested these by the recommendation to the government to consider this and make an amendment to the law.

Karan Thapar: But you are also suggesting or hinting that the same recommendation should be borne in mind by the chief justice when he is considering…..

Ashok Kumar Ganguly: I am not making a reference to any particular person or any particular……

Karan Thapar: But it should apply across the board?

Ashok Kumar Ganguly: It should apply across the board.

Karan Thapar: That is a very important thing you are saying. I don't want to embarrass you by making it too explicit. But the recommendation should apply across the board?

Ashok Kumar Ganguly: That's our views.

Karan Thapar: Now in this particular judgment you made a distinction between the PMO and the PM. Most people turned around and said that this is an invalid distinction. They say this distinction looks as if it is an attempt to exculpate the Prime Minister by any wrong doing by pinning the blame on his juniors and his subordinates, where as at end of the day as head of the PMO, he carries responsibility?

Ashok Kumar Ganguly: Certainly he does carry the responsibility but we have made a distinction considering the onerous duties of the PM and considering the fact, the particular facts of the case there were queries made by himself. But he was not assisted properly by his office.

Karan Thapar: So the fact that he made queries permits you to make this distinction?

Ashok Kumar Ganguly: Yes again in the facts of the case.

Karan Thapar: This doesn't mean that the similar distinction will be made in other cases. Those other case stands on other facts ?

Ashok Kumar Ganguly: You understands that the heavy business that the heavy business that the PM have to discharge, considering that and considering the fact that he made queries which was not properly answered. Therefore we have made this distinction.

Karan Thapar: Now my last question in the 2G judgment, it appears that you have pinned the blame entirely Mr Raja but you haven't paid sufficient heed to the principle of the collective Cabinet responsibility. Surely such a momentous decision requires that the Cabinet also accept the responsibility?

Ashok Kumar Ganguly: I think from the judgment, if you look at the judgment facts properly, you find that the minister concerns didn't pay heed to the request made by the another ministers, including the request made by the law minister to put the matter before the empowered committee.

Karan Thapar: As a result of which collective Cabinet responsibility, you are saying, doesn't apply?

Ashok Kumar Ganguly: In a way yes because that is the why we find that there is no proper policy.

Karan Thapar: What about the fact that in the three areas that Mr Raja has found to acted have wrongly, pricing, advancing the cut off date, determining the first-come-first-served in terms of letter of intent rather than in terms of date of application. He a) either informed the Prime Minister or the Prime Minister overlooked it or ignored it or the Prime Minister gave him advice which Mr Raja overlooked and Prime Minister didn't look. Doesn't that point the figure all the way to the PM?

Ashok Kumar Ganguly: You again asking me on the nitty gritties of the judgment. So there all discussed there so I don't want to go again in the interview.

Karan Thapar: But you are absolutely convinced that the this instance the principle collective Cabinet responsibility does not apply?

Ashok Kumar Ganguly: Possibly that is not followed.

Karan Thapar: It doesn't apply?

Ashok Kumar Ganguly: It was not applied to this particular case.

Karan Thapar: It wasn't followed? Raja acted unilaterally which is why his colleagues in Cabinet possibly don't share any blame?

Ashok Kumar Ganguly: Possibly yes.

Karan Thapar: Justice Ganguly, thank you very much

The real challenge to global growth is in the financial sector: L Alan Winters Interview with Chairman of the Board of Directors, Global Development Network

Business Standard :Kanika Datta / New Delhi

With economic recovery in the US still shaky and Europe in crisis, global growth faces a new and possibly unprecedented set of challenges. What does this mean for India and China? L Alan Winters, chairman of the board of directors of the Global Development Network, professor of economics in the University of Sussex and a leading specialist on international trade and development, sets out some of the issues in an interview with Kanika Datta. Edited excerpts:

In your 2007 book Dancing with Giants on India and China, you came to the conclusion that, by 2020, despite their extraordinary growth, neither China nor India would make as big a contribution to the world economy as most people supposed and that the US’ contribution to world growth by then would continue to be a little under a third. Would you change your views now?
A little bit. We didn’t foresee quite how stressful the last few years would be for the western economies or the pressures of the next few years so, indeed, I would change it somewhat. But the basic principle that while both India and China are huge in terms of population and are growing very rapidly, certainly measured at international prices, their economies are still not as huge as the US.

You had made those projections on the basis of the US growing pretty steadily and on India and China growing at a slower pace from 2005 onwards. What’s happening now is the reverse.
We mis-predicted the future of the US in the sense of not understanding quite how hard it would be hit by the crisis and it is arguable that the US is going to take quite a long time to recover, so I would certainly scale down the expectations relative to where we were in 2007. As for China and India, I haven’t reworked in great detail the growth projections but the basic idea was that as you get richer, growing does become more difficult.

True, both are still growing but not as fast as before for varying reasons. Obviously, we in India see many challenges and China has its share of problems too. What does it look like from the outside? Let’s start with India.
I wouldn’t claim great expertise in India but there clearly are challenges as far as the labour market is concerned so that people can move and the benefits of growth are spread more evenly. One of the interesting features of the Indian economy is that the manufacturing sector has grown but it’s fairly clear that India is not going to become the manufacturing-exporter in the same sort of way as China. The question, therefore, is: can it leap immediately to the services sector as the engine for growth? I have become slightly more optimistic about that over the last couple of years. But it’s quite uncertain to me whether that is the basis for broad-based growth. It clearly is the basis for growth for selected sectors and possibly selected segments of society.

You talked about institutions and the lack thereof as a constraint for growth in G20 countries. Do you see that as a comparable constraint for India?
I don’t see it as such a big constraint as the labour market, although in some sense the issues in the labour market are institutional — there are bodies that have particular sets of interests. I do hear people talking in terms of challenges for spreading growth more widely as being partly institutional — if one is frank, there are sometimes issues of corruption. Certainly, I am not a fundamentalist about corruption, however. One has to be fairly realistic about what could be achieved but very clearly the sort of levels of income that are generated in countries like, say, Denmark or Canada require a lot of trust between a lot of different parties. If you have a situation in which corruption is very widespread that trust does not grow up, so people put a lot of effort into protecting themselves against things that, in a sense, in a trusting society you don’t have to invest in and at some stage that will become a major issue for India.

Well, China has a huge issue with corruption as well but it hasn’t impinged on growth...
It’s very clearly a problem for China as well but it’s not that you can’t grow in the presence of corruption, it’s just that at some point you won’t be able to grow. In a modern society one trusts so many people implicitly. If I am not in a system in which trust is not automatic, then I am diverting effort from being productive. I think it’s a major issue in China and looking at China, one is seeing a more restive society over the last few years so corruption might become more of an issue than I would have predicted in 2007.

To come back to challenges in China, they are more a function of inflation, wages and their exports markets are being squeezed…Where do you see China going? 
China has entered the middle income trap. But where both India and China are now was just inconceivable 25 years ago. No one thought anything like this was possible.

Especially China, when you consider the time frame within which it grew.
True, but even if you crossed China out of the equation, India’s performance from about 1997 onward is absolutely unimaginable as well. And they’re both large economies and societies. So I see them continuing successfully, there will be rough periods over the decades, possibly associated with political failure and unrest. But I do think they are large enough to be a bit concerned about the constraints imposed by the rest of the world and just how rapidly the rest of the world will be prepared to offer markets and share commodities.

The western economies have emotionally traumatic changes to make. I don’t know if they will be economically traumatic but very clearly India, China and some other emerging economies are becoming much more important, which means some of the things western Europe and the US had taken for granted – reasonably cheap energy and so on – will no longer be possible even more rapidly than we had projected.

Going forward, what do you see as the biggest challenges to global growth? 
The real challenges are in the financial sector. Every morning we worry about Europe and it is by no means clear whether the US is out of the woods and there is also plenty of reason to worry about the Chinese banking system in a sense that they may have quite enough to bail the banks out, but they have an asset bubble building and their banks are stuffed full of bad debt. The issue of stability of the financial sector, the debt restructuring as far as the West is concerned remain challenges. If you look at the work of Ken Rogoff and Carmen Reinhart, recovery from financial crises is slower than from other recessions.

What do you make of Standard & Poor’s (S&P’s) downgrades in Europe?
I guess in the world that rating agencies inhabit it was predictable and understandable. On the whole, however, I find the role that the rating agencies play fairly unfortunate — and I don’t mean that in the same way as Mr Sarkozy would. The principal of financial stability is that lots and lots of people who have different opinions are taking bets and they sort of smooth out. If you set up a system, however, where S&P says it’s not AAA but AA+, a whole bunch of institutions are obliged to change their asset stocks. You actually are eliminating that risk-sharing on which the whole concept of financial stability rests. So we have got ourselves into an extremely unfortunate situation whereby we have conferred responsibility on these rating agencies which, quite frankly, are not very good at predicting what will happen — these are the people who thought Iceland is fine!

It’s not just that we’ve destroyed the law of large numbers and concentrated things around particular points, we’ve then provided a trigger to those points to a bunch of people who have not proved themselves to be terribly good. So I have argued quite vigorously whether it is possible to devise a way of getting out of this situation. Frankly, I have not worked out a system but I do deeply regret the idea that instead of each bank having to take independent decisions of which they are responsible they depend on the rating agency. You do not want a situation where people have the ability to move billions of dollars of money and then say it was not my fault, the rating agency said it was all right!

Quote Gems :Dr. Norman Vincent Peale

" Every problem has in it the seeds of its own solution. 
If you don't have any problems, 
you don't get any seeds. " 


-

 Dr. Norman Vincent Peale

Management Tip of the Day: :Identify Your Distinctive Strengths

To get a job or a promotion, you need to know your strengths. If you can't articulate them, you can't expect your boss or potential employer to either. Here's a four-step process to identifying what makes you great: List your strengths. Include skills and knowledge you've acquired through experience and education as well as softer intrinsic strengths, such as insightfupathy. Ask for input. Ask colleagues for honest feedback. Revisit past feedback. Reread old performance reviews or think back on coaching from previous bosses. Modify your list. Adjust your original list to reflect what you've learned. Make sure the strengths are specific so that they are credible and useful.

Today's Management Tip was adapted from "Five Steps to Assess Your Strengths" by Bill Barnett.

6 Deadly Financial Sins

Source : SiliconIndia:16 feb 2012

To maintain finance, it’s good to know what you should do with your money but tips what you shouldn’t do will make you smarter financially. Here are six deadly financial sins – which you should never commit.

Co-signing a Loan

When you co-sign with your partner for a loan, it means you are agreeing to pay if the partner fails to pay. The lender may catch hold of you if your partner doesn’t make payments. Even if you are sure you could cover the payments, experts’ advice that you should step back and ask why you are being asked to co-sign. Is it because the borrower has a bad credit score and sketchy financial history? Or the borrower is looking forward to borrow a huge amount? Figure out the answers before you sign, rather drop the idea because it is no point of being accused because of your partner’s bad decision.

Buying Variable Annuities

You shouldn’t buy these variable annuities, especially in a retirement account. These annuities are too expensive but plain as simple as well. These variable annuities are a better deal for the agents rather than consumers. Relatively you should build your own investment accounts through low-cost exchange-traded funds or no-load mutual funds.

Designating a Minor as a Life Insurance Beneficiary

Life insurance benefits cannot be paid to minors. If you make such mistake then ultimately, a judge will oversee how the funds are distributed to your young ones. To make sure this doesn’t happen, you must set up a revocable living trust and make the trust the beneficiary of your life insurance. In this same trust, you can include the proceedings to be used by your minors.

 

Investing in a Long Term Bond Funds

Bond funds are never a good help for investors. In an individual bond you can hold the investment to maturity and be assured that you will get your principal back (in case you don’t fall into a default), but in a bond fund no finite maturity date is there, and most funds are actively traded.

Especially it is not good times to invest in long term bond funds, as interest rate are so low. Rate might rise in future, even if it’s not in 2012. When rates will raise, the longer the maturity of a bond, the bigger will be the decline in the bond’s price. The bond prices are inversely proportional to the yields it fetches. When yields rise, prices drop.

If you own an individual bond, you can at least make the decision to hold on until it matures, so that you can receive all your principal back. But a bond fund may sell bonds at those lower prices, locking in a principal loss.

Defaulting on Student Debt

Even if you fall into extreme financial hardship and file for bankruptcy, the student debt loan will not be exempted in bankruptcy. Falling into a default debt can lead you to have your wages garnisheed that is the borrower gets to take money out of your paycheck to make good on your debt.

If you have a student loan, no matter how financially stressed you are contact your borrower and let him know about your opinions. If the loan is from a government bank, then you have a variety of repayment plans which will reduce your monthly payments as well as student loan deferment and leniency during periods of economic difficulty.  

 

Not having four essential documents

These four documents are a must for a responsible estate planner.

· A will

· A revocable living trust

· An advance directive - The advance directive is a document which includes your medical intervention if your are unable to express those wishes yourself, along with a durable power of attorney for health care in which you designate the person who will advocate on your behalf to make those wishes known.

· A durable power of attorney for financial matters which includes the incapacity clauses. This allows a person of your choice to step in anf make financial decision on your behalf if you can’t make them yourself.