IRS Warns of EFTPS Phishing Scam

The IRS has issued a warning about a fraudulent scheme targeting Electronic Federal Tax Payment System (EFTPS) users. The scheme uses an e-mail claiming that the user’s tax payment was rejected and directs the user to a website for additional information. The website contains malware that will attempt to infect the user’s computer.

The IRS does not initiate taxpayer communications through e-mail. If anyone receives a message claiming to be from the IRS or EFTPS, do not reply to the sender, access links on the site or submit any information to them. Report and identify this or other phishing, e-mail scams and bogus IRS websites by forwarding the e-mail or URL information to the IRS.

The Hindenburg Omen – Weekly Market Watch

The most feared technical pattern in all of market chartism is the Hindenburg Omen.  “The Hindenburg Omen is a technical analysis that attempts to predict a forthcoming stock market crash. It is named after the Hindenburg disaster of May 6th 1937, during which the German zeppelin was destroyed in a sudden conflagration.”

The Hindenburg Omen is not a guarantee of a crash, and the five criteria that must be met for a Hindenburg trigger typically need to reoccur within 36 days for reconfirmation. The Hindenburg Omen has a roughly 25% accuracy rate in predicting big market upheaval since 1987, meaning that it is wrong 75% of the time.  It does not mean that the market is going to crash but that there is a higher probability.  It predicts the probability of a move greater than 5% to the downside.  The last Hindenburg Omen occurred during the lows of 2009. On August 25th, we just had another (unconfirmed) Hindenburg Omen.

The 5 criteria of the Omen are as follows:

  1. That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.
  2. That the smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.
  3. That the NYSE 10 Week moving average is rising.
  4. That the McClellan Oscillator is negative on that same day.
  5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.

For more information contact Richard Taylor.

FASB 13 Impacts Operating Leases

Upcoming changes to lease accounting rules will greatly affect U.S. companies and will have a tremendous affect on return on assets and other key financial ratios.

Treating lease obligations off the balance sheet has helped buffer real estate performance. However, changes to this may take affect as early as 2011.  Planning is critical to reduce the impact on the bottom line.

Contact HLB Gross Collins, P.C. for your financial planning needs.

Virtual Back Office Finally Viable

Gross Reality Blog, week of August 23, 2010

by Steve Gross

Virtual Back Office Finally Viable

With the development of best of breed, coordinated, and integrated services, most businesses can now lower costs for personnel, as well as hardware and software investments in many aspects of  business. In the Cloud (software-as-a-service) now allows businesses to:

  1. Pay bills automatically by scanning bills and approving for payment
  2. Bank online (including processing checks received online)
  3. Manage receivables and payables
  4. Real time cash balances, cash flow and reconciled accounts
  5. Automated posting to general ledger
  6. Call in hours for full payroll processing and integration with general ledger
  7. Production of financial statements (doing weekly, monthly, as needed)
  8. Benchmarking trends, analytics, comparisons to plan, and competitors automatically.
  9. Project costing, electronic fill submissions and other processes available depending on industry
  10. Store all document electronically in virtual file cabinets

With these capabilities, the effort, cost and complexity of administration of the normal business is vastly simplified. This allows management to focus on indentifying insights into the business, so that action can be taken for improvement.

Data~ Information~ Insight~ Action

 In the past, much energy was spent trying to convert data to information every month, not leaving time for much else.

Presently, the process is easy, efficient and more automated.  Insights are highlighted as a result of reporting, allowing management to focus on and improve areas needing attention.

To learn more about how to transition your business to the “New Normal,” call me at HLB Gross Collins, P.C. at 678-306-1551 or email me.

The Market is an Anomaly – Bad Economic News Doesn’t Equal Decline

During July, economic news contained a list of bad news.  Some of the items are listed below:

  •       Unemployment continues at record levels
  •       GDP growth has slowed in the second quarter from 3.7% in the first quarter to 2.4% in the second.
  •       Fears of a double dip recession continue.
  •       Consumer confidence continues to be low.

This is a partial list of perhaps a dozen set of bad statistics so logically the markets would go down.  In July, during all of this news, the markets actually went up about 7%.  On a short term basis the markets are not logical and at this time it is very difficult to determine the direction.  The bad news continues into August and the markets have declined by almost 2.5%.  One analyst speaks on CNBC and says that we are going to have a double dip recession, then another analyst says that we are not.  There is no trend.  This feels like riding the roller coaster at six flags, the ups and downs make your stomach fly up into your throat.  You ride it from the beginning to the end, with ups (euphoria) and downs (fear) along the way and you end up in the same place that you started.  Then you get back on.

The S&P 500 begins the year at 1,115, goes up to 1,217 on April 23rd, then declines to 1,022 on July 2nd, then goes back up to 1,127 on August 9th and now stands at 1.075.  This is a real roller coaster ride and so far we are approximately 3.5% below where we started.

There is no trend so what do you do?  We continue to be mostly invested with some cash on the sidelines.  We remain invested because if the markets go up we want to participate but if the markets go down we want to have opportunities to buy at lower prices.  It appears that both ups and downs will occur so we will have the opportunities and hopefully the economy will gradually recover and the trend will eventually be up.  Meanwhile we remain cautious hold on to stocks of companies that we believe in and we keep some cash.

For additional information contact Richard Taylor.

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