David Kirkpatrick

June 19, 2009

Cloud computing and accounting

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 1:04 pm

Now there’s a header I didn’t expect to be typing anytime soon. A coupling of one of the buzziest of tech buzzwords going and bean counting. Who knows, maybe the two go together like butter and toast. It’s going to be interesting to watch and see how much of cloud computing is just a lot of hot (and in this case opaque) air, and how much turns into real world applications. For the record, I’m not certain some of the actual applications cited in this article truly relate to current concept of cloud computing.

From the link:

Cloud-based computing is an extension of SaaS. Rather than hosting the client and their data on a specific fixed server, the application provider often has multiple servers in multiple locations, and a user can be actually operating on different computers every time they call.

According to Dr. Chandra Bhansali, chief executive of Hauppauge, N.Y.-based AccountantsWorld, one of the earliest providers of Web-based accountant-oriented applications, “This is the time where accountants are starting to see the promise of cloud computing. The most important benefit the Internet brings is collaboration. There is no other profession where the client works so closely with the service provider.”


The burgeoning remote trend has become especially appealing to small businesses that often lack the IT resources of their larger counterparts.

For Penny Banker-Mertz, EA, proprietor of Penny Banker Tax & Financial in Bay City, Texas, being able to work remotely, and with clients that also sometimes need the same remote capability, is a big plus. She uses AccountantsWorld’s Accounting Relief product. “I can review accounting from anywhere I have a high-speed connection. I don’t have to be tied to my office. Some of my clients who are also self-employed like this feature as well.”

February 2, 2009

Tips for small businesses and banking

Filed under: Business — Tags: , , , — David Kirkpatrick @ 5:13 pm

This is an informative article for small business owners and how to develop a solid relationship with a bank. If you fall under this category I highly recommend hitting this link for the entire piece.

From the link:

Q.What is your top piece of advice for small-business owners who are worried about their ability to continue financing their company in this credit environment?

A. You may have a great relationship with your bank, but you should always have a backup relationship. That is really critical in today’s environment. You should visit a number of financial institutions and get a feel for which ones are seeking business like yours. Many banks offer small-business loans, but they don’t specialize in them. And some banks only specialize in small-business loans to certain industries. So ask the bankers if they would be open to extending credit to your business, and if so, under what terms. You may find that the loan window is open for you, and you may find that it’s not.

January 23, 2009

Goodbye and good riddance Cox

I’m with this story. Couldn’t happen too soon and if nothing else, the SEC will be headed up with a lot more competence. Hopefully a whole lot more.

From the link:

Christopher Cox has packed up as chair of the U.S. Securities and Exchange Commission, leaving behind a demoralized agency that failed to spot Bernard Madoff’s alleged mega-fraud or forestall the collapses of Bear Stearns and Lehman Brothers.

His resignation took effect yesterday, a spokesperson said.

During Cox’s 3 1/2 years, the SEC was criticized by lawmakers, investors and its own inspector general as lacking aggressiveness and being deferential to Wall Street banks.

U.S. President Barack Obama picked a fellow Democrat, Mary Schapiro, the head of the U.S. brokerage industry’s self-regulator, to succeed the Bush administration appointee.

“I respect Chris Cox, but there’s no question that the commission has been much too passive in area after area under his leadership,” said law professor Harvey Goldschmid, a former SEC commissioner.

“The morale problems and the lack of public regard for the agency must be immediately addressed by Mary Schapiro.”

January 6, 2009

Watch out for deflation

You may be lamenting the outrageous cost of the bailout, you might have been hurt by the credit crunch and you are most likely gearing up for a 2009 full of only one certainty — that the entire year will be filled with nothing but uncertainty.

After all that, who’s this boogyman breathing hot, rancid air down the back of your neck? Deflation.

From the link:

Deflation, the steadily falling prices that are a byproduct of the virulent global recession and financial-market weakness, has emerged as a top danger for monetary policy markets in the U.S. and Europe, top central bankers made clear Sunday.

In separate comments, Lucas Papademos, the number-two official at the European Central Bank, and Janet Yellen, president of the San Francisco Federal Reserve Bank, and one of the most influential officials at the Fed, said that they would quickly seek to contain the danger of deflation if it emerges in coming months.

Their remarks came at he American Economics Association convention.

Yellen said the U.S. faces a clear risk of deflation: “The odds are high that over the next few years, inflation will decline below desirable levels.”

To keep falling prices from becoming entrenched, the Fed would have to make it clear to the financial markets that such an outcome is unacceptable.

“I am optimistic that, by clearly communicating the Fed’s commitment to low and stable inflation and by backing that commitment up with determined policy actions should the need arise, any deflationary pressures caused by the weak economy can be contained,” Yellen said.

January 2, 2009

Consumer confidence at historic low

Also to be expected under the current conditions. Prudent consumers are keeping the purse-strings pulled tight for right now. Spend if you must, but don’t get extravagant.

From the link:

Consumer confidence hit an all-time low in December, dropping further in the face of rising layoffs, in yet another sign that consumer spending is unlikely to pull the U.S. out of a yearlong recession any time soon.

Consumers have been nervous about spending for months _ putting off big-ticket purchases, forgoing new clothes and choosing store brands at the grocery store _ all of which may make this the worst holiday season for retailers in decades.

The Consumer Confidence Index measured by the Conference Board, a private research group, fell to 38 in December from a revised 44.7 in November. That is its lowest point since the group began compiling the index in 1967, and below the previous low of 38.8 in October. Economists surveyed by Thomson Reuters had expected the index to rise incrementally to 45.

“Deepening job insecurity and falling asset prices are outweighing any optimism consumers may have derived from falling gas prices,” said Dana Saporta, U.S. economist at investment bank Dresdner Kleinwort.

No economic respite in sight

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 7:57 pm

Of course this what everyone is expecting. I’ve blogged this phrase more than twice, but it bears repeating — everyone with a real dog in the fight right now is saying just write 2009 off, ride it out as best you can and hope for some clarity in 2010.

This doesn’t necessarily mean sour faces and cardboard shoes — sometimes tough times aren’t nearly so bad when you’re prepped for them. It’s the unseen haymaker that really hurts. So stiff upper lip, watch the wanton spending and don’t panic. Things will be better, and I bet they’ll be practically fine. Especially when viewed through rose-colored glasses.

From the link:

The number of laid-off workers continuing to draw unemployment benefits bolted to 4.5 million in late December, and even more Americans are expected to join the ranks of the jobless in 2009.

While first-time applications for jobless benefits dropped last week, economists mostly attributed that to the Christmas holiday and cautioned that a more accurate picture of new layoff filings won’t become clear until the holiday season is passed _ around mid-January.

All in all, though, the picture that emerged Wednesday was largely grim and is not expected to improve any time soon.

“It wasn’t a very merry Christmas for most of the labor force and it doesn’t look like it will be a very happy New Year, either,” said Richard Yamarone, economist at Argus Research.

The Labor Department’s report showed that people continuing to draw unemployment benefits jumped by 140,000 to 4.5 million for the week ending Dec. 20, the most recent period for which that information is available. The larger-than-expected increase underscored the difficulties the unemployed are having in finding new jobs.

December 23, 2008

Happy holidays, your retirement plan is now gutted

God bless us everyone.

From the link:

Companies eager to conserve cash are trimming their contributions to their workers’ 401(k) retirement plans, putting a new strain on America’s tattered safety net at the very moment when many workers are watching their accounts plummet along with the stock market.

When the FedEx Corporation slimmed down its pension plan last year, it softened the blow by offering workers enriched 401(k) contributions to make up for the pension benefits some would lose. But last week, with Americans sending fewer parcels and FedEx’s revenue growth at a standstill, the company said it would suspend all of its contributions for at least a year.


”We will have to work more years and retire with less money,” said Lee Higham, a 44-year-old senior aircraft mechanic at FedEx, who has worked there for 20 years. ”That’s what we are up against now.”

FedEx is not the only one. Eastman Kodak, Motorola, General Motors and Resorts International are among the companies that have cut matching contributions to their plans since September, when the credit markets froze and companies began looking urgently for cash. More companies are expected to suspend their matching contributions in 2009, according to Watson Wyatt, a benefits consulting firm.

For workers, the loss of a matching contribution heightens the pain of a retirement account balance shriveling away because of the plunging stocks markets.

December 19, 2008

SEC to require online interactive filings

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 11:31 am

The commission voted in use of XBRL for company filings to be fully implemented in 2014. This move will be a boon for investors in terms of getting public company much more quickly and hopefully in a somewhat less arcane manner.

I’ve done quite a bit of business reporting and had to dig through many, many quarterlies and other various filings. Right now it’s something of an art form to pull the information or number you really want out of those things.

From the link:

Financial disclosures by public companies and mutual funds will be provided in an online interactive format in the next few years under rules adopted Wednesday by federal regulators.

The changes will make it easier for investors to analyze financial data from companies, and the risk and return information provided by mutual funds in prospectuses, Securities and Exchange Commission officials said.

The SEC voted 4-1 in a public meeting to require companies and mutual funds to begin using the so-called XBRL, or extensible business reporting language, in their regulatory filings under a phased-in schedule for companies culminating in 2014. The deadline is Jan. 1, 2011, for mutual funds.

Commissioner Luis Aguilar voted against adopting the rules. He objected to the limitation of legal liability afforded to companies for some types of mistakes in tagging their information.

At a time of market turmoil and shaken investor confidence, Aguilar said before the vote, “We shouldn’t put investors at risk of relying on inaccurate information.”

Many companies already have voluntarily filed their financial data with XBRL data-tagging. Rather than treating financial information as a block of text _ as in a standard Internet page or a printed document _ XBRL language provides a unique identifying tag for each individual item of data, such as company net profit.

That enables users to extract specific information more easily from SEC filings, run calculations and aggregate data as desired. Company revenue, for example, can be tracked over several years without having to open up and review multiple filings.

The XBRL system gets information to investors faster and more reliably, and saves the companies money, the SEC said.

December 8, 2008

Cyberthieves – 1, everyone else – 0

Cybercriminals are staying ahead of security experts and software developers.

This is a problem on many fronts. One, they are stealing money, information and data. They are criminals after all. Two, their activity clogs the “tubes” of the net. Three, because software experts spend an inordinate amount of time dealing with these nutbags, they have less time to spend developing new applications to get to the next generation of computing.

From the link:

Internet security is broken, and nobody seems to know quite how to fix it.

Despite the efforts of the computer security industry and a half-decade struggle by Microsoft to protect its Windows operating system, malicious software is spreading faster than ever. The so-called malware surreptitiously takes over a PC and then uses that computer to spread more malware to other machines exponentially. Computer scientists and security researchers acknowledge they cannot get ahead of the onslaught.


As more business and social life has moved onto the Web, criminals thriving on an underground economy of credit card thefts, bank fraud and other scams rob computer users of an estimated $100 billion a year, according to a conservative estimate by the Organization for Security and Cooperation in Europe. A Russian company that sells fake antivirus software that actually takes over a computer pays its illicit distributors as much as $5 million a year.

With vast resources from stolen credit card and other financial information, the cyberattackers are handily winning a technology arms race.

”Right now the bad guys are improving more quickly than the good guys,” said Patrick Lincoln, director of the computer science laboratory at SRI International, a science and technology research group.

December 2, 2008

Mortgages down to eight-year low

Dark economic days indeed.

From the link:

Mortgage bankers originated just $333 billion in one-to-four family loans in the third quarter, the industry’s worst showing since the fourth quarter of 2000, according to exclusive survey figures compiled by National Mortgage News and the Quarterly Data Report.

Compared to the same quarter a year ago, originations plunged 45%. Based on the third-quarter run-rate, just $1.33 trillion of home mortgages might be originated next year.

If so, it would be the industry’s second weakest year of the decade. The only immediate glimmer of hope for lenders is the prospect of future rate cuts by the Federal Reserve and bargain hunting in the foreclosure market, especially in California where in some neighborhoods prices have declined by as much as 50% from their peaks.

Richard Wilkes, the former head of Sears Mortgage and other shops, is predicting that the industry, and nation at large, is facing what he called the “nightmare of stagflation.”

He noted, “We saw this phenomenon in the late ’70s and early ’80s when we had a recession accompanied by prime rates as high as 21%.”

November 21, 2008

If you’re getting unemployment …

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 2:30 pm

… good news, the checks have been extended.

From the link:

Jarred by new jobless alarms, Congress raced to approve legislation Thursday to keep unemployment checks flowing through the December holidays and into the new year for a million or more laid-off Americans whose benefits are running out.

The economic picture was only getting worse, if Wall Street was any indication. The Dow Jones industrials dropped more than 400 points for a second straight day, reaching the lowest level in more than five years, and the Standard & Poor’s 500 index fell below lows established six years ago.

The Senate’s vote followed Thursday’s government report that laid-off workers’ new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had surged past 10 million.

The White House, which had opposed broader legislation containing the benefits extension, urged passage of the new version and said President George W. Bush would quickly sign it.

November 6, 2008

Zero percent mortgage?

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 4:39 pm

It’s a bold idea, that’s for sure. As long as I could refinance mine at the same terms I say go for it. Of course this concept only applies to foreclosures. Drat.

From the link:

This got me thinking about the home industry and how zero-percent financing would work to start the wheels of buying and selling for the most critical patient in the country’s economic intensive care unit. While not a perfect analogy, automakers and home builders each produce an expensive product that their customers need to finance upon purchase. Why not KB Home, Pulte Homes and Shea? “Open House This Weekend, Zero Percent Financing.”

And taking it another step further, I thought about all that bailout money sitting in those bank vaults. If they won’t lend it, then Uncle Sam should use it to do fund a zero-interest comeback for the housing industry.

What if the federal government bought back foreclosed homes from those banks instead of giving them cash and then turned around and sold them using “zero-percent financing?”

Want to buy a house? Let the federal government sell it to you, as long as you have verified income that shows you can make payments. That median-priced, $300,000 foreclosure would be fixed at zero percent over 30 years, payable to Uncle Sam. Mess up the payments and taxpayers take it back and we try it again with another home buyer under the same terms.

September 18, 2008

Bad economic news is boosting Obama

Filed under: Business, Politics — Tags: , , , , , , , — David Kirkpatrick @ 12:50 pm

This week’s news — and what looks to be a series of bad economic headlines through the vote in November — is helping Obama regain the lead in the presidential horse race.

McCain’s picking Palin gave him a large boost among the GOP faithful. That bounce has hit its limit, and Palin is drawing a bit more negative reaction as more on her background and dealings becomes public.

Interestingly, Obama’s largest bump from economic woes has nothing to do with his strategy and everything to do with McCain’s cluelessness on the subject.

Here’s one good example of a major gaffe, completely self-inflicted:

McCain declared on Monday that “the fundamentals of our economy are strong,” a phrase he has used before. After Democrats pounced, he backtracked and declared the economy to be in a crisis and said “fundamentals are threatened.”

Democrats kept up their assault. “How can John McCain fix our economy if he doesn’t understand it’s broken?” asked an Obama TV ad.

And more on the subject from the Wall Street Journal blog, Political Perceptions:

If Obama is, in fact, regaining his footing, perhaps he is indeed being helped by what many are now seeing as an uncertain McCain reaction to the meltdown in financial markets. Noam N. Levey and Maeve Reston of the Los Angeles Times note that McCain was against bailing out insurance giant AIG before he came out in favor of it, a “rapid about-face.” That turnaround “followed another quick retreat by the Republican presidential nominee earlier this week when he insisted that ‘the fundamentals of our economy are strong’ even as one brokerage house filed for bankruptcy, another nearly went under and the Dow Jones industrial average dropped 504 points. McCain’s reversals underscored the difficulty he has had in finding the right response to the deteriorating economy, the issue voters say is most important. The reversals also highlight the contradiction between McCain’s oft-repeated campaign message — that the federal government should largely stay out of the economy — and his new promises to help voters whose jobs, houses and retirement accounts are disappearing.”

September 3, 2008

Yahoo trading at five-year low

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 11:47 pm

After all the Microsoft offer/takeover attempt, Yahoo is now trading below $19 per share. The move from Microsoft has cost Yahoo significant market share.

From the AccountantsWorld link:

By Tuesday’s closing bell, Yahoo YHOO shares had dropped 3.3% to close at $18.75. The drop was more pronounced than other tech stocks, which slipped in late-day trading tracking a turnaround in the broader market. The Nasdaq COMP closed the day down nearly 0.8% to 2,349. See Tech Stocks.

Yahoo has shed a large portion of its market value since early this year, when the company was a takeover target in a $47 billion offer from Microsoft MSFT.

The software titan offered to buy Yahoo for $31 per share in a half-cash, half-stock transaction on Feb. 1 — when Yahoo shares were trading just above the $19 mark. Yahoo rejected the offer as undervaluing its business, and the two companies spent the next few months battling over the proposed deal, with Yahoo reportedly holding out for a price closer to $40 per share.

In May, Microsoft upped its offer to $33, and then pulled the offer after failing to come to agreement with Yahoo.

Yahoo was heavily criticized by shareholders for failing to close the deal. The company was targeted in a proxy campaign by billionaire activist Carl Icahn, who eventually won three seats on the board under a settlement with the company. As part of a move to improve its market value, Yahoo struck a deal with search rival Google to outsource some of its search activity in exchange for a portion of ad revenue.

August 26, 2008

Credit crunch continues

Not the greatest news from this AccountantsWorld article:

So have inflation worries finally replaced credit conditions atop the list of investors’ biggest concerns? Is the credit crunch finally waning? Not a chance.

An August survey of economists conducted by the National Association for Business Economics did show an uptick in worries about energy prices and inflation, to 16% and 15%, respectively. However, 46% of economists said the credit crunch and the state of the financial system was their top worry.

“The more persistent threat is going to be the credit crunch,” says First American Fundschief economist Keith Hembre. As the economy weakens and the unemployment rate rises, inflation pressures should ease, he says.

But the credit crisis is like a bad song stuck on repeat: Each time it plays, the tune grows more annoying.

August 14, 2008

US corporate tax rate high compared to rivals

I found this Tax Foundation press release via AccountantsWorld. It covers how corporate taxes are falling internationally while the US rate remains unchanged and couches the argument this fact could hurt US economic growth in the future.

Certainly I’m no fan of taxes, but selected releases on studies like this are useless. I didn’t take the time to read the actual study so I’m not sure what it covers, but this release implies other countries are gaining economically on the US because their companies are paying less taxes than last year.

Quite a few economic factors are being left out of this simplistic formulation — little things such as what percentage of national tax revenue contributed by workers in the non-US countries and the corporate tax rates before the reduction.

This Tax Foundation release is food for thought best taken with a grain of salt I think.

The release:

New Study: U.S. Corporate Tax Rate 50% Higher Than Economic Competitors

OECD Study Shows 17th Consecutive Year of Corporate Tax Declining in Non-U.S. Countries While America Stands Still, now Second-Highest

WASHINGTON, Aug. 13 /PRNewswire-USNewswire/ — Tax Foundation President Scott Hodge this morning released the latest Tax Foundation “Fiscal Fact” in response to a new study from the Organisation for Economic Co-Operation and Development (OECD). The OECD study shows that for the 17th consecutive year, the average rate of corporate taxes in non-U.S. countries fell while the U.S. corporate tax rate stayed the same.

The new Tax Foundation study can be found at www.taxfoundation.org/publications/show/23470.html.

As a result of the U.S. failure to lower its corporate tax rate for more than two decades while other major trading nations lowered theirs, the U.S. corporate tax rate is now 50% higher than the OECD average. Nine key trading partners cut their rates during 2007.

“Continued failure by U.S. tax policymakers to keep up with our top global economic competitors means that we’re solidifying a trend that will result in our children and grandchildren not seeing the economic growth we’ve seen in our lifetimes,” noted Hodge. “There’s a real-wallet impact for Americans as we continue to sit idly by while other countries improve the way they do business, and we should be very concerned about jobs, capital, and investments moving from high-tax countries to low-tax countries.”

This comes on the heels of another recent OECD study showing that corporate taxes are the single most harmful tax to GDP growth, more so than personal income taxes or consumption taxes.

The combined federal and state corporate tax rate in the U.S. currently stands at 39.3% (the second-highest among industrialized countries), while the OECD average rate has fallen to 26.6%. Even China has recognized the significance of cutting the corporate tax to become more competitive, reducing their top standard corporate tax rate from 33% to 25% just this year.

Scott Hodge is president of the Tax Foundation, a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937. He leads the foundation’s new CompeteUSAcampaign for business tax reform along with Robert Carroll, Ph.D., Vice President of Economic Policy at the foundation and recently Deputy Assistant Secretary for Tax Analysis at the Treasury Department.

Source: Tax Foundation

Web Site: www.taxfoundation.org/publications/show/23470.html

August 13, 2008

Blackwater facing auditor questions

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 4:38 pm

Embattled Iraq civilian contractor, Blackwater (read about its misdeeds here) is facing some serious auditing questions after apparently obtaining federal contracts meant for small businesses through creative employee designations. The total of the contracts in dispute is over $100 million.

From the AccountantsWorld (second) link:

The companies could have skirted small business size criteria because they counted many workers as independent contractors, not employees, which allowed them to exceed the 1,500-employee ceiling set in some contracts, according to the auditors.

The inspector general’s office found that Blackwater and the other companies’ sizes and revenues may have ”involved misrepresentations,” and suggested that the agency may want to ”determine whether it is appropriate for Blackwater affiliates to continue receiving small business set-aside contracts.”

When rival firms had challenged the 2006 contract for helicopter services to Presidential Airways on grounds that the company was too large, the airline provided data that 28 Blackwater-affiliated entities had a total of only 715 employees.

But the inspector general found that Blackwater had hired more than a thousand independent contractors and treated them as if they were regular employees, with scheduled shifts, for example, which called the size determination into question. The report also said the Small Business Administration should have ”attempted to reconcile discrepancies” in the data Blackwater provided.

August 8, 2008

A cloud computing backgrounder

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 3:26 pm

If you’ve been reading any info tech media lately I’m sure you’ve at least come across the hottest buzzword around — cloud computing.

CIO.com has a fairly comprehensive article titled “Demystifying Cloud Computing.” It’s a great place to start to learn more about the topic.

From the link:

Welcome Cloud Computing

Staten describes the concept as “a pool of abstracted, highly-scalable, and managed compute infrastructure capable of hosting end-customer applications and billed by consumption.”

Simply put, cloud computing is the next generation model of computing services. It combines the concepts of software being provided as a service, working on the utility computing business model, and running on grid or cluster computing technologies. Cloud computing aims to leverage supercomputing power, which can be measured in tens of trillions of computations per second, to deliver various IT services to users through the Web.

In his report, Staten refers to cloud computing as a service delivery platform, which is built on the same basic fundamentals of traditional hosting or SaaS. The building blocks of cloud computing, he says, that take the concept beyond conventional forms of IT service delivery models are:

— A prescripted and abstracted infrastructure. Fundamental to the cloud computing model is standardization of infrastructure and abstraction layers that allow the fluid placement and movement of services. It starts with a flat implementation of scale-out server hardware that, for some clouds, serves as both compute and storage infrastructure (others are leveraging SAN storage). Their infrastructure enables the cloud and is decided upon solely by the cloud vendor; customers don’t get to specify the infrastructure they want — a major shift from traditional hosting.

— Fully virtualized. Nearly every cloud computing vendor abstracts the hardware with some sort of server virtualization. The majority employ a hypervisor to keep costs low. Some have solutions that span virtual and physical servers via another middleware element, such as a grid engine.

— Equipped with dynamic infrastructure software. Most clouds employ infrastructure software that can easily add, move, or change an application with very little, if any, intervention by cloud provider personnel.

— Pay by use. Most clouds charge by actual use of resources in CPU hours, gigabits (Gbs) consumed, and gigabits per second (Gbps) transferred, rather than by a server or with a monthly fee. Their pricing is compelling.

— Free of long-term contracts. Most cloud vendors let you come and go as you please. The minimum order through XCalibre’s FlexiScale cloud, for example, is one hour, with no sign-up fee. This makes clouds an ideal place to prototype a new service, conduct test and development, or run a limited-time campaign without IT commitments.

— Application and OS independent. In most cases, the architectures of clouds support nearly any type of app a customer may want to host as long as it does not need direct access to hardware or specialized hardware elements. Cloud vendors told say there’s nothing about their infrastructures that would prevent them from supporting any x86-compatible OS.

— Free of software or hardware installation. You tap into a cloud just as you would any remote server. All you need is a log-in. There’s no software or hardware requirement at the customer end nor the need for specialized tools.

Update 8/11/08 — More on cloud computing from AccountantsWorld.com. I don’t if it’s just the IT updatesI receive or not, but it seems I can’t turn around without hearing something about cloud computing right now.

Update number 2 from 8/11 — See what I mean? Here’s another CIO.com article, this time featuring Dell. It appears the Texas-based computer company tried to copyright the term “cloud computing,” that effort has hit some Fed roadblocks. Dell does own www.cloudcomputing.com.

August 5, 2008

GAAP not going gently into the good night

Filed under: Business — Tags: , , — David Kirkpatrick @ 3:18 pm

Things are not becoming more clear for US business and accounting standards:

A lot of people are wondering when the U.S. will adopt the same international standards for financial reporting that Europe and the rest of the world seem to be moving toward.

The rule-based, Generally Accepted Accounting Principles (GAAP) have been around in the U.S. for years, but differ from the principle-based International Financial Reporting Standards (IFRS) that the European Union adopted in 2005. Currently more than 100 countries have moved to incorporate or are allowing IFRS, according to the global tax and advisory service firm Ernst & Young, in a presentation last week.

While neither GAAP nor IFRS is a perfect system, having two separate systems is costly and confusing for global companies. Most financial experts agree that a universal accounting standard would strengthen overall global markets.

“Virtually everyone is saying yes, the U.S. should join IFRS and get on the bandwagon,” said Lisa Filomia-Aktas, a partner and financial services and accounting advisory services leader for Ernst & Young.

However, it is more likely there will be a convergence of standards, rather than the U.S. abandoning GAAP altogether and converting to the international standard, she said.

“It is clear that the world is not moving to adopt the U.S. standards,” she said.

The Securities and Exchange Commission is seriously considering the international standards, and plans to host a roundtable today, Aug. 4, to compare how both GAAP and IFRS performed during the recent period of market turmoil.

August 4, 2008

Jobless rate climbs

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 6:05 pm

Bad news for the economy, and I’d think pretty bad news for McCain as well.

From the link:

The unemployment rate in the United States climbed to a four-year high of 5.7 percent in July as employers cut 51,000 jobs, dashing the hopes of an influx of young people looking for summer work.

Payroll cuts, however, weren’t nearly as deep as the 72,000 economists were forecasting. And, job losses for both May and June were smaller than previously reported.

July’s reductions marked the seventh straight month where employers eliminated jobs. So far, this year, the economy has lost a total of 463,00 jobs.

The latest snapshot, released by the Labor Department on Friday, showed that employers remain cautious as a lack of credit stunts their expansion plans and willingness to hire. Fallout from the housing slump and high energy prices also are weighing on employers.

The increase in the unemployment rate to 5.7 percent, from 5.5 percent in June, in part came as many young people streamed into the labor market looking for summer jobs. This year, however, fewer of them were able to find work, the government said. The unemployment rate for teenagers jumped to 20.3 percent, the highest since late 1992.

July 31, 2008

Credit crunch hits small biz

Filed under: Business — Tags: , , , — David Kirkpatrick @ 2:43 pm

Small businesses are strainging under credit card debt. The analysis comes on the heels of Advanta Corp.’s just released earnings report. Advanta is an issuer of small-business credit cards.

From the AccountantsWorld.com link:

The financial health of small businesses is deteriorating quickly, if Advanta Corp.’s earnings, released yesterday, are any indicator.

The issuer of small-business credit cards from Spring House said it gave up on collecting $130.5 million of its customers’ debts in the second quarter, up from $102.1 million in the first quarter and $50.7 million a year earlier.

“The economy continues to challenge small-business owners and their ability to pay bills,” said Dennis Alter, chairman and chief executive officer of Advanta, which last year was the fifth-largest credit card lender to small businesses, according to the Nilson Report.

Advanta has ratcheted back on growth while it tries to get a handle on troubled loans to its customers, which typically have 10 or fewer employees and less then $1 million in annual revenue.

Obama attacks McCain on taxes

Filed under: Politics — Tags: , , , , — David Kirkpatrick @ 2:32 pm

Obama seized the moment after McCain waffled on a tax question this past weekend and has gone on the economic issue attack. He’s hammering McCain on the midde-class, a group that has been seen to seemingly vote against its economic interests in the past.

With his already very weak campaigning on economic issues and poor performance last weekend, McCain could be damaged by this attack and not have much of a response. I’m not sure the shake up at the top of McCain’s team to bring in Bush 43 strategists is going to help him.

From the AccountantsWorld.com (second) link:

Barack Obama tapped into the economic worries of middle-class voters on Wednesday, saying rival John McCain would stay on the “reckless” economic course taken by President George W. Bush.

With polls showing a tight race, the economy is at the forefront of U.S. voter concerns as gas prices, inflation and home foreclosure rates soar. As the campaigns head into the stretch before the August and September nominating conventions, Obama has tried to portray his Republican rival as four more years of unpopular Bush policies.

“We can choose to go another four years with the same reckless fiscal policies that have busted our budget, wreaked havoc in our economy, and mortgaged our children’s future on a mountain of debt; or we can restore fiscal responsibility in Washington,” Obama said in remarks prepared for an audience in Springfield, Missouri, the first stop on a bus tour devoted to discussing economic security.

He slammed McCain, saying that his rival wants to cut taxes for the wealthy, while his own policies would repeal Bush’s tax cuts for the rich, give $1,000 tax cuts to 95 percent of workers and provide relief to struggling homeowners.

Obama’s comments come a day after McCain battled to allay concerns among his conservative voter base that he is open to raising taxes to shore up America’s federal retirement program.

July 29, 2008

401(K) debit card — a bad, bad idea

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 1:20 pm

This article is the first I’ve ever heard of the concept of a 401(K) debit card, but man the idea is stupid. The penalties are so high for tapping into 401(K) money early, that “nuclear option” should be reserved for financial relief of the last resort.

I can’t believe Congress is even debating this idea. Guess the bank lobby is flexing some muscle. Banking has such a great track record over the last fifteen years or so for looking out for the best interests of its customers …

From the link:

It’s bad enough that 40% of workers in their 20s and 30s cash out their 401(k)s when they switch jobs, even though taxes and penalties decimate the balances to almost half, according to a CMI survey of 1,200 people in January commissioned by Fidelity.

Worse, even, a small percentage of 401(k) participants take out loans or hardship withdrawals from their retirement savings, which average only $122,000 in the first place, with a national median balance of $66,000, data from the Investment Company Institute and the Employee Benefit Research Institute shows.

Now Congress is debating the pros and cons of supplying people with 401(k) debit cards.

Are they serious? Putting this piece of plastic in investors’ hands would be akin to telling them to live for today and go out and spend whatever money they’ve saved for retirement.

Fed not raising rates before next year

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 1:05 pm

This is an interesting article from AccountantsWorld.com covering how the short-term interest rates are not go up before next year given the current market conditions.

From the link:

Earlier in the summer, experts thought rates might go higher by December. But this view has receded in recent weeks as financial markets have destabilized anew and leading indicators point to slower growth over the remainder of the year and into next.

“I am a little less confident than I was before” that the Fed would hike rates this year, said former San Francisco Fed Bank President Robert Parry in an interview.

“I frankly thought we’d see more signs that the weakness of the economy was going to disappear,” said Parry.

The tax rebates have not packed the hoped for wallop. The crisis of Fannie Mae and Freddie Mac has sparked renewed stress in financial markets.

This has put the Fed in something of a box. But investors should keep alert as the Fed is looking to escape.

The simple reason is that, at the moment, almost all Fed officials, both hawks and doves, would like nothing better than to see interest rates move up from the “emergency” low level of 2%.

For the hawks on the panel, it would mean the Fed was backing up its warnings that higher rates are needed to combat ugly inflation data.

For the doves, higher rates would be good news that the economy could be moved out of the intensive-care unit.

At the moment, the doves don’t think the economy is strong enough to swallow the tough medicine of higher interest rates. And they are in the majority.

July 28, 2008

SEC and Fed want to toughen rules

This AccountantsWorld.com article outlines an effort by the SEC and the Federal Reserve to press Congress for additional regulatory and supervisory powers.

From the link:

At a Congressional hearing on how to modernize financial regulation, the S.E.C. and the Fed laid out similar, if somewhat competing, visions for a new regime capable of monitoring commercial and investment banks to ensure they remain financially sound in order to prevent another credit crisis.


Both the S.E.C. chairman, Christopher Cox, and the New York Federal Reserve Bank president, Timothy F. Geithner, said that the current patchwork of regulatory agencies, much of which dates back to the Depression of the 1930s, deserved part of the blame for the yearlong financial market turmoil.

But Mr. Cox said his agency should oversee investment banks, while Mr. Geithner said the Fed must have a direct supervisory role over any firms that borrow from the central bank.

”It’s very important that we have a role in consolidated supervision of these institutions because you will not have good judgments made by this central bank, this Federal Reserve, in the future unless we have the direct knowledge that comes with supervision,” Mr. Geithner told the House Financial Services Committee.

July 18, 2008

Swiss banking may never be the same

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 11:15 am

Anonymous banking in Europe is taking another hit now that the IRS is after Swiss bank, UBS for aiding US citizens in dodging taxes.

The first of the Germans caught doing the same at a Liechtenstein bank was sentenced this week: 

Judges in the western German city of Bochum told the first multi-millionaire up for trial he would probably receive a suspended term of two years’ jail for evading 7.5 million euros ($11.8 million) in tax between 2001 and 2006.

Elmar Schulte, from the western city of Bad Homburg, was found guilty of six counts of tax evasion after depositing several million euros in the Alpine principality of Liechtenstein and failing to declare the interest made.

The UBS case is interesting in that the bank is accused of, and admits to, providing advice and aid to US clients in avoiding US taxation. The IRS is asking for help from Swiss authorities in the case:

The U.S. Internal Revenue Service has asked the Swiss government to help in an expanding investigation of alleged tax evasion by U.S. clients of banking giant UBS AG.

All of this bodes poorly for UBS since the CFO of the bank’s global wealth management and business banking unit has already apologized for the bank’s behavior in testimony to the U.S. Senate Committee on Homeland Security and Government Affairs’ Permanent Subcommittee on Investigations:

“I am here to make absolutely clear that UBS genuinely regrets any compliance failures that may have occurred,” said Branson, who joined the Swiss bank in 1997 and now oversees risk management as part of his duties as finance chief. “We will take responsibility for them and will not minimize them.” Branson announced that UBS would stop offering offshore accounts to U.S. citizens and fully cooperate with the efforts of U.S. regulators to get the names of its U.S. clients despite the difficulties presented by Swiss privacy laws.

To be sure, it’s unlikely Branson was surprised by the hearing’s critical tone. In June, former UBS AG banker Bradley Birkenfeld pled guilty to helping one client hide $200 million in assets in Switzerland and Liechtenstein, and implicated UBS in helping to shelter $20 billion overall.

Earlier this month, the IRS won court authority to compel UBS to provide the names of all its clients in the US, a list that could exceed 19,000, according to a report released by the subcommittee today.

Interesting to see where all this will lead, but it looks like anonymous banking in northern Europe may be coming to an end. It seems both French and German authorities are anxiously waiting in line to take a crack at Swiss banking once the IRS finishes its work.

Update: Here’s two stories from AccountantsWorld.com. “Report reveals UBS role in tax scandaland “UBS ‘regrets’ bank failings, executive tells tax inquiry

June 12, 2008

Strong dollar, weak dollar — a primer

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 1:43 pm

There’s a lot of talk in the news these days about our “weak” dollar. If you haven’t taken Econ 101 (and maybe even if you have) the concept of a strong dollar, or a weak dollar may be not be all that clear.

AccountantsWorld.com has posted a nice little Q&A covering the basics of the issue. There are positives and negatives to both states for the US dollar, and either extreme is not good. The primary consequence of our current weak US dollar that most everyone is feeling and talking about is its direct relationship to the cost of gas at the pump.

From the link:

Q: What is the relationship between a weak dollar and oil and gasoline prices?

A: It is a direct one, since oil generally is bought and sold in dollars. The more the value of the greenback goes down, the more it costs to buy a barrel of oil.

Of course, there are other factors involved in today’s roughly $4-a-gallon (€0.64-a-liter) gasoline prices. They include soaring demand from China and India, political turmoil in some oil-producing regions, the inability or refusal of major oil-exporting countries to increase production, and market speculation.

The weaker dollar has been a major factor, and one that could threaten the chances of a U.S. economic recovery.

Q: How long has this been going on?

A: The dollar has been on an extended slide against other major currencies, especially the euro and the Japanese yen, for about five years, during which the U.S. trade deficit with the rest of the world generally continued to widen. That required more borrowing from abroad and further weakening the dollar. At the same time, the economies of Europe expanded, driving up the value of the euro against the dollar. And recent sharp interest cuts by the Fed to deal with the U.S. housing and credit crises also have served to push down the dollar’s value. The dollar has fallen sharply against the euro in the past year.

Q: What is the U.S. government’s position on the dollar?

A: U.S. officials, usually the treasury secretary, have long repeated the mantra that a strong dollar is in the nation’s best interest. Yet the administration did nothing to back up its assertion with action, and many policy-makers clearly welcomed the slide, mainly because it helped to keep U.S. exports expanding, a rare bright spot in a troubled economy.

During the last week, however, officials have signaled that they do not want further declines. Bush, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke have issued statements backing the need for a strong dollar and expressing misgivings about the economy.

“A strong dollar is in our nation’s interests. It is in the interests of the global economy,” Bush said Monday as he embarked on a European tour.

April 7, 2008

Massive job loss one more recession red flag

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:24 pm

I’ve posted on the US recession in the past. Here’s a story from AccountantsWorld.com (free registration req.) on March’s massive job loss being one more signal a recession is here and looks to be significant.

There’s no reason to go around preaching doom-and-gloom, but it is important to be realistic about the current economic situation. Something the administration in DC has had some measure of difficulty with.

From the second link:

It is no longer a question of recession or not. Now it is how deep and how long.

Workers’ pink slips stacked ever higher in March as jittery employers slashed 80,000 jobs, the most in five years, and the national unemployment rate climbed to 5.1 percent. Job losses are nearing the staggering level of a quarter-million this year in just three months.

For the third month in a row total U.S. employment rolls shrank _ often a telltale sign that the economy has jolted dangerously into reverse.

At the same time, the jobless rate rose three-tenths of a percentage point, a sharp increase usually associated with times of deep economic stress.

The grim picture described by the Labor Department on Friday provided stark evidence of just how much the jobs market has buckled under the weight of the housing, credit and financial crises. Businesses and jobseekers alike are feeling the pain.

“It is now very clear that the fat lady has sung for the economic expansion. The country has slipped into a recession,” said Stuart Hoffman, chief economist at PNC Financial Services Group. Indeed, there is widening agreement that the first recession since 2001 has arrived. Even Ben Bernanke, in a rare public utterance for a Federal Reserve chairman, used the “r” word, acknowledging for the first time this week that a recession was possible.