Fitch, Inc., the International ratings agency downgraded Spain's long-term foreign and local currency Issuer Default Ratings (IDRs) to 'AA+' from 'AAA', caused a massive sell-off of equities and a sharp decline in the euro.
Fitch cited an inflexible labor market and a restructuring of regional and local savings banks as hindrances to the pace of adjustment.
"This should exacerbate the tremendous volatility we've seen in global stocks as the world wrestles with the idea of a debt-based collapse," said Chip Hanlon, president of Delta Global Advisors in Huntington Beach, California. "Adding to this is the fact that no one wants to be long over a holiday weekend."
The release in the drop of Spain's credit rating fueled investor fear in an already emotionally driven market. Those who are able to control their emotion and not allow it to control their trading decisions are remaining profitable in the current economic climate.
Saturday, May 29, 2010
Monday, May 24, 2010
Restoring American Financial Stability Act of 2010 – A Day Trader’s Horror or a Brighter Future?
Starting in 2008, millions of Americans lost their jobs, homes, and savings while countless businesses have failed or downsized. Most of the so-called financial gurus can agree that lack of cash flow or insufficient liquidity caused our current economic crisis. With a devastating domino effect of collapsing investment banks and other institutions, this downturn is the worst financial crisis since the Great Depression.
The financial regulatory reform bill, titled “Restoring American Financial Stability Act,” was written in an attempt to create a sound economic foundation. The objective of this new legislation is to stimulate job growth, end the “too big to fail” theory, restrain or control Wall Street, protect consumers, and most importantly, prevent a future financial crisis.
The bill summary delivers a serene and assuring feeling: “Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street, End Too Big to Fail, and Prevent Another Financial Crisis.” The statement portrays a seemingly well-intended and much needed change.
Much Needed Change of Corporate Accountability and Shareholder Protection
The two most critically needed legislation additions contained within the bill are the prevention of “too big to fall” bailouts and shareholders' ability to vote on executive compensation.
With the past bailouts of auto and financial industries, these large corporations were not held financially responsible for their actions. This promoted further incautious decisions and substantially higher risk taking with the expectation that taxpayers would catch the fall. The elimination of taxpayer funded “too big to fall” bailouts will restore accountability and lead to more responsible business management.
Another positive section of the bill is the requirement of procedures for annual shareholders to approve executive pay. This will enable shareholders of a corporation to cast a non-binding vote on executive compensation and other business affairs.
The Strongest Consumer Protections in History OR is the Government Overstepping its Bounds?
Political parties are in yet another heated debate over this bill. Arguably, highlights of the bill can be interpreted as Socialism. Socialists advocate ownership and control of production, capital, land, and property by the community as a whole in the interest of all people.
Limiting of large, complex financial companies by discouraging excessive growth can be viewed as an anti-capitalist approach. Capitalism by definition is an economic system in which the means of production are privately owned; supply, demand, and price are set by market forces rather than economic planning.
The bill has strict rules for capital, leverage, liquidity, risk management and sets other requirements as companies grow in size and complexity. In addition, through the Volcker Rule, the bill prohibits banks from proprietary trading, investment in and sponsorship of hedge funds and private equity funds, and limits banks' relationships with hedge funds and private equity funds. These restrictions could also be interpreted as Socialism.
A Day Trader’s Horror or a Brighter Future?
As traders, we pursue the American dream with the freedoms provided by our great nation. As a day trader, and tax professional, I spend countless hours researching trader tax issues, self-directed retirement plans, and corporate/ LLC statutes. Interfacing with the various government agencies such as the IRS, Department of Labor, and Secretary of State, I have experienced our government’s bureaucratic red tape, lack of organization and slow results first hand.
The Restoring American Financial Stability Act of 2010 may be a good way to protect traders and investors from unscrupulous business and financial practices and it may also sustain our banking and financial industry. I worry though that additional government regulation may inhibit the trading of the people and firms that drive today’s success in the markets.
The financial regulatory reform bill, titled “Restoring American Financial Stability Act,” was written in an attempt to create a sound economic foundation. The objective of this new legislation is to stimulate job growth, end the “too big to fail” theory, restrain or control Wall Street, protect consumers, and most importantly, prevent a future financial crisis.
The bill summary delivers a serene and assuring feeling: “Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street, End Too Big to Fail, and Prevent Another Financial Crisis.” The statement portrays a seemingly well-intended and much needed change.
Much Needed Change of Corporate Accountability and Shareholder Protection
The two most critically needed legislation additions contained within the bill are the prevention of “too big to fall” bailouts and shareholders' ability to vote on executive compensation.
With the past bailouts of auto and financial industries, these large corporations were not held financially responsible for their actions. This promoted further incautious decisions and substantially higher risk taking with the expectation that taxpayers would catch the fall. The elimination of taxpayer funded “too big to fall” bailouts will restore accountability and lead to more responsible business management.
Another positive section of the bill is the requirement of procedures for annual shareholders to approve executive pay. This will enable shareholders of a corporation to cast a non-binding vote on executive compensation and other business affairs.
The Strongest Consumer Protections in History OR is the Government Overstepping its Bounds?
Political parties are in yet another heated debate over this bill. Arguably, highlights of the bill can be interpreted as Socialism. Socialists advocate ownership and control of production, capital, land, and property by the community as a whole in the interest of all people.
Limiting of large, complex financial companies by discouraging excessive growth can be viewed as an anti-capitalist approach. Capitalism by definition is an economic system in which the means of production are privately owned; supply, demand, and price are set by market forces rather than economic planning.
The bill has strict rules for capital, leverage, liquidity, risk management and sets other requirements as companies grow in size and complexity. In addition, through the Volcker Rule, the bill prohibits banks from proprietary trading, investment in and sponsorship of hedge funds and private equity funds, and limits banks' relationships with hedge funds and private equity funds. These restrictions could also be interpreted as Socialism.
A Day Trader’s Horror or a Brighter Future?
As traders, we pursue the American dream with the freedoms provided by our great nation. As a day trader, and tax professional, I spend countless hours researching trader tax issues, self-directed retirement plans, and corporate/ LLC statutes. Interfacing with the various government agencies such as the IRS, Department of Labor, and Secretary of State, I have experienced our government’s bureaucratic red tape, lack of organization and slow results first hand.
The Restoring American Financial Stability Act of 2010 may be a good way to protect traders and investors from unscrupulous business and financial practices and it may also sustain our banking and financial industry. I worry though that additional government regulation may inhibit the trading of the people and firms that drive today’s success in the markets.
Thursday, May 13, 2010
U.S. Posts 19th Straight Monthly Budget Deficit - Will IRS Come to the Rescue?
The United States posted an $82.69 billion deficit in April, nearly four times the $20.91 billion shortfall registered in April 2009 and the largest on record for that month, the Treasury Department said on Wednesday.
Receipts in April -- mostly from income taxes -- were $245.27 billion, up from $153.36 billion in March but lower than the $266.21 billion taken in during April 2009. Receipts from individuals, who faced an April 15 filing deadline for paying 2009 taxes, fell to $107.31 billion from $137.67 billion in April 2009.
The U.S. full-year deficit this year is projected at $1.5 trillion on top of a $1.4 trillion shortfall last year!
"Due to incorrectly filed returns, many taxpayers have already donated hundreds of millions of dollars to the IRS!" said Michelle Boyer CPA, of Boyer Tax Services, P.L.L.C. - the largest online tax preparation and tax reduction planning resource, announced.
With this large government deficit, stay clear of the IRS cross hairs! Now more than ever it’s extremely important to make sure your tax returns are filed correctly.
Astonishingly, misreporting of income not only effects those who self-prepared using tax software programs such as TurboTax® or H&R Block At Home™, but it also plagues those who used a paid preparer. With a wizard-like interface, tax software programs are narrowly focused "cookie cutter" approaches to our tax code of over 60,000+ pages of regulation.
For those of you who hired an accountant or CPA, we have found that a general review could reveal costly mistakes. Although you may have paid your tax professional good money to prepare your returns, the ultimate burden of responsibility lies with you, the taxpayer.
Racing to beat the April 15th deadline creates what we call "tax time anxiety". This leads to poor judgment and mistakes that cost you thousands of dollars in additional taxes. Unfortunately, the FDA does not recognize "tax time anxiety" as a medical condition nor is there approved medication for treatment. The good news is there is a cure! And yes, it could be tax deductible!
The common phrase "haste makes waste" is particularly true when it comes to the complexities of preparing tax returns. Being rushed when gathering records creates a multitude of opportunities for errors even with the most organized and detail minded people. During tax season, most tax professionals are overwhelmed. The available time to spend on each tax form becomes stretched thin. Chances of poor judgment and errors are statistically higher during this time. These costly mistakes are compounded with preparers who lack organization skills and work ethics.
There is high probability that you failed to capture certain tax deductions or missed a tax code change that could reduce your tax liability. In addition, you may have been given bad advice from a professional preparer or tax software program.
Don't become the co-signer on 2.9 trillion of projected government debt!
To help ensure accuracy, maximize your tax savings, and reduce your chances of being audited, consider the following for your 2009 tax return.
Amend your tax return - Many worry that an amended return will increase the chances of an audit. The IRS clearly states that this is not the case. An amended return is much better than an incorrect return. Always take into consideration, filing an amended return. A correctly amended return will decrease your chances of being audited and could put additional cash back into your pocket!
Carefully select a knowledgeable tax professional - You are urged to use care and caution when choosing a tax preparer. Remember, you are legally responsible for what is on your tax return even if another individual or firm prepared it. Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it is important to find a qualified tax professional.
The IRS has provided the following tips to help you choose a preparer who will offer the best service for your tax preparation needs.
Report abusive tax preparers and suspected tax fraud to the IRS on Form 3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A here or order by mail at 800-829-3676.
Boyer Tax Services, P.L.L.C. Discounted Flat Rate Tax Return Review Service
Stay clear of the IRS cross hairs! Let our tax professional review your return now to ensure accuracy. Now more than ever it’s extremely important to make sure your tax returns are filed correctly. Our new discounted flat rate is only good until the end of the month! For more information visit our Tax Return Review Service page.
Receipts in April -- mostly from income taxes -- were $245.27 billion, up from $153.36 billion in March but lower than the $266.21 billion taken in during April 2009. Receipts from individuals, who faced an April 15 filing deadline for paying 2009 taxes, fell to $107.31 billion from $137.67 billion in April 2009.
The U.S. full-year deficit this year is projected at $1.5 trillion on top of a $1.4 trillion shortfall last year!
"Due to incorrectly filed returns, many taxpayers have already donated hundreds of millions of dollars to the IRS!" said Michelle Boyer CPA, of Boyer Tax Services, P.L.L.C. - the largest online tax preparation and tax reduction planning resource, announced.
With this large government deficit, stay clear of the IRS cross hairs! Now more than ever it’s extremely important to make sure your tax returns are filed correctly.
Astonishingly, misreporting of income not only effects those who self-prepared using tax software programs such as TurboTax® or H&R Block At Home™, but it also plagues those who used a paid preparer. With a wizard-like interface, tax software programs are narrowly focused "cookie cutter" approaches to our tax code of over 60,000+ pages of regulation.
For those of you who hired an accountant or CPA, we have found that a general review could reveal costly mistakes. Although you may have paid your tax professional good money to prepare your returns, the ultimate burden of responsibility lies with you, the taxpayer.
Racing to beat the April 15th deadline creates what we call "tax time anxiety". This leads to poor judgment and mistakes that cost you thousands of dollars in additional taxes. Unfortunately, the FDA does not recognize "tax time anxiety" as a medical condition nor is there approved medication for treatment. The good news is there is a cure! And yes, it could be tax deductible!
The common phrase "haste makes waste" is particularly true when it comes to the complexities of preparing tax returns. Being rushed when gathering records creates a multitude of opportunities for errors even with the most organized and detail minded people. During tax season, most tax professionals are overwhelmed. The available time to spend on each tax form becomes stretched thin. Chances of poor judgment and errors are statistically higher during this time. These costly mistakes are compounded with preparers who lack organization skills and work ethics.
There is high probability that you failed to capture certain tax deductions or missed a tax code change that could reduce your tax liability. In addition, you may have been given bad advice from a professional preparer or tax software program.
Don't become the co-signer on 2.9 trillion of projected government debt!
To help ensure accuracy, maximize your tax savings, and reduce your chances of being audited, consider the following for your 2009 tax return.
Amend your tax return - Many worry that an amended return will increase the chances of an audit. The IRS clearly states that this is not the case. An amended return is much better than an incorrect return. Always take into consideration, filing an amended return. A correctly amended return will decrease your chances of being audited and could put additional cash back into your pocket!
Carefully select a knowledgeable tax professional - You are urged to use care and caution when choosing a tax preparer. Remember, you are legally responsible for what is on your tax return even if another individual or firm prepared it. Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it is important to find a qualified tax professional.
The IRS has provided the following tips to help you choose a preparer who will offer the best service for your tax preparation needs.
- Check the person’s qualifications Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
- Check on the preparer’s history Check to see if the preparer has any questionable history with the Better Business Bureau, check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the Office of Professional Responsibility for enrolled agents.
- Find out about their service fees Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers can.
- Make sure the tax preparer is accessible Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
- Provide all records and receipts needed to prepare your return Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
- Never sign a blank return Avoid tax preparers that ask you to sign a blank tax form.
- Review the entire return before signing it Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
- Make sure the preparer signs the form A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.
Report abusive tax preparers and suspected tax fraud to the IRS on Form 3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A here or order by mail at 800-829-3676.
Boyer Tax Services, P.L.L.C. Discounted Flat Rate Tax Return Review Service
Stay clear of the IRS cross hairs! Let our tax professional review your return now to ensure accuracy. Now more than ever it’s extremely important to make sure your tax returns are filed correctly. Our new discounted flat rate is only good until the end of the month! For more information visit our Tax Return Review Service page.
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