How Apple Inc. Legally Evades Paying Billions In Taxes

Image attribution: Nk; CC BY-SA 2.5

The statutory federal corporate tax rate in the U.S. is 35 percent, but Apple Inc. does not pay anywhere close to this amount, and it is legal. This is largely due to profits earned overseas that have not been repatriated to the U.S., but also because of tax strategies such as issuing stock options, accelerated depreciation of capital investments and avoiding state income tax via business subsidiaries.

Complete article link: http://www.helium.com/items/2320614-how-apple-inc-avoids-taxes

Financial News 04/30/2012

• BBC: 80 million people to enter workforce in next 2 yrs per ILO
• TP: 7 states are considering income tax repeal
• BEA: March consumer savings rate was 3.8%, prices up .2%
• Bloomberg: U.S. budget failure currently being perfected
• CNBC: Prominent economist says lower home prices are good
• CNN Money: 53.6% of Americans pay income tax
• Option Queen: "Generational welfare" is bad for the economy
• BI: fewer smaller businesses starting than in the last four decades
• Wall Street 24/7: Over "330" (million) wireless customers in U.S. 
• Reuters: Spanish GDP down .3% in Q1, 2012
• MW:  S&P negatively adjusts 16 Spanish banks' credit ratings

Financial News 04/27/2012

• Business Insider: U.S. becoming a plutocracy per political economist
• Reuters: U.S. GDP slowed to around .625% in Q1, 2012
• AOL: Strike zones, up-sells, demos & motif all target impulse buying
• BEA: U.S. GDP grew by .55% for Q1, 2012, 2.2% annualized
• CNN Money: DVA to spend $57 billion on annual disability benefits
• BLS:  Labor costs increased .4% for Q1, 2012
• CNBC: Italian 10-yr bond prices up to 5.84%, highest since January
• Bloomberg: French unemployment 10%
• WP: Spanish unemployment now 24.4%, S&P downgrades to BBB+
• BBC: Bank of Japan creates $123 billion to stimulate economy
• Reuters: Chinese 2012 trade to slow per Ministry of Commerce

Financial News 04/26/2012

• Bloomberg: Treasury Secretary says "fiscal cliff" awaits at year end
• Chicago Fed: National economic activity fell .29% in March
• NYT: Federal Reserve guided by pro-banking rather than U.S. agenda
• Daily Finance: Average American to see 28% drop in income after retiring
• DOL: 388,000 job losses were filed the week ending 04/21/12
• CNN Money: U.S. monetary policy is fueling a bond price bubble
• Business Insider: Just 10 companies sell most products consumers buy
• Moody's: Q2, 2012 national GDP to slow from 2.7% to 2%
• CNBC: French real estate prices in overpriced bubble per analyst
• AP: Italy's 6-month bond rates sold, but increased .66% to 1.77%
• Reuters: 40 economists say Euro-zone states headed for deeper recession

Severance Negotiation Tips

Image attribution: Stuart Miles; standard royalty free license

Severance packages are usually not a requirement when negotiating an employment contract, or the termination of such. However, these contractual instruments do afford individuals some opportunity in how they actualize their own value as business assets. The severance negotiation tips in this article outline what is involved and what is needed when negotiating  a severance package.

Complete article link: http://www.helium.com/items/2319064-severance-negotiation-tips

Financial News 04/25/2012

• Business Insider: Financial system is being rigged per bank economist
• CNN Money: Next 365 days to probably bring an ominous financial event
• Census: Durable goods orders for March down 4.2%
• CNBC: "Financial repression" an alternative to "fiscal austerity"
• CFAP: 8.3 million children affected by real estate foreclosures 
• AP: Apple earnings report not a bell weather, but boosts sentiment
• Huff Post: U.S. financial system still in trouble per Frontline investigation
• BBC: EU seeking to spend more as it debates 6.8% budget increase
• AP: European businesses and consumers reluctant to borrow
• BBC: UK economy now in double-dip recession
• Reuters: S&P downgraded India's credit outlook to negative

Financial News 04/24/2012

• CNBC: Federal Reserve expected to remain cautious through election
• S&P: 10 & 20 City composite home prices fell .8% in February
• Daily Finance: 73 yr old grandmother arrested for running drug ring
• Reuters: Walmart loses $10 billion on bribery investigation
• Bloomberg: Social Security projected to run out of funds by 2035
• CNN Money: Medicare to fall short on funds in 12 years
• AP: Senate republicans attempting overturn union voting rules
• MarketWatch: Bank failures to cost FDIC $12 billion through 2016
• Bloomberg: U.K. monthly budget deficit £2+ bln higher than forecast
• Business Insider: German fiscal austerity challenged from within
• NYT: Loan defaults could strain under capitalized Chinese banks

Comparisons of The Global Cost of Labor Do Not Account For Independent Contractors

In China it takes 8 years and 10 months to earn the equivalent of $15,080 per the following infographic. Although this makes the laborers in foreign countries seem poor, U.S independent contractors are not subject to minimum wage protection and therefore are also prone to similar comparison in some cases. If the per capita U.S. median income of approximately $27,334 is used it takes even longer.

Click the image to enlarge

Source: FixR

Manufacturers Re-Sourcing Jobs to the United States

Image attribution: Cudahy; CC BY-SA 2.0

Large manufacturers are re-shoring jobs to the United States because of wage inflation and other cost factors associated with keeping manufacturing operations overseas. The phenomenal is relatively small, but is consistent with the flat to contracting cost of labor in the United States.

Complete article link: http://www.helium.com/items/2318110-manufacturers-re-sourcing-jobs-to-the-us

Financial News 04/23/2012

• NYT: Average income of bottom 90% of Americans below 1970's levels
• Forbes: U.S is not as pro-business as China
• CNN Money: "Mancession" now "hecovery" as men gain 76.5% of new jobs
• Option Queen: Wages contracting amidst central bank money flood
• Bloomberg: Dollar due for an uptick as Euro currency is pressured down
• MarketWatch: Slow business hiring luke warm in below trend economic growth
• Reuters: Dutch government to resign over debt dispute
• The Street: Eurozone debt to GDP 87.2%, highest since Euro began
• AP: Spanish economy in recession as Q1, 2012 GDP fell .4%
• BW: Chinese manufacturing index of 49.1signals 6th month of contraction

81 Billionaires Pledge To Donate Fortunes

Image attribution: SevaCall, Public Domain

Since Warren Buffett and Bill Gates began a philanthropic trend around the turn of the decade, many more billionaires have also chosen to donate money from their massive fortunes. These donators include Mark Zuckerburg, Michael R. Bloomberg and Paul G. Allen and several others.

Complete article link: http://www.helium.com/items/2317297-the-generosity-of-warren-buffett

Research finds students benefit from paying for education, but not completely

Image attribution: Kevin Tang, CC BY-SA 2.0

Paying college education costs can encourage fiscal responsibility and appreciation for the value of education according to a study by Brigham Young University professors. However, doing so is also a dose of adult pragmatism that comes on the heels of waning benefits of education as other countries produce more talent to compete for economic pie.

Complete article link: http://www.helium.com/items/2317148-should-students-pay-for-their-education

Financial News 04/20/2012

• CNN Money: Crowd-funds, venture capital & micro-loans fund small-business
• Daily Finance: Commodities speculation also drives up food prices
• Reuters: Larger manufacturers more likely to in-source to U.S. per survey
• AP: BofA loan loss provisions lower than 2008 levels
• BI: Jobless claims closely correlated to S&P 500 performance
• MW: Peek Tab allows stealth employer monitoring of tablet computers
• Conference Board: Leading Economic Index (LEI) up .3% in March to 95.7
• Zero Hedge: Bond auctions are the last straw for confidence in weak currency
• NAR: March existing-home sales declined .12 million to 4.48 million   
• CNBC: Spain's 10-year bond yields, and delayed Italian budget stoke concern

Warren Buffett's Cancer Not a Threat to Berkshire Hathaway

Image attribution: Warren Buffett; Public Domain

Warren Buffett's stage 1 prostate cancer diagnosis is of minimal risk to Berkshire Hathway because of the early identification of the disease, and because men diagnosed with the disease have a 98 percent probability of living with it for 10 years per the American Cancer Association.

Complete article link: http://www.helium.com/items/2316732-warren-buffett-prostate-cancer

Financial News 04/19/2012

• Bloomberg: House of Representatives to vote on tax cut for small businesses
• DOL:  386,000 jobless claims were filed the week ending 04/14/202
• GMO: Bull market tied to investment managers' career risk
• Business Insider: Robert Shiller says housing prices don't have to go back up
• Business Week: Selling put and call options used to avoid capital gains tax
• AOL: Dollar stores beginning to sell discounted prescription medications
• CNN Money: BRIC nations likely to push for higher IMF quota before funding
• Reuters: IMF official warns of economic consequences if oil prices rise further
• CNBC: European banks seeking to lower capital ratios risk economic impact
• AP: French 5-year bond yields up slightly to 1.83% from 1.78%

Financial News 04/18/2012

• NYT: Derivatives regulation to curb firms with most economic impact
• Reuters: Congressional gridlock challenges President via oil prices
• AP: Economy a central issue in Presidential campaign
• Daily Finance: Generation Y believes luck, not work yields success
• CNBC: Corporate earnings facing growth challenge going forward
• Fed: Industrial production unchanged in March
• IMF: Global growth forecast raised to 3.5% in 2012
• Business Insider: Small conservative trend in central banks emerging
• Bloomberg: Non-performing Spanish bank loans up to 8.16%
• Europa: Euro-area construction down 7.1% in February
• Fox Business: China construction bank policy confirms R.E. indicators

Why Financial Optimism is Irrational

Image attribution: Kromkrathog; standard royalty free license

Optimism is a great thing and fuels powerful inspirations to achieve, accomplish and perform. However, it is undeniable optimism is also based on varying levels of hope or unproven belief about the future. That is a very unscientific and logically invalid reason to pursue certain courses of action or perhaps just an unwillingness or inability to face the truth.

According to Time Magazine, realists who saw problems in financial management were "culled as negative people", but they were right. Even so, everyday financial optimism makes itself evident in the lives of millions of people who sincerely believe they will succeed in life's pursuits, but sometimes they just end up being the basis for the  success of others, if not undue victims of ill gotten gains.

To illustrate the irrationality of financial optimism, how many times do individuals, corporate executives, managers and politicians secretly cross their fingers after making a decision, making a public announcement or encouraging employees? Given the motive of corporations, it makes some sense to lie to employees, but that does not make it rationally sound, just cleverly manipulative. The Onion makes this clear in a humorous way. So what good is realism in a workplace where blind optimism is so much better for productivity, revenue and earnings per share? 

Image attribution: Teerapun; standard royalty free license

For financial optimism to be at least somewhat rational it is often justified by principles such as hard work, education, competition, and "proven methods". After all, there is substantial evidence that people who do work hard achieve things in this world. Literally millions of people are living their dreams quite happily and many of them achieved those dreams with hard work. Moreover, according to Saurage Marketing Research the number of American families with net worth's over $1 million is expected to double by 2020. Take a closer a look though. 

• $1 million will be worth less in 2020 due to inflation
• Nine reds on a roulette wheel do not guarantee black the next spin
• 33-69% of small businesses fail per CNN Money and Dunn & Bradstreet
• Persons aged 35 have an 18% probability of death prior to age 65 
• Nearly 25% of Americans have no net worth per the Economic Policy Institute

The list goes on and for hard work to pay off, the conditions have to be right. For example, hard work in the Soviet Union would earn one not a penny more than the next person. Hard work also doesn't pay off when shoveling a mud slide during a rain storm. In other words, there has to be a functional economy for financial optimism to have a sound rational basis. Moreover, if companies aren't getting rich enough in the wealthiest country in the world, what exactly does it take for them to start hiring people? Perhaps they are the ones who need to reassess things the way they are.

Today the U.S. economy is functionally challenged. Recent Bureau of Labor Statistics data shows 14.5% of the U.S. workforce is barely making enough to live on, if that, given the cost of living within the U.S. The labor force participation rate has also reached near 30 year lows per the BLS.  It could be a lot worse, but it seems things are going to have to change if financial optimism is to have a substantially higher basis in economic reality. Let's hope that it does!

Data Shows Younger Generations Have Less Financial Success

It makes sense that older Americans have more wealth because they have lived longer and have had more time to accumulate wealth. However, according to the Credit Donkey infographic below, new generations may not reach the same level of wealth by the time they reach financial maturity because between 1984-2009 median net worth rose for individuals over 65, but declined for those under 35.

Courtesy of: CreditDonkey

Financial News 04/17/2012

• AOL: Consumers overspend on home, cars, electronics, banking & more
• USGSA: U.S. agency releases report on its own bad management
• NYT: Buffett rule taxing millionaires fails to pass vote in the Senate
• Investor Place: AT&Ts 5.7% dividend considered "heck of an income play"
• Bloomberg: Many states cut taxes in 2011; Alabama wins lowest tax status
• NY Fed: April manufacturing in NY State slowed substantially per index
• AP: President of Dartmouth college chosen to lead World Bank
• MarketWatch: UK inflation soars to 3.5% in March
• BBC: India cuts key interest rate 50 basis points to 8%
• EU Observer: Germany firm on limiting ECB's financial intervention
• Reuters: IMF lowers funding target to $400 bln, Japan "pledges" $60 bln

Why Economic Bubbles are Good for GDP

Economic bubbles are considered bad because they run up asset values without an underlying rise in production or real value. Bubbles have occurred several times in recent history, the tech bubble of the 1990s, and the housing bubble of the 2000s being two examples. Since bubbles are artificially inspired by market sentiment, and/or monetary policy they naturally burst to become more realistically priced. These bursts have tended to be dramatic and cause substantial financial stress to unprepared individuals and entities. 

Despite the negative effects of bubbles they are also economic opportunities. Bubbles attract investment capital from foreign countries, create wealth and fuel investments spawned by the increase in asset values. Without bubbles, financial and economic stasis would be more likely, and although that is more stable, it is can also have less near-term economic benefit. For example, consider an economy without asset inflation, and with GDP growth that remains steady at 1-2%, and that occasionally rises above inflation. Such an economy only keeps up with population growth and does necessarily increase or decrease in size.

A bubble economy however, may grow 3-5% for several years straight. Moreover, according to Department of Commerce GDP data, U.S. GDP grew an average of 3.82% each year between 1992-2000. That is year over year data as well meaning 3.82% compounded over the previous year's growth. Although in the 1990s the bubble was actually based in real technological innovation, a reasonable interest rate environment existed and inflation was actually kept in check by tightening the creation of U.S. currency per the CATO Institute. This bubble was conceivably caused by over-exuberant investors rather than loose monetary policy.

Even after the tech bubble had burst annual GDP did not decline below 1%, a relatively small price to pay for a bubble that created a lot of jobs, attracted a lot of foreign capital, and generated a lot of revenue. The housing bubble was not as healthy and was fueled by inaccurate derivatives valuations, loose lending policies, and a surge of speculative real estate purchases and construction.  Interest rates were also much lower in the mid-2000s than the 1990s. Yet this led to a four year average GDP growth of 2.95%, low unemployment and large corporate, foreign and individual investments. Without this bubble, economic growth may have only averaged 1-2%, and a recession still might have occurred afterward.

The growth created by asset bubbles serves as a stimulus for economic expansion, and expansion that may otherwise be impossible to attain with more practical, but stable economic policies. As with large companies, developed countries with large economies like the U.S. have to grow GDP in the hundreds of billions to expand at a rate that can support and substantiate significant capital investment into industrial research, business development, and government sponsored programs. The need for economic bubbles suggests it is quite possible the U.S. has reached its economic apex where continued economic expansion at a consistent rate higher than 1% is difficult, unsustainable and unfounded.

Financial News 04/16/2012

• CNBC: More than 20% of S&P 500 companies report earnings this week
• Census: March retail spending on par with March CPI increase of .8%
• AP: Buffett rule would only affect taxes of 210,000 or .001% of Americans 
• CNBC: Affordable retirement is a fading "golden age" in financial planning
• U.S. Treasury:  Feb. net foreign acquisition of U.S. LT Securities $107.7 bln
• CNN Money: Small businesses borrowing less in slow economic growth
• Option Queen: Nasdaq 100 bullish ascent more like a pole than a chart
• NAHB: Builder confidence in new single family homes down 3 pts
• Zero Hedge: Only 1 of the world's largest 25 banks is levered below 20x
• Reuters: 20% of Britons with more than $398K want to leave their country
• BBC: Spanish 10-yr bonds reach 6.1%; banks may require bailout
• NYT: Increase in European suicide rate linked to weak economies

Financial News 04/13/2012

• Bloomberg: Americans tired of being frugal go on spending binge
• Reuters: Consumer groups criticize CFPB for loosening credit card rule
• BLS: Consumer Price Index increased .3% in March
• BI: Economic resource depletion confirmed by Smithsonian & physicist
• Nasdaq: U of Michigan consumer sentiment index down to 75.7
• Consumer Reports: Consumer Sentiment Index down to 44.6
• Option Queen: Low rate corporate debt market limits investment options
• Investor Place: Market rally a result of speculation on monetary policy
• MW: Bull market reaching upper end of traditional cycle
• Reuters: Federal Reserve Bank will "act" only if "economy" weakens
• CNN Money: IMF Chief wants $500 billion for member interests
• CNBC: Economic pressure in Europe spurs anti-union sentiment
• BBC: Chinese Q1, 2012 GDP was 8.1% annualized, a 3 yr low

The 9 Trillion Dollar Tax Loophole

A large reason why corporations often pay less taxes than individuals is the vast financial benefits afforded to them by placing capital accounts and corporate headquarters overseas. In fact, according to the Tax Policy Center, corporate taxes accounted for just 9 percent of Federal tax year in a recent tax year, whereas individual taxes comprised 42 percent.

Currently federal government deficit spending is over $1 trillion dollars. This is partly due to lower tax receipts. If tax policy where to change in such a way that corporations could exchange zero percent tax for revenue and earnings that more than covers the cost of taxes, then that would theoretically be a win-win scenario.Whether or not the President's Framework For Business Tax Reform can do that is debatable.

The following infographic, courtesy of Coupons.org, illustrates where the corporate money goes, and why it goes there. 

 
Source: http://coupons.org

Financial News 04/12/2012

Federal Budget Deficits 2007-2014 

Source: Whitehouse, US-PDGov

Projected Budget Deficits 2009-2020

Congressional Budget Office Version

 Source: Congressional Budget Office, US-PDGov

• BLS:  380,000 jobless claims were filed the week ending 04/07/2012
• AP: Foreclosure prevention program riddled with delays and disagreements
• AOL: Fannie Mae & Freddie Mac own 200,000 foreclosed homes
• Reuters: 28% of U.S. work force supported by intellectual property
• Census: February U.S. trade deficit  declined  $5.2 billion to $46 billion
• NPD Group: Average cable cost in U.S. reached $86/month in 2011
• U.S. Treasury: March 2012 budget deficit $198.1 billion
• BLS: March PPI for net trade services up 1.2%, Core PPI up .3%
• BW: Women with Alzheimer's granted $34 million on health insurance suit
• The Street: Romney's Swiss accounts stoke claims of fiscal anti-patriotism
• Bloomberg: Speculation of Asian monetary easing entertains rally
• BBC: Greek city of Volos is using a barter exchange currency called TEM

Legality of Vehicle License Fees, Property Tax and Registration Costs Questioned

Image attribution: Flickr/WikiCommons, CC BY-S.A. 2.0

The law is the law, and when the law has loopholes, contradictions and constitutional disconnects, then that's of interest to human beings aka “persons”. When it comes to paying exorbitant property taxes, registration fees and licensing costs it allegedly helps fund road work that benefits the individuals who use those roads, but what if it comes at the expense of a civil right? That is the argument at the root of claims that automotive costs are themselves legal infractions.

Denial of right to travel

The right to travel is a legal right granted by U.S. case law that allows individuals to use highways without restriction by federal, state or county government. This means, that requiring vehicle licensing and registration is a violation of the right to travel because it makes travel a privilege and not a right. Several legal cases confirm this according to Jack McLamb of the Aid and Abet newsletter.

Misleading enforcement of registration

According to an article by Jeffrey Schwartz in the Denver Post, registration of motor vehicles is voluntary, based on the fact his neighbor continuously renewed such tags without formal registration. Moreover, since the owner of the vehicles was able to do this it is implicit no formal registration deadline is mandatory. This only serves to reinforce the right to travel and a logical inconsistency, or at best disagreement within the legality of vehicle registration. 

Conflicting penalization

Not registering a vehicle can lead to traffic violations, however when the cost of those tickets is less than the combined registration costs and property tax on an automobile, it's the more affordable solution according to ABC News 7. Moreover, in the State of Colorado, there is no state law requiring vehicle registration as a pre-condition for paying a traffic violation.

Impositions of licensure

According to the Archuleta Country Guard licenses are a function of the privilege to drive and are therefore not required. Furthermore, this right is acknowledged by legislators, law enforcement officials and justice officials per the ACG. Since licenses are therefore not a requirement to drive, they are not a necessity to drive and fees associated with the acquisition and maintenance of such  can be avoided. It is claimed this can be done by asserting sovereign right to operate a vehicle.

Having said all this, chances are traffic infraction tickets would be forthcoming if any of the above methods were to be implemented. However, if those tickets are signed under duress, and without having being read Miranda rights upon being detained and questioned, then not only is the evidence inadmissible or unacceptable in a court, it is also fraudulent per JuliusBragg of the Daily Paul Forum.

Disclaimer: The contents of this article do not constitute legal advice, nor is it guaranteed to be accurate as I am not licensed to practice law. Any information in this article is for informational purposes only, and is not intended to promote or condone legal infractions of any kind. Those seeking to use this information to avoid paying costs associated with motor vehicles may wish to first consult an attorney.

Financial News 04/11/2012

• Reuters: Alcoa leaves 2012 global aluminum demand growth forecast at 7%
• AP: Inaccurate background checks leading employers to forgo thousands
• BLS: Import prices for March 2012 increased 1.3%
• BI/WSJ: Ideal salary for happiness is $75,000 per year
• BusinessWeek: 1/3 of schools with the best ROIs are engineering schools
• CNBC: MBA's mortgage application index fell 2.4% despite low rates
• NYT: Lenders issuing 12.3% more higher risk credit cards yr over yr
• Reuters: Italy's one year debt costs rose to 2.84% from 1.405% in auction 
• MarketWatch: Bundesbank to reverse inflationary effects of monetary policy
• FP: Thai stocks in the red after 3 large quakes triggered tsunami warnings

Financial News 04/10/2012

• Reuters: Central banks running out of functional monetary solutions
• Bloomberg: Buffett rule likely to be stifled by Senate Republicans
• Alcoa: Q1, 2012 earnings season kicks off today with Alcoa earnings report
• CNN Money: Robert Shiller says past high stock returns were an anomaly
• Business Insider: GDP growth to retrench on slow wage & debt growth 
• AP: Jobs challenged by oil, slow GDP growth, weak incomes & dropouts
• NFIB: Small business sentiment index declined 2 points to 92.5 in March
• Las Vegas Sun: Fitch puts Las Vegas credit rating on negative outlook
• CNBC: Euro-banks face wider LIBOR spread & Spanish debt costs
• MW: Non-Euro investors avoiding Europe on economy, and icy credit 
• CBS: China's March import growth down 2.4% to 5.3% on $5.35 bln surplus

Fianancial News 04/09/2012

• Reuters: Last 3 yrs of state and municipal layoffs worst since 1955
• Business Week: South Dakota is seeking 10,000 accountants
• NYT: Federal funding for dislocated employee training is falling
• Business Insider: Goldman Sachs reverses long position on Russell 2000
• Bloomberg: Fed to sell up to $1.5 billion in TIPS maturing 2012-2015
• IRS: Individual tax filing deadline for 2012 is April 17, 2012
• InvestorPlace: 16 companies poised to take advantage of Chinese growth
• Kiplinger: On average state and local pensions are 77% funded 
• AP: Chinese year over year inflation increased by 3.6% in March
• WP: India wants to retroactively tax asset transfers dating back to 1962

IRS Audit Preparation Tips

Image attribution: US Internal Revenue Service, US-PDGov

In 2010, 1,581,393 IRS audits were performed by the U.S. Internal Revenue Service according to Syracuse University federal tracking data. Of these audits 78.3 percent were by correspondence and 21.7 percent involved in person contact with an IRS agent. Depending on whether or not the audit takes place via correspondence or in person influences how a taxpayer prepares for the IRS audit. In either case, there are several pro active ways to prepare for an IRS audit that can potentially save time, money and reduce tax related stress.

Awareness of audit probability

Being aware of what triggers an audit, and the chance of an audit occurring are a good way to ready oneself for an audit. For example, in a March, 2011 article in Forbes magazine, Tax Lawyer Robert W. Wood states of total 2010 IRS audits 30 percent claimed the Earned Income Credit meaning at least 30 percent of audits occur for the lower end of the income scale. Knowing this, taxpayers might choose to exercise more caution when claiming this particular tax credit. Furthermore, reviewing IRS publications such as the Fiscal Year 2012 Annual Audit Plan provides insight into the direction and focus of IRS audits.

Familiarize with audit process

Knowing how IRS audits work can help expedite the process and avoid unforeseen consequences. Lesson four of The IRS audit video series guide is helpful in audit preparation and provides information about what is required of taxpayers during an audit. For example, during an audit, a taxpayer may receive either an IRS Form 4564 or Form 886-A detailing what specific documents the IRS requires from the tax payer. Additional videos in this series provide a comprehensive overview of the audit process as well as audit tips. IRS Publication 556 provides further information about taxpayer privileges such as mediation during an audit dispute.

Understand the IRS Audit Information Management System

The IRS keeps track of its audit activities via what is identified as the Audit Information Management System (AIMS). This system records the total number of audits, and IRS agent hours spent on audits in addition to audit results according to Syracuse University's Transactional Records Access Clearinghouse (TRAC). Understanding how the AIMS  system works and the audit process can be helpful in gaining insight about how to best handle an audit.

Review IRS audit statistics

The IRS publishes its audit information and this can be directly reviewed by taxpayers to get a sense of what the IRS examines in an audit and how they do it. To illustrate, the 2010 IRS Data Book claims that of the total 1,735,083 individual tax filing 'examinations' that took place in 2010, 92 percent of international tax filings required changes. This indicates international tax filers have a high probability of having their tax filing changed by the IRS if they are audited pointing to a higher level of scrutiny, error or both with these types of audit.

Know taxpayer audit rights

If the IRS selects a specific tax filer for audit, it is important to be aware of the rights granted before proceeding with the audit. For example, according to IRS audit information, taxpayers may record an audit interview or relocate the location of an audit upon prior notice and are also afforded the right to representation. Taxpayers may also appeal audits if they disagree with the changes requested by the IRS.

How candlestick analysis of stock prices works

Anatomy of a stock chart candlestick

Image attribution: Ticmarc, Public Domain

Candlestick charting is a kind of financial analysis used in what is known as technical analysis. Technical analysis of financial securities interprets charted or graphed price movements, patterns and trends of a financial product to help improve the results of financial activities such as stock trading. In candlestick analysis the candlestick chart or graph is the tool for  analysis, but the analysis of that chart is what provides financial utility. Moreover, as a form of technical analysis, candlestick charting reflects financial influences such as market psychology via product price patterns instead of the evaluating the product itself.

In the book 'Trading Applications of Japanese Candlestick Charting' by Gary Wagner and Bradley Matheny, the origins of candlestick charting are said to date back to the seventeenth century creation of an honorary samurai and futures trader named Sokyu Homma. According to Wagner and Matheny, Homma's candlestick patterns indicated commodity price direction when a series of three candlesticks in either an upward or downward pattern occur as 'gaps' in the opposite direction.

Patterns like those developed by Sokyu Homma are determined using candlestick charting through evaluation of key variables in a financial product's price including its opening price, highest price, lowest price and closing price. These price movements are represented as a pattern or series of chronological units such as a single day, with each unit graphed as a single rectangle or line known as a candlestick.

The appearance of candlesticks and wicks provide a lot of information about a financial product's price patterns for the period of time it is measuring. Essential aspects of the candlesticks are their color, length and the length of the 'wicks' or lines at the top and bottom of the candlestick's body. These candlesticks can vary in length and position on a candlestick chart depending on how the price of a particular price such as company price per share moves in a given time period. The top and bottom of the candlestick's body symbolize the opening and closing prices, and the top and bottom of the wicks represent the highest and lowest values reached during a trading period.

When a candlestick is black or red, a product's price has closed lower than its price when it opened at the beginning of trading. If the product's price closes higher than the opening price, the body of the candle is green or white. Long candlesticks and wicks represent a larger range of price movement than shorter candlesticks where the bottom wicks indicate the lowest price of the trading period and the top wick show the highest price. Sometimes no candlestick body is formed at all and this is called a 'doji'. Also per Wagner and Bradley, a Doji represents a trading period in which the opening price and closing price were very similar.

Once the appearance and location of a candlestick is understood, it is then interpreted for price evaluation and forecasting purposes. This is done by analyzing the form of the candles and their relationship to other candlesticks on the chart. For example, a series of black candlesticks each positioned lower than the next indicates a negative price trend such as a 'bearish hook reversal' and may mean confidence in a stock or commodity has been lost. Furthermore, if the majority of candlesticks on a chart are black with a visible downward trend, this can indicate a long term trend such as a market correction. A market correction is when a price moves lower to correct overly optimistic speculation regarding a specific product's value.

There are several candlestick chart patterns which a chartist is ideally familiar with. These patterns also have names such as 'spinning top', and 'marubozu' which help the chartist quickly interpret their meaning based on previous interpretations of the candlestick pattern. To illustrate, according to Minyanville Media Inc, an Emmy Award Winning business information provider, a 'spinning top' can serve as an indicator a price reversal is about to take place. Candlestick charting analysis, like most financial analysis in general is not definitive proof of where a financial product's price is heading. However, candlestick charts can serve as indicators of market indecisiveness, conviction and momentum; all of which in and of themselves influence the price of financial products.

Why You Should Be Very Skeptical of Some Testimonials

This is all the evidence you need...

...because the above "testimony" is  a video sample from ScreamingFinger who creates testimonies for $5 a pop. Here's another one.....it's very impressive!

 

 Fantastic acting!

 

Financial News 04/06/2012

• CNBC: Credit rating agency Egan-Jones downgrades U.S. to AA
• NYT: Americans are cutting back on medical supplies and checkups
• BLS: March unemployment rate 8.2%, 120K non-farm jobs added
• Reuters: S&P 500 Index just had its worst week in 2012
• Business Insider: Citigroup Economic Surprise Index at 6 month low
• MarketWatch:36% of analysts, traders and investors expect Fed QE3
• Bloomberg: Euro currency valuation near 7 month lows on Spanish debt
• CNN Money: European recession a bigger concern than debt crisis
• Caspionet: Russian economy could slow GDP growth to 2-3%

Financial News 04/05/2012

• Kiplinger: Transportation spending accounts are tax deductible
• Reuters: Treasury Secretary says U.S. housing finance reform is lacking
• AP: USA Today employees furloughed for a week to save money
• NPR: City of Harrisburg driven into heavy debt by incinerator expenses
• DOL: 357,000 jobless claims were filed the week ending 03/31/2012
• CNN Money: Charlotte & Raleigh, NC among fastest growing municipalities
• WP: Markets down on central bank decision, & continuing Euro debt crisis
• Reuters: Italy's legal system to hamper technocratic economic reforms
• Bloomberg: German industrial production and UK manufacturing down 1%
• ECB: Euroarea GDP -.3% in Q4, '11, interest rate 1%, inflation above 2%
• BBC: Greek retiree leaves pensionless corpse in front of Parliament

How to Get a High-Limit Credit Card

Image attribution: Peter Kratochvil, Public Domain

A higher credit limit is possible with bad credit using a number of relatively effective techniques that lower risk to lenders or at least give the quantitative impression of lower risk. Some methods involve building credit score, others involve the mechanics of applying for credit cards. Depending on the credit card applicant's timeline and existing situation, the right methods to use to get approved for high-limit credit cards vary. Some of the following methods can be used for applicants with no credit cards, whereas others can be used by people with or without credit cards.

Know the lender's policy

Creditors establish credit ratings using several factors. The credit report is a major influence, but ultimately the credit limit is set by the lender and not the credit rating agency. Knowing the lender's policy on credit card limit increases helps borrowers know what they need to do to increase their credit limit. Such being the case, asking the appropriate lender representative about their credit limit policy can offer helpful clues to getting approved for high-limit credit cards with a bad credit rating.

Lower credit utilization ratio

Credit utilization is a ratio used by creditors to determine how much debt payment capacity a borrower has, and the level of risk associated with lending to that client according to the Fair Isaac Corporation. A good way to help improve the chances of getting approved for a high limit credit card is to lower this ratio before applying. For example, if an applicant already has credit cards, pay the balances off to demonstrate ability to control debt and to lower the credit utilization ratio.

Select applications carefully

Some credit cards are specifically designed for people with bad credit. These cards can be found using a credit card screener. Some creditors may be more likely to offer higher credit limits than others. Larger banks with aggressive lending programs may also be a good place to start looking. According to Smart Credit Choices, a credit card comparison website,  applying for multiple credit cards increases the chance of obtaining a higher limit credit card. Moreover, also per the Fair Isaac Corporation, multiple credit inquiries generally have a low impact on credit score.

Rollover credit card balances

Another way to get approved for a high-limit credit card with bad credit is to consolidate other loans. Lenders that want credit card business through consolidations may have to raise the credit limit beyond what would normally be approved to accommodate the credit card consolidation. However, if the consolidation is a response to an offer, this may yield promotional interest rates and may also be a good sign as the creditor may have actively pre-screened borrowers for consolidation loans. Investopedia, a financial information provider, recommends having the credit transfer fee waived in the event of credit consolidation.

Prepaid and secured credit cards

If paying up front isn't a problem, there's a better chance of obtaining a higher credit limit on a prepaid or secured credit card. Moreover, even with a bad credit score, getting approved for a prepaid credit card with a high limit may prove to be relatively easy provided the card is paid for ahead as condition for approval. Additionally, having a high limit prepaid credit card may indicate to other creditors that a borrower is capable of managing a higher credit limit potentially making it easier to get approved fro non-prepaid credit cards with higher limits.

Utilize credit building methods

Lastly, building credit score using methods endorsed by the Federal Reserve Board or the Federal Trade Commission can help credit card applicants receive a higher credit limit in the long run. These methods include reviewing credit reports for inaccuracy, correcting any mistakes on credit reports, paying off outstanding debts and establishing a strong bill payment history. Since credit score is a factor in the credit limit assessment, having a higher credit score naturally improves the probability of a higher limit request will be granted.

Financial News 04/04/2012

• Bloomberg: Home prices could drop 10% on 1.25 mln foreclosure sales
• Fox Business: IRS to hire 4,500 new workers to enforce Obamacare
• AP: Less than 25% of 1,350 U.S. newspapers currently use pay walls
• BI: Ex-oil tycoon suspects Texas sweet light oil could reach $148/brl 
• ADP: Non-farm jobs slip by 7k to 209,000, 150k less than DOL total jobless
• Marc Faber: Younger generations should "lower their expectations"
• FRB: Fed minutes indicate reluctance to issue new quantitative easing
• Census: New manufacturing orders slowed .2% in February, but up 1.3%
• UK Guardian: Spanish bond auction fizzled today, and bond yields rose

The best and worst weekdays to buy and sell stocks

Image attribution: Stuart Miles, standard royalty free license

In historical research it has been demonstrated that some days of the week have indeed been better than others for buying and selling shares. However, since finance and economics is generally not a pure science, conditions for verifying such a pattern are limited to scenarios that are not necessarily perpetually accurate or realistic representations of broader market conditions.

Days of the week to buy and sell shares change with the prevailing market and share related conditions, but don't necessarily fail to demonstrate some indication as to which day of the week is better to buy or sell shares. The best day of the week to buy shares and the worst day of the week to sell shares conforms more to the logic of the time and the place than any pre-established long-term pattern.

The 'Day of the week effect'

Trends and patterns present themselves in the stock market all the time; this much is documented. For example, in the Journal of Economics and Finance, Volume 25, number 2, 2001, it was empirically demonstrated that the days of the week do not have the same volatility in price movement and also do not provide the same levels of daily returns as evident in statistical research on the S&P 500 Stock Index between 1973-1997.

According to this particular study, the days of the week with the best returns was Wednesday, and the day of lowest return was Monday with Fridays having the highest volatility. Such being the case, it would appear as though some time during Monday would be the best day to buy shares, and at some point on Wednesdays would be the best day to sell shares.  

Pattern changes over time

The findings in the aforementioned study may be convincing, but they aren't absolutely conclusive. This is because the time periods in which the measurements were made are finite within a longer market timeline. For example, in the book 'Stock Market Rules' it is claimed the market tended to drop on Mondays and rise on Fridays for a period of 37 years between 1953 and 1989. Also according to the book, this Monday decline pattern changed in the 1990s essentially providing a counter claim to any definitive long-term day of the week effect.

Trends are different across markets

A problem with quasi-scientific research is variance within the shares studies themselves. In other words, because the conditions are different across studies it is difficult to prove any universal accuracy of finding no matter how statistically valid any single study is. To demonstrate this principle, it is helpful to look at another 'day of the week effect' research study by Yelis Yalcin of the Gazi University Department of Econometrics and Eray M. Yucil of the Turkish Central Bank. The findings from this study show the best days of the week to buy and sell shares varies across multiple emerging markets indicating no one good day to buy shares or bad day to sell shares across multiple markets.

Individual financial products vary

Many studies make use of averages to verify hypotheses about particular events or subjects. In the case of days of the week for buying and selling shares this tends to exclude the individual price movements of shares. Such being the case for some shares Monday may be the best day to buy shares and the worst day to sell shares, but at a different time, or in the same market with different shares this may not be the case. This is because the underlying financial conditions of a company or financial instrument which the shares represent can vary and influence price independently of market movement. This tendency is measured by a statistic called the Beta coefficient.  

In summary, if investors or traders can act on shorter term patterns in which recognizable share price movements do occur, then there may indeed be a best day of the week to buy and a worse day of the week to sell shares in that context. The bottom line however, is that any pattern, trend or market condition can change with a multiplicity of market, economic and share specific variables that are not easily nor accurately accounted for or measured using empirical research techniques.

Financial News 04/03/2012

• AP: President Obama calls GOP budget "thinly veiled social Darwinism"
• NYT: "Economic recovery" is demographically disproportionate 
• BI: 12 rags to riches cases including Lloyd Blankfein of Goldman Sachs
• Investor Place: High yield in Q2, 2012 less likely per chief strategist
• Smart Money: Financial advisers reinforce bad investing habits per NBER
• Bloomberg: Real estate prices in Manhattan down .9% in March
• BBC: Spain's jobless 23.6% in Feb., 2012 debt to GDP 79.8% per CNBC
• Times of India: India's March HSBC PMI declined 1.9 points to 54.7
• Reuters UK: Japanese business sentiment down to -4 in March

Financial News 04/02/2012

• Bloomberg: 71% of private owned treasuries to cost U.S.A. more by 2017
• FDIC: Swaps push-out provision of Dodd-Frank Act effective 07/16/2013
• The Atlantic: "Go-Nowhere Generation" moving to lower cost of living
• Fortune: Middle class angered by unemployment & stagnant pay
• WP: $85 bln of student loans delinquent; $36 bln owed by 60+ yr olds
• BI: This week's economic data to confirm or disconfirm market deceleration
• AP: Visa network error prohibited credit card use across the US 04/01/2012
• Yorkshire post: Truckers threaten to bring UK to standstill via strike
• Reuters: European manufacturing contracting, unemployment up per BBC

How to Save Money with Bartender Therapists and Cheap Drinks

This may sound like an oxymoron, but there's a hidden financial contortion in the bar equation. Bars drinks are almost always expensive, but not always, and sometimes bartenders serve a dual purpose that can end up saving literally $100s of dollars. Just ask any bartender if they've ever had a client that wanted to talk to them about their lives.

For starters, at a minimum bartenders are paid to serve their clients and do their best to make them feel good. For special clients they may even buy you a drink.  According to Everyday Health bartenders are one of seven  “everyday therapists” that can help stave off depression. For $5-$10 a drink that's the cost of a co-pay at a cognitive therapist's office.

Forbes magazine also has something to say about bartender therapists. Specifically, the bartenders that are good at therapy aren't so good at mixology. Truth be told, mixology is the easy, or at least the fun part. Approximately 99 percent of the time either the client or a bar book will have a drink recipe, out of this world shooters being the exception. However, that reasoning precludes the point that the technical experts aren't so inclined to be the people experts.

In reality how much therapy a bartender gives depends on the bartender, how new they are to the business, their training, how busy they are, the clientele and how well you tip. Moreover, when finding the ideal bartender the most obvious places aren't necessarily the best. Small out of the way service bars during off hours are a good bet. These bartenders tend to have less diverse mixology requests, and have more time to please their clients. Quiet bars also afford greater depth of conversation.

Some bars actually serve cheaper drinks too. According to the good folks at Chowhound,  they're not always easy to find, and aren't likely to have chandeliers. When visiting obscure, culturally homogenous rural bars consider avoiding the bottom shelf (or back corner) tequila especially if it's from a dusty bottle.  Rail drinks, house wines and domestic draft are usually the more affordable choices. For high alcohol content, long-island ice teas (a combination of five ½ oz servings of white liquors) with sour-mix and coke are a good choice if cocktails have a flat rate price.