M&A Bankers Suffer 35% Drop in Fees as Deals Dry Up From Record  

As reported in Bloomberg

 

March 31 (Bloomberg) — Mergers and acquisitions bankers suffered a 35 percent drop in fees during the first quarter, just weeks after cashing bonuses from a record year.

Advisory fees fell to about $8.7 billion from $13.4 billion in the first three months of 2007, data compiled by analysts at New York-based Freeman & Co. show. Executives at Lehman Brothers Holdings Inc. and Bank of America Corp. predicted in December that takeovers would decline about 20 percent this year.

“As recently as three months ago, we thought we had seen the worst and it was going to begin to get slowly better,” said Eduardo Mestre, 59, the former head of Citigroup Inc.’s investment banking unit and now vice chairman of New York-based advisory firm Evercore Partners Inc. “It only got worse.”

The collapse of the U.S. sub prime mortgage market threatens to stifle economic growth and further curb corporate purchases. New York-based Goldman Sachs Group Inc., the world’s leading M&A adviser, reported a 47 percent decline in revenue from providing takeover advice in the first quarter from the fourth.

Our Perspective 

Is bigger always better?

Companies are looking to expand their footprint, increase their brand awareness.

Once a merger or acquistion is proposed, all the due dilligence is done upfront. Attorneys and accounts pour over documents and make recommendations as to the feasibility of the proposal.

Once all the i’s have been dotted and the t’s are crossed, signatures are placed on the contract. The next step is that all these papers must be sent to the state(s) to be registered.

The wheels come off the cart 

Once the contracts have been signed, all the focus goes into reviewing the existing operations and implementing efficiencies. What most companies fail to realize is that the states have a very difficult time recording these transactions.

 50% error rate 

The Department of Labor statistics show that 50% of the companies who have been involved with a merger or an acquisition have been assigned the wrong rates and as a result are overpaying payroll taxes.

How can this be? Isn’t this 2008! 

Again, let me make this clear. These errors have nothing to do with all the due diligence that was done prior to the acquisition or merger. Companies fail to take the next step and determine if these transactions were properly recorded.

Our clients are taking the next step.

We have a 90% success rate.

Our clients’ rates are corrected. 

They are getting refunds. 

Has your company been involved in a merger or acquisition within the last 3 years?

What rates were assigned to your company?

These errors can effect as many as 5 different tax rates.

Are you overpaying payroll taxes? 

Our services are done on a contingency fee.

There are no upfront costs.

Let us know your thoughts?

Do you have a question?

You may email george@hbsadvantage.com

Hutchinson Business Solutions ……Your CFO on the Go.  

Creating Opportunities Today,…Defining Savings for Tomorrow.

Visit http://www.hutchinsonbusinesssolutions.com/ to learn more about saving opportunities available for your company. 

Spread the good news….. share this information with a friend. 

Advertisements

March 28 (Bloomberg) — The dollar fell against the euro, headed for its biggest weekly decline since January 2006, as traders increased bets that the Federal Reserve will cut interest rates again to avert a recession.

 Is this too little to late? 

Ask Gov. Corzine, he said the R word this morning on Morning Joe. He was asked by Joe Scarborough, “ Do you think we are in a recession.” His answer…”Yes.”

He went on to say that many of the things that the government is now doing is correct but they were too slow to pull the trigger. The Government should have taken these steps months ago.

Now what do we do? 

Ask John McCain, He doesn’t think the government should do anything.

Both Obama and Clinton are saying they will take steps to address these issues but that could be another year from now.

In the meantime, the economy is on a roller coaster.

The Feds keep cutting rates but the banks are not lending money. The housing market continues to suffer for people cannot get a mortgage.

Those stuck with high mortgage rates, try to take the high road and continue to pay high monthly payments with no relief in site. Some are even opting to walk away from their investment. That only will cause more problems down the road.

 What about the small business owner? 

Sales are down and costs continue to increase.

We are working with many small and medium size clients, reviewing costs, creating opportunities that will help them weather the current crisis.

Many hours have been vested to help build their American Dream.

This is not the time to be complacent!

There may not be a silver bullet cure-all but there are steps that can be taken to help reduce cost.

This is the time to be pro-active. 

Let us know your thoughts?

You may email george@hbsadvantage.com

 Hutchinson Business Solutions ……Your CFO on the Go. 

Creating Opportunities Today,…Defining Savings for Tomorrow.

Visit http://www.hutchinsonbusinesssolutions.com/ to learn more about saving opportunities available for your company.

Spread the good news….. share this information with a friend.

  

        Many corporations view sales tax as just another cost of doing business. We would like to take a moment to review why it is important that companies review their procedure for paying sales tax.

 Here are a few questions to think about:

·        Do you know how much sales / use tax your company pays every year?

·        Does your company have a sales tax procedure in place?

·        Are these procedures being followed?

·        How much training has been given to the people responsible for accruing use tax?

·        Has there been frequent turnover in the position that handles this responsibility? 

Recently we spoke to a potential client who stated that over the last 3 years they had invested from  $250m upto $280m in capital improvements in their facilities. During this process either the owner or a subcontractor is purchasing material for specific improvements. Taxes may be paid for an item at the time of purchase however the ultimate test for tax is how is the item being used.  

 We have one client who was purchasing granite counter tops. The subcontractor was paying the tax on the granite tops and passing the tax onto our client thru a stipulated contract. Our audit defined that the granite counter tops were being installed into each unit thus becoming real property, which would make the purchase tax exempt.

These factors, and many others, contribute to why so many companies are paying more use and sales tax than they should.   

Part of an audit procedure should be looking at the entire operation within your company and how it is broken down into independent operating divisions. Each operation should be treated as a separate entity and determine the tax implications for each of their purchases.

It is also important to look at both sides of the equation. The state will come in and do an exposure audit. Is your company not paying tax on purchases that should be taxable. 

We not only look at that aspect but also determine if you are paying taxes on purchases that are actually tax exempt.  

Tax laws are complicated. Our staff is comprised of former state auditors who are familiar with the the tax codes in multiple sates.

In these difficult budget times, most states are running at a deficit and are becoming more aggressive at bringing in additional revenue. Don’t expect them to tell you if your company has overpaid its use and sales tax!

The onus is on you!

Do you feel that you may be overpaying Sales Tax?

For your own protection, you need someone who has your company’s best interest at heart.

Our clients are receiving significant refunds for overpayment of sales tax.

Let us know your thoughts?

You may email george@hbsadvantage.com

Hutchinson Business Solutions ……Your CFO on the Go.  

Creating Opportunities Today,…Defining Savings for Tomorrow.

Visit http://www.hutchinsonbusinesssolutions.com/ to learn more about saving opportunities available for your company.

Spread the good news….. share this information with a friend.  

As reported on Bloomberg.com March 25 (Bloomberg) — U.S. consumer confidence fell more than forecast in March as Americans’ outlook for the economy dropped to the lowest level since Richard Nixon was president.

The Conference Board’s confidence index fell to 64.5, a five-year low, from a revised 76.4 in February, the New York- based research group said today. A report from S&P/Case-Shiller showed home prices in January fell by the most on record.

Declining stock and property values have unnerved Americans, heightening concern spending will falter. A drop in spending, which accounts for more than two-thirds of the economy, would deepen what economists say is almost certainly the second recession of the decade. The Dow Jones Industrial Average remained lower after the report, while Treasury notes held gains.

“Consumers are going to pull back pretty sharply,” said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. “The labor market is starting to deteriorate and income growth is barely keeping pace with inflation. These are all pretty negative omens for what’s to come.”

The Conference Board’s gauge of expectations for the next six months slumped to 47.9, the lowest since December 1973, when the Watergate scandal rocked the Nixon administration and an embargo by a group of Arab oil exporters was in effect, the report showed.

Our Perspective:

The whispering has stopped. People are now communicating their fears about the economy. I stopped at a friends shop the other day and one client told him that this is the worst they have seen the economy in 25 years.

Everyone has been holding their breath with an eye toward summer. We keep pushing the recovery out in hopes that it will work itself out. We all like instant gratification, however we may find this will not be the case.

If you are a business owner, what steps are you taking?

Are you being proactive, looking at your cost?

There is no silver bullet. Baby steps must be taken to review specific cost that will provide savings and increase efficiencies.

Complacency may not be prudent in this case.

Let us know your thoughts?

You may email george@hbsadvantage.com

Hutchinson Business Solutions ……Your CFO on the Go. 

Creating Opportunities Today,…Defining Savings for Tomorrow.

Visit http://www.hutchinsonbusinesssolutions.com/ to learn more about saving opportunities available for your company.

Spread the good news….. share this information with a friend.

Commodities Drop, Rally in Dollar, Stocks Vindicate Bernanke

As reported in Bloomberg.com 

By Pham-Duy Nguyen

March 21 (Bloomberg) — The biggest commodity collapse in at least five decades may signal Federal Reserve Chairman Ben S. Bernanke has revived confidence in U.S. financial firms.

The Standard & Poor’s 500 Index posted its first weekly gain in a month, and the dollar leapt from its lowest level since 1973 after the Fed stepped in March 16 to rescue Bear Stearns Cos., the fifth-largest U.S. securities firm, and expanded its role as lender of last resort to embrace the biggest dealers in Treasury notes.

Investors who had poured money into gold, oil and corn, seeking a hedge against inflation and a weak dollar, sold commodities to raise cash or buy stocks. The Reuters/Jefferies CRB Index of 19 commodities tumbled 8.3 percent this week, the most since at least 1956, after touching a record on Feb. 29.

“Bernanke took care of the commodity bubble,” said Ron Goodis, the retail trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. “Commodities are coming back to earth. The stock market looks OK, and Bernanke is starting to look a little better.”

Concern that the central bank would let inflation get out of control eased after the Fed cut its key interest rate by 0.75 percentage point on March 18, less than the reduction of at least 1 point that investors had expected.

“Clearly they’ve gotten some stability,” said Keith Hembre, a former Fed researcher and chief economist at FAF Advisors Inc. in Minneapolis, which oversees more than $107 billion in assets. “You have to stand back and say, for the time being, it looks to be a pretty successful combination of moves that have worked.”

 Our perspective

This seems like good news. We have all been looking for some sort of stability. However the market is so fickle and the current volatility urges us to proceed with caution.

Let’s see how things shake out over the next couple of weeks.

Will energy prices stabilize and start to drop? Natural gas prices are still inflated, reserves are still at an all time high. Temperatures continue to be moderate.

Let us know your thoughts. You can reach us @

george@hbsadvantage.com

Should you want to learn more about us, take a minute to look at our website.

www.hutchinsonbusinesssolutions.com

Your CFO on the Go.

Creating Opportunities Today…….Defining Savings for Tomorrow

U.S. Initial Jobless Claims Rose 22,000 to 378,000  

As reported in Bloomberg .com

March 20 (Bloomberg) — The number of Americans filing first-time claims for unemployment insurance rose last week and the total number on benefit rolls reached the highest since August 2004, signs that firings are increasing.

Initial claims for benefits increased 22,000 to 378,000 in the week ended March 15, more than economists forecast and the highest since the week of Jan. 26, from 356,000 the prior week, the Labor Department said in Washington. The number of people staying on benefits rose to 2.865 million from 2.833 million.

U.S. companies are cutting staff as the biggest housing slump in a quarter century, tighter credit and mounting financial losses push the economy toward a recession. The Federal Reserve, noting labor markets had “softened” as it cut interest rates earlier this week, said it would act “as needed” to promote growth.

“This is pretty much what it looks like heading into recession,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York, said in an interview with Bloomberg Television. “It’s a bad number for the Fed. This is something that might keep them cutting rates.”

Treasuries were little changed after the report, with the benchmark 10-year note yielding 3.33 percent.

Weekly claims were forecast to rise to 360,000 from 353,000 initially reported in the prior week, according to the median projection of 39 economists in a Bloomberg News survey. Estimates ranged from 345,000 to 380,000.

From a company’s perspective

Many companies look to firing or laying off employees to address a downfall in the economy. This may address an immediate need but many fail to realize that this decision lives with them for 4 years.

First, if an employee collects, the payments will be paid out of the State mandated company’s account. The state unemployment programs are set up to mirror that each company has their own checking account.

The state assigns a rate that tells you how much will be put into the account and then notifies you how much has been paid out in claims.

The amount paid out directly affects the balance or reserves held in the account and have a direct relationship in determining what your rate will be over the next 4 years. The state makes a calculation based on the dollar amount of claims paid out, the reserves needed to support future claims as they relate to the taxable wage base.

 Confused yet?

That is the way the states want you to view it.

Should you have any questions about the unemployment or claim process, feel free to contact us. We deal with these issues on a daily basis.

george@hbsadvantage.com

We find many clients have been assigned the wrong rate and our overpaying unemployment taxes.

To learn more visit our website.

www.hbsadvantage.com

We look forward to discussing this with you.

Another Cut

March 18, 2008

The Fed cut its federal funds rate another ¾ of a point today  to 2.25%, 

This is an overnight bank-lending rate.  

It is the sixth cut in the past six months and comes at a time when the Fed is trying to keep the economy from slipping into recession –  

Although many think it’s already entered one. 

What’s your thoughts on this? 

The Fed also took the unprecedented step, on Sunday, allowing brokerage firms to borrow money directly from the Fed, a right previously reserved for commercial banks.

In addition, the central bank lowered its discount rate, which is what it charges banks to borrow money, by a quarter of a point. 

As a result, the dollar rose the most it has in almost four years against the yen and gained against the euro.

All this, in an effort to boost the economy and bring confidence back to the financial markets.

Is this being reactionary or is the Fed trying to be proactive?

 Is this too little too late? 

What are your friends and associates saying?

Personally we are hearing a lot of uncertainty.

Most people are hoping it is all just a dream and that it won’t affect them.

However, the signs are real and it is already affecting them.

This is an election year.

Listen to what the candidates are saying and see which one is speaking to you.

Who offers the best plan to address the issues we are dealing with?

Who will address the long-standing issues that have plagued our economy?

I must admit I feel let down.

I always thought that politicians would act in our own best interest to address these issues.

However, too many years have passes and we are still talking about the same things.

What about the hopes and dreams we look to pass onto our children?

What steps are we taking to give them the opportunities we were afforded?

We look to politics to address the global issues,

However what steps can we take to make sure we are not talking about the same issues in years to come.

If you are in business, what are you doing to make it more competitive?

Where do you see your business in 5 years?

What steps are you taking to increase the efficiencies?

What if you lost a key person?

Is there a succession plan in place?

What are your employees saying about health benefits?

Do you have a retirement program in place?

These are opportunities we handle on an everyday basis.

To learn more visit our website

www.hbsadvantage.com

We look forward to hearing your thoughts and discussing them with you.

Gold futures hit $1,000 an ounce for the first time Thursday, pushed past the benchmark by the sinking dollar and record crude oil prices.

The dollar fell below 100 yen during Asian trading Thursday, its weakest level against the Japanese currency in 12 years. The dollar also dropped to all-time lows against the euro.

Crude oil futures hit a record high above $110 a barrel Thursday, after first crossing that level Wednesday, also due to investors abandoning the weak dollar.

Oh boy, hold onto your seat!

Can anyone make sense of this?

There are so many opinions flying around, who will get hurt in the end?

Someone may be making money but it’s not Middle America.

We try to stay focused, making it thru another day with our eyes focused toward a brighter future. 

The Federal Reserve’ is meeting next week and could provide more encouragement for gold prices since the Fed is widely believed to be considering cutting interest rates again.Another rate cut could reduce the dollar’s value further, making gold an even better investment.

Is your head spinning yet?

Too much information, I am beginning to feel like a daily trader. 

Sometime you have to take a moment to step back and ask;

How is all this affecting me and what can I do to insure my business and family’s security. 

You have just taken the first big step by asking this question.

HBS has great success creating opportunities that define future savings.

Our clients are saving 15% to 40% on everyday business services.

Many clients are receiving refunds for overpayments of Payroll Taxes and Sales Tax. 

Dou you qualify?

Why not ask!

Contact us and learn what opportunities are available for your company.

george@hbsadvantage.com

To learn more visit our website

www.hbsadvantage.com

 

Turn on the TV, we are being blasted 24/7.

Obama….Clinton….McCain

Who said what today.

How do you think the other candidate will respond?

Throw the kitchen sink at him,

if that doesn’t work throw the toilet.

He has no experience,

Is being first lady count as experience?

He is more of the same.

However you want to phrase it, we seem to be having problems.

My oldest son, George IV just went to Europe, exchange rate 1.52 “ouch”!!!

Oil prices have topped $109 a barrel!

They are saying we’ll see $4.00 gas this summer

Foreclosures are at an all time high!

Meanwhile the value of our houses’ keeps falling,

Down 10% – 20%, depending on where you are located.

What is the answer?

Do we wait for the new President to be elected? 

The answer lies with you. 

You must create the opportunities that will help you sustain thru these difficult times. 

Hutchinson Business Solutions creates opportunities to provide savings. 

We just don’t look at things and ask why,

We ask why not!

Don’t be caught up in the same day-to-day business cycle.

Difficult times command “Bold solutions!” 

Thinking “Outside the Box” 

Current economic situations present a call to action. 

We are just not looking for way to sustain.  

We provide solutions that allow you to prosper and grow.

Catch the fever!

Call 856-857-1230, to learn more about opportunities available for your company.  

          Hutchinson Business Solutions…Your CFO on the Go.     

      Creating opportunities today … Defining profits for tomorrow.

I was catching up on my weekend news blips and they said something about $4.00 gas by May.

 

Is this the next hurdle?

 

I remember riding down Haddonfield road with my son Grant last year and he said, “ Look dad, gas is only $2.62.”

 

My response was, “they got you right where they want you.”

They take the time to run the price up over $3.00 and then scale it back to just under $3.00 so you feel you are getting a break or a discount.

 Are you prepared for $4.00 gas?

Is that in your budget?

Electric

On another note; the state has just finished their annual electric auction.

Guess what is going up as of June 1, 2008?

Just in time for summer!

All indications are showing that increases will be about 10%. 

NaturalGas

Not to let gasoline or electric to share the spotlight alone, natural gas is still on the rise.

All indications are that pricing is running against the tide.

Reserves are at a 5-year high!

Has there even been a cold streak this winter?

Where’s all the snow?

Yet prices are climbing and are running from $13 to $15 a decatherm.

State of the Economy

I heard the R word this weekend. 

Warren Buffet said we are in the beginning of a recession.

Politicians are in denial until after the election!

What are your thoughts? 

Hutchinson Business Solutions

How is your business doing?

Have you been pro-active in addressing rising cost?

Our specialty:

Creating opportunities today…..Defining savings for tomorrow.

 

We are here to serve.