Caught by the tale!

April 30, 2008

 

As reported today in Bloomberg.com

The Federal Reserve lowered the benchmark U.S. interest rate by a quarter point to 2 percent and indicated it’s ready to pause after seven cuts since September.

“The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time,” the Federal Open Market Committee said in a statement after meeting today in Washington. The central bank also warned that “some indicators of inflation expectations have risen in recent months.”

Chairman Ben S. Bernanke and his colleagues dropped a reference to “downside risks” to the economy, while acknowledging the damage that the housing slump has wrought on the six-year expansion. Stocks surrendered gains on speculation the most aggressive monetary-policy easing in two decades is approaching an end.

“We do not expect to see a rate cut at the next few meetings without a substantial contraction of the economy,” said Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “We are not yet to Memorial Day weekend, but the Fed effectively told us today to take the summer off.”

Inflation Outlook

Oil prices reached another record high of $119.93 a barrel on April 28. The Fed said indicators of inflation expectations have risen.

“The committee expects inflation to moderate in coming quarters, reflecting the projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization,” the Fed added. “It will be necessary to continue to monitor inflation developments carefully,” the Fed said.

At the same time, the economy is faltering. Hours before the Fed decision, the Commerce Department reported that gross domestic product increased at an annual pace of 0.6 percent last quarter. Spending by households, the biggest part of the economy, grew at the slowest pace since 2001, when the U.S. economy was in a recession.

Our Perspective:

Where is the reality check for middle America?

Now the Fed is worrying about inflation. Food and gas prices have risen sharply! This is making it very difficult for families to keep up.

Where will we find relief?

It is getting more difficult to meet monthly expenses, let alone trying to add to our savings account.

Small and medium size businesses are caught in the crunch.

Should you find yourself dealing with these tighter dollar issues, give us a call. We are working with companies creating opportunities to lower cost. There are still many opportunities to find savings.

Don’t be complaisant! Be Proactive!

We are here to serve. Contact george@hbsadvantage.com

Visit our website www.hutchinsonbusinesssolutions.com to learn about opportunities available to reduce cost and provide savings for your company.

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Did You Know:

 

  • Unemployment is the 2nd  highest employer mandated tax
  • Each claim should be looked at as a potential $12,000 liability
  • Your Unemployment account is similar to having an open checkbook with the State:
    • The State assigns your rates
    • The State has total control of all monies in the account
    • The State determines the amount of each payment and disburses payments from this account
    • The State sends a quarterly reconciliation of all activity in the account
    • Would you handle your personal account this way?

 

Did You Know:

 

  • State of New Jersey has  a 12% error rate in the payment of unemployment claims.

 

The states are overpaying the amount of the claims and taking money from your account.

 

How we can help:

Our unemployment claim service will lower your rate because

  • We will audit every claim
    • Is the claim your responsibility?
    • Is the proposed dollar amount to be paid correct?
    • Are you 100% responsible for the claim being paid?
    • Is your account being charged for subsequent activities?

 

  • We will become the address of record and promptly notify you and file all necessary claim forms for your company.

 

  • We will review your existing claim procedure and make updates as needed to coordinate the handling of claim information between our offices.

 

  • We will hold seminars with key individuals and train your employees

 

  • We will reconcile your account to make sure the state has properly recorded all the payments and payroll information  that has been forwarded to their office.

 

  • We will verify your rate annually and determine if a voluntary contribution is applicable.

Should you want to know more about unemployment you may email george@hbsadvantage.com.

Visit our website www.hutchinsonbusinesssolutions.com  to learn more about opportunities to create savings for your comany.

The New Jersey Board of Public Utilities (BPU) announced at a press conference in Burlington last month that it has teamed with BP Solar and Home Depot to offer solar systems at 65 Home Depot retail stores throughout New Jersey.

The coalition came together as a result of BPU’s Clean Energy Program, which provides rebates to consumers worth 60%–70% of the cost of a solar electric (PV) system. BP Solar participates because it wants access to the New Jersey market, and Home Depot wants a supplier of solar power equipment for homeowner customers. Mary Shields, regional president of BP Solar of North America in Frederick, Maryland, described New Jersey’s solar policy as one of the best in the world.

Home Depot conducts a free evaluation, installs the PV systems, and manages the paperwork for collecting the rebate from BPU. The retailer usually offers to finance the system for the homeowner. Rob Titone of Burlington said at the press conference that Home Depot calculated a simple payback of 8.5 years for his investment of $25,000 in a PV system on his home.

BPU President Jeanne M. Fox said, “Coupled with our incentive program, the launch by BP Solar and Home Depot moves New Jersey to the forefront of the solar energy industry.” Since New Jersey established the solar rebate program in 2001, more than 600 households, businesses, churches, and farms have purchased solar systems. And Fox notes that 475 applications are pending.

See more New Jersey project descriptions published in Conservation Update.

Read recent New Jersey news stories about state involvement in renewable energy and energy efficiency projects published on the EERE Web site.

Project description of a state energy office project dealing with energy efficiency and renewable energy that the State Energy Program (SEP) published in its bimonthly newsletter Conservation Update.

 

Shuld you want to know more about solar opportunities for your business or home contact george@hbsadvantage.com

Failing the unemployed

April 24, 2008

The U.S. unemployment insurance system, the primary safety net for workers in times of economic recession, is in need of significant repair. The current system, a state-by-state patchwork of policies and provisions, is rife with shortcomings and inequities. Perhaps the most important of these involves the difficulty many workers face in even qualifying for benefits. Unfortunately, those who are eligible to receive benefits sometimes find that the maximum benefit amount does not keep a family from falling into poverty. To make matters worse, unemployed workers and their families certainly aren’t helped by the fact that benefits often run out long before firms begin to re-hire workers. Of course, states could protect workers by extending the benefit duration, but many states have not adopted the provisions necessary to weather an economic downturn like the one the economy is now experiencing.

 

Structural problems with unemployment insurance


Workers are losing both coming and going – many are denied benefits while others see their benefits run out long before the job market rebounds. There are even problems for those who actually qualify for benefits. Most middle-class earners, who receive their state’s maximum unemployment insurance benefit, will struggle to eke out a poverty-level existence from UI. For many this means dipping into savings, using money earmarked for retirement, or increasing debt. For those without any of these resources, welfare may be their only recourse. Recent research indicates that nearly one-third of U.S. families will be unable to replace even 10% of their lost earnings from their savings during a spell of unemployment. For many of these families UI benefits represent the difference between stifling debt and financial security.

 

Grading unemployment insurance programs state by state


The deficiencies in the state unemployment insurance system result from its highly decentralized structure. The current arrangement allows states to act autonomously in setting eligibility rules, benefit levels and extensions, adequate financing, and taxes. To truly understand the deficiencies of the system, a state-by-state analysis is required. We have chosen critical qualities of the unemployment insurance system – eligibility, benefits, employer taxes, funding adequacy, and recession preparedness – and evaluated them according to each state’s policies.

 

Eligibility


The unemployment insurance program is a federal-state partnership, with eligibility for benefits determined at the state level. To qualify for benefits, unemployed workers must meet monetary and non-monetary requirements that vary by state. In simplified terms, the criteria that workers must satisfy are:

 

  • sufficient wages in the past year,
  • involuntary separation from employment, and
  • availability for work.

 

 

Although the principles embodied in these criteria are fair and appropriate, too often these tests result in the denial of benefits to two groups of unemployed workers: part-time workers and workers who have only recently joined the labor force.

 

Earnings requirements.

 

Eligibility can hinge on a state’s minimum earnings requirements in either the base period or the quarter with the highest earnings from the one-year base period. Base period wage requirements for minimum benefits range from $565 to $3,400, and high quarter wage requirements range from $150 to $2,266,5 though not all states have both base period and high quarter requirements.

 

In addition to requiring varying levels of earnings, states also set requirements about when those earnings must occur. In most states, the base period for determining UI eligibility and benefit levels is the first four of the five most recently completed quarters. Under this system, wages earned in both the current calendar quarter (the quarter in which the layoff occurred) and the previous calendar quarter are ignored in determining whether the worker earned enough to qualify for benefits. For example, someone laid off in late December 2007 and who began work in late February 2008 would not qualify for benefits in most states. Ten months of substantial wages does not immediately qualify a recent entrant to the labor force for unemployment insurance benefits in a state that uses the typical base period. Some states use a so-called “alternate base period” that incorporates the most recently completed quarter’s wages.

 

Non-monetary requirements.

 

In addition to varying earnings requirements, all states require that workers have lost their jobs involuntarily and through no fault of their own. States also require that workers be actively engaged in job search activities and that they be available for work. But states vary in their definitions of involuntary job separation and availability for work. For example, some states would deny a working mother UI benefits if she lost her job because the unavailability of child care prevented her from being able to change her work schedule from first shift to third. Some states also require workers to be available for full-time work, even if the job they lost was part time.

 

Benefit adequacy


Although eligibility is the single most important component of the unemployment insurance system, benefit levels are a close second. Paying adequate benefits can mean the difference between moderate hardship and privation. Benefits serve a dual purpose in the unemployment insurance system. First, they provide families the income assistance they need during a period of job loss. Without these benefits poverty rates among the jobless would be considerably higher. Secondly, the money put into the economy by the unemployment insurance system acts as a significant economic stimulus. Estimates indicate that, in the absence of UI benefits, recessions (as measured by a real decline in gross domestic product) would have been 15% deeper.

 

While the importance of UI benefits is clear, benefit adequacy, especially for those with low earnings, is ambiguous. Over time, little has changed in the way state systems calculate benefits, while much has changed within the U.S. labor market, especially in terms of U.S. poverty policy. This change in policy, initiated by Congress in 1996, requires the poor to work in the paid labor market. Since many of these workers may no longer be able to rely on welfare in times of economic distress, it is incumbent on the unemployment insurance system to cover the holes in the safety net.

 

Yet replacing nearly half of a poor worker’s lost income is very different than replacing half of a middle-income worker’s earnings. For those hovering on the brink of poverty while working, replacing half of their lost income means certain poverty. With more welfare recipients and low-income workers filing for benefits, a minimum benefit that replaces two-thirds of their lost wages makes more sense. Making benefit payments progressive in this way will help these workers pay for adequate food, clothing, and shelter.

 

The above is an excerpt I found that provided a good overview of the current unemployment program. Although written in 2002 by Economic Policy Institute, it is still pertinent today.

 

Let us know your thoughts?

 

You can email george@hbsadvantage.com

The Solar Center recently completed the installation of a 25 Kilowatt solar electric system for Energy Kinetics Corporation, a New Jersey manufacturer of high efficiency combined heat and hot water systems located in Lebanon, NJ. The solar electric system is mounted on a portion of the roof of its manufacturing facility and will produce approximately 28,700 kW hours of electricity annually. The system is anticipated to save thousands of dollars a year in energy costs and save over 204 tons of carbon dioxide emissions over its operating life.

“The Energy Kinetics solar system is the first system to be installed in New Jersey under a new ‘SREC-Only Pilot Program’, a performance based incentive program developed by New Jersey’s Board of Public Utilities (NJBPU) and administered by the New Jersey’s Clean Energy Program (NJCEP)”, said Dennis Wilson, the President of The Solar Center. “This program be the primary incentive used to support the development of enough solar electric generation to meet New Jersey’s commitment in its Renewable Portfolio Standard(RPS)”.

“The SREC-Only Pilot Program enables Energy Kinetics to earn tradable Solar Renewable Energy Certificates (SRECs) from the metered electrical production of the solar system”, said Wilson.

Under the SREC-Only program, energy generators that supply electricity within New Jersey must provide a portion of their electricity from solar electric systems. Those suppliers that do not have solar facilities must either buy SRECs from solar producers or pay a Solar Alternative Compliance Payment (SACP) penalty to the BPU in lieu of purchasing SRECs. The production of each 1000 kWh of solar electricity earns one SREC, which have sold as high as $265 each during 2007.

The value of each SREC is expected to jump for SRECs produced after May 31, 2008, when the SACP level more than doubles. Energy Kinetics can utilize a 30% Federal Investment Tax Credit (FITC) and rapid depreciation of the solar asset to reduce its tax bill. The savings from tax credits combined with income from SREC earnings and electric bill savings will enable Energy Kinetics to recover its investment within eight years and enjoy the production from the solar system for at least thirty years.

As Energy Kinetics’ President, Roger Marran states, “This important project has allowed us to turn our philosophy of renewable energy and conservation of fossil fuels into a reality. By maximizing clean, solar energy to manufacture our flagship product, System 2000, homeowners and business owners can conserve energy currently embodied in oil and gas and extend our efficient use of available fossil resources.”

The NJBPU expects that new SREC-Only Pilot Program will be a more viable incentive than the previous commercial rebate program and will have minimal impact on electric rates long term. This transition from rebates to performance based incentives is expected to allow for the increased installation of solar generating capacity in 2008 and beyond.

To learn more about New Jersey Solar opportunities contact george@hbsadvantage.com 

Hutchinson Business Solutions …….. Your CFO on the Go

Creating Opportunities Today……Providing Savings for Tomorrow

Visit our website www.hutchinsonbusinesssolutions.com to learn more about opportunities for savings.  

Solar….The New Sexy

April 22, 2008

Can you help me with our energy cost?

This is one of the biggest issues we hear when meeting with our clients or meeting potential clients.

Our electric bills are killing us!

Deregulation began in the late 90’s and it presented opportunities for a short time in the commercial market. However, the utilities learned how to play the game and unfortunately that opportunity for savings did not last for long.

Electric cost have continued to increase from 10% – 14% per year. Commercial clients are currently paying close to $.16 per KWH for electric.

What if you became the electric supplier?

New Jersey has just released their master energy plan which calls for a 20% reductionof electric usage by 2020.

Currently our electric demnd is increasing at a rate of 1.5% a year!

New Jersey is looking to increaee the amount of renewable energy sources such as solar and wind from the current 1.6% to 22.5% by 2020.

Although the solar market has been around for the past 35+years, the cost have been seen as too high to produce a viable ROI.

This has changed!

The push to go solar is on.

Federal Tax Credits, Provider SRECS dollars, State Tax Exemptions, and accelerated depreciation allowances have peaked consumer interest.

Just the thought of your provider paying you for electric has turned this market upside down.

Financial incentives have made solar sexy again!

Should you like to know more about the solar opportunity in your area you may send an email to george@hbsadavantage.com .

Hutchinson Business Solutions…………..Your CFO on the GO

Creating Opportunities Today……Defining Savings for Tomorrow

Visit us on the web www.hutchinsonbusinesssolutions.com to learnmore about saving opportunities available for your company.

As reported in Bloomberg:

April 17 (Bloomberg) — The U.S. House of Representatives, trying to avert a looming shortage in available student loans, approved allowing the Department of Education to buy federally guaranteed loans that lenders are unable to sell to private investors.

The action is intended to address a crisis in the market that has forced Citigroup Inc.‘s Student Loan Corp., SLM Corp. and about 50 other lenders to stop writing some forms of student loans. The companies cite increased borrowing costs, cuts in government subsidies for education loans and a lack of investor interest in securities backed by loans.

Without government action, demand for federally backed student loans would outstrip supply, industry officials said. About 7 million borrowers will need more than $68 billion in federal loans this academic year, according to Education Department estimates.

The measure would “ensure America’s families can continue to access the federal college loans they are eligible for regardless of what is happening in the credit markets,” said Democratic Representative George Miller of California, the chairman of the House education panel. The legislation approved today also would increase the amount students could borrow.

Congress is considering other measures, and lawmakers have urged the Treasury Department and the Federal Reserve to take action to provide liquidity for federally backed loans.

The global credit crunch has raised student-loan makers’ financing costs, and they’re unable to raise the rates they charge for federally guaranteed loans because the rates are locked in by the government.

Our perspective:

Next year we have my fourth child going off to college. I remember sitting with our tax attorney when they were younger asking,

 “How will we were ever going to afford to put our 4 children thru college?”

His answer:

 “You’ll never be able to save enough, that why they have the student loan programs.”

Thank God for Sallie Mae!  It has helped to provide a great educational opportunity for our children.

The cost of college continues to increase. When our oldest son started at St Joe’s in Philly back in 2000, it was $22k a year. Now it cost $42k!

Are you taking steps to help underwrite the cost of college?

Do you have a college savings fund for your children?

What steps can we collectively take to insure that college will be affordable for the next generation 20 years from now?

What are your thoughts on the House taking these steps?

Do you have a question?

 

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.

Who defines Recession

April 16, 2008

 As reported in Bloomberg:

April 16 (Bloomberg) — Economists arguing over whether the U.S. is or isn’t in a recession may now have a new measuring tool: mentions of the word in the New York Times.

The economy shrank the five previous times since 1960 that “recession” appeared this often in the 156-year-old newspaper, investment-research firm Bespoke Investment Group LLC said today.

“Once the media and everybody starts talking about it, it can become a self-fulfilling prophecy,” Bespoke’s Justin Walters said during an interview. “It just adds to the pressure on the economy.”

The Standard & Poor’s 500 Index has retreated 13 percent since reaching a record in October amid concern $245 billion in subprime-related losses at banks worldwide will slow growth. The U.S. is, or will soon be, in a recession, according to the majority of economists surveyed by Bloomberg News from April 2 to April 8.

“The word `recession’ has spiked significantly since the third quarter,” according to Harrison, New York-based Bespoke’s report. “There were spikes in `87 and ’98/’99 that didn’t turn out to be recessions, but the spikes didn’t reach current levels.”

Our Perspective:

I am interested in hearing from you as to what your thoughts are.

Are we in a recession?

Energy, food, medical cost are rising.

Unemployment claims are at record highs.

 The Fed keeps dropping the rate but credit is tight.

Are these signs?

What are you doing to address these issues?

Do you feel powerless?

What if you are a business owner?

Are you taking the steps to position your company?

Our clients are being proactive and asking questions.

They are creating opportunities to provide savings.

Do you have a question?

 

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.

Going Up!

April 15, 2008

As reported in Huffington Post:

 

Crude oil prices rose to within a penny of $114 a barrel Tuesday, setting new records as concerns mounted about global supplies. U.S. retail gasoline and diesel prices also struck new highs.

Meanwhile, retail gasoline prices rose to a new average national record of $3.386, according to AAA and the Oil Price Information Service. Prices were highest in California, where mid-range and higher grades are now averaging more than $4 a gallon.

Diesel prices at the pump jumped to $4.119, also a record, setting the stage for higher prices on food and other goods transported by truck, ship and rail.

The U.S. is also wrestling with the worst food inflation in 17 years, and analysts expect new data due on Wednesday to show it’s getting worse. That’s putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases to their customers.

U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the last 15 years, according to the U.S. Department of Agriculture. And the agency says 2008 could be worse, with a rise of as much as 4.5 percent.

Higher prices for food and energy are again expected to play a leading role in pushing the government’s consumer price index higher for March.

Analysts are forecasting that Wednesday’s Department of Labor report will show the Consumer Price Index rose at a 4 percent annual rate in the first three months of the year, up from last year’s overall rise of 2.8 percent.

For the U.S. poor, any increase in food costs sets up an either-or equation: Give something up to pay for food.

Our Perspective:

Focus on that last sentence above. Go ahead, reread it!

This is 2008 and we are still having this conversation.

Can you imagine having to choose between food for your family or medical care or heat for your family?

Sad to say some people are forced to make this choice.

What are you doing to make a difference?

What can you do to make a difference?

Don’t turn a blind eye,

You can make the difference!

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.

 

 

As reported in Bloomberg.com

 

April 14 (Bloomberg) — Americans spent less on furniture, clothing and appliances in March as the economy faltered and more of their money went to pay for gasoline and food.

 

Consumer spending, which accounts for more than two-thirds of the economy, is waning as households struggle with an 11 percent jump in gas prices this year to $3.37 a gallon, a rising jobless rate and a slump in home values. Investors anticipate that the Federal Reserve will cut its benchmark interest rate at least a quarter point this month to alleviate the economic downturn.

 

Sen. John McCain (R-Ariz.) said Monday that he believes the country is in a recession, adding “these are very, very tough times in America.”

 

“Americans are hurting today,” McCain said at an Associated Press forum in Washington, D.C. “They’re hurting in the towns and cities across America.

Our Perspective:

At least we find that we are now leaving the state of denial. Politicians have been reluctant to say the R word. They were constantly talking about taking certain preventive steps.

Probably Too little …Too late!

What can we do?

If you own a business it would be prudent to look at the cost of your operation. I recently met with the Executive Director of a local non-profit. They have been hit hard with budget cuts that compound the problem of meeting rising cost.

There are opportunities to provide savings but there is no silver bullet. Companies are looking at a wide range of cost: Employee Benefits, Business Insurance, Energy and Telecom to name a few.

Our clients are being proactive and reviewing their cost.

To pay less does not equate to getting less.

Many times we find our clients are just paying too much!

It’s your call?

Do you have a question?

 

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.