During the financial crisis, government officials often talked about performing “stress tests” on the financial institutions to see how they would fare if the financial crisis worsened. I didn’t really understand what they meant by “stress tests” because I didn’t see how you could do traditional stress testing, as you would on like a chair, on a bank. If you’ve ever been to an IKEA, you’ve probably seen them demonstrate durability with stress tests (the classic robotic pushing down on the POÄNG Chair and the labeled floorboards that talk about the number of people who have walked over them), but how do you stress test a bank?

In reality, a bank stress test is simply scenario analysis. What would happen if the stock market, say the S&P500 index or the Dow Jones Industrial Index, fell by 20%? 50%? What happens if the yield on the 30 year Treasury increases or if the Fed increases the federal funds rate? Analysts run these various scenarios and look to see how the bank will perform (i.e. survive) under t

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If you invested in the real estate market recently and are now regretting that decision, there are a few ways that you can get out of financial trouble. For awhile, the real estate market was very solid and property values were going up. Many experts advised investing heavily in real estate, seemingly forgetting to take into consideration that the ride couldn’t last for long. This means that thousands, if not millions of people, are now wondering how they can get out of the real estate market and salvage at least some of their investment.

First, it is important to see if you really do need to get out. If you have only one property and its value is dropping fast, it can be tempting to unload it. However, those property values will eventually come back up. If your property is located in a good area, you may be better served to hang on to it until the market stabilizes. Y

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The top 5 tips weekly post is always full of hints and tips for small, home & micro business owners.

1. Make sure that your choice of CRM software is fully integrated with the rest of your key business systems.

2. CRM software will allow you to keep a full record of all of your customer service interactions. This can then be used for staff training purposes.

3. You can use the data that is generated by your CRM software in a number of ways. It will allow you to evaluate how quickly and effectively you deal with queries.

4. The most effective small business customer service is a combination of excellent an CRM system with a pro-active social media presence.

5. Don’t break the bank when choosing a new CRM system. T

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Savings bonds are Treasury securities that are payable only to the person to whom they are registered. This means that you can’t resell them, but you can cash them in. Savings bonds can earn interest for up to 30 years, although you can cash them in after one year – the minimum holding period – with a penalty. If you redeem a bond before five years, there’s a three-month interest penalty.

The government issues two savings bonds — the I bond and the Series EE Patriot bond.

The I bond is an inflation-indexed savings bond. It has a fixed rate of return plus an inflation premium. The fixed rate and the inflation premium are adjusted every May and November by the Treasury Department. But the fixed rate assigned when you buy the bond is good for as long as you hold the bond. The

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I have completed a preliminary Q3 2010 review based on the current S.E.C. filings (finals in mid-December) and the statistics that have emerged are ones of healthier balance sheets with continued cost controls and limited expansion. Third quarter buybacks are running 6.4% ahead of second quarter buybacks, and 129% above the depressed Q3 2009 period. Companies continued to match buybacks with employee share options to limit any earnings dilution due to share count increase. Overall, I found share counts slightly declined, at less than half a percent, which represents normal corporate actions, and not an active attempt at share count reduction (which increases earnings per share). I did note an increase from the second quarter in the number of companies that reduced their shares count by at least 2% during the quarter; however, given the expectation of higher year-end options being exercised, I am withholding interpreting the escalation as a longer-term aggressive move at share count reduction. Read more…

It’s that time of year again – annual employee performance review season!

And with employee reviews comes the inevitable question of how do you reward high-performing employees?

Do you give them a wage increase, hand-out a one-time bonus, or both? In a tough economy, are there other ways to reward employees, without breaking the bank?

Here are some tips for assessing the best ways to reward your employees based on a strong performance review.

Assessing Performance

When it comes to reviewing employee performance and assessing eligibility for a pay increase or other benefits, it’s best to establish a clear grading system upon which to measure performance in a fair and consistent manner.

A good rule of thumb is to set your own guidelines for assessing employees against key areas and then weighting these according to importance:

For example,

• Performance (50%) –Under this there may be a sub-set of specifics related to that individual’s job function.

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