If you think geeks cannot be funny, you would be wrong.  Here is our second post of technology jokes.

C++ programmers tend to be a little stringy.

Five cannibals had H1-B visas so they were hired by a high-profile IT company.  After 90 days the IT Director calls them in for a review.  He starts, “You are all working very hard, and I am very satisfied with all of you.  However, one of our janitors has disappeared. Do any of you know what happened to her?”  The cannibals disavowed all knowledge of the missing janitor.  After the Director leaves, the leader of the cannibals says to the others, “Which of you idiots ate the janitor?”  A hand is hesitantly raised.  The leader of the cannibals yells at the respondent: “You fool!  For weeks we have been eating Team Leaders, Project Managers, and Systems Auditors so no one would notice anything, and you have to go and eat a janitor!”

Al Gore, Barack Obama and Steve Ballmer all died in a plane crash and went to a better place. God turned to Al Gore and said, “Tell me what is important to you.”  Al responded that he felt that the earth was of the ultimate significance and that protecting the earth’s ecological system was most important. God looked to Al and said, ” I like the way you think, come and sit at my left hand.”  God then asked Barack Obama what he revered most. Barack Obama responded that he felt that the hope for change was most important. God responded, ” I like the way you think, come and sit at my right hand.”  God then turned to Steve Ballmer, who was staring at him indignantly with his red face.  God asked, “What is your problem Steve Ballmer?”  Steve responded, “I think you are sitting in my chair.”

The Top Ten Software Applications in Hell:

1.      Windows 666

2.      Maxi iPad Touch Interface

3.      Purgatory GPS

4.      Witch Server Tip Calculator

5.      Jim Jones’ Kool Aid Recipes

6.      Hyperion Essbase

7.      Jesse Jackson Rhyming Dictionary

8.      SAP for Small and Medium-Sized Covens

9.      Hitler and Himmler’s Facebook Friends Suggestions

10.  Chat Roulette

One good thing about being a programmer for Madoff was that no one complained about your output.  There were no required parallel tests.

How many IRS system engineers to milk a cow?  Eleven.  One to hold the udders, and ten to lift the cow up and down.

How many IRS system engineers does it take to change a light bulb?  One, but it may take him more than five years to get it done.

How many Microsoft software engineers does it take to change a light bulb?
None, the Microsoft help desk will tell you that it is a hardware problem.

Sign spotted at the Microsoft help desk:  “People who think they know everything about the latest software are particularly annoying to those of us who do.”

A young Microsoft programmer, Sid, was daydreaming when the program manager, Ted, called on him.  “What do you think is causing this program loop?”  Sid said, “I am sorry I did not hear you.  I was lost in thought.”  Ted replied, “Well, I am not surprised you were lost.  I realize that thinking is unfamiliar territory for you.”

WYSIWYG – When You’re Stumped Is When You Google

To copy from one program is plagiarism, to copy from five is research.

The number of financial reporting restatements fell in 2009 for the third year in a row according to an analysis by the research firm Audit Analytics.  Is the Sarbanes-Oxley (SOX) Act, and, is the more recent focused enforcement of that Act by the Securities and Exchange Commission, responsible for the better reporting?

Overall, 630 companies filed 674 restatements last year, says Audit Analytics.  This represents a 27% decline from 2008. The number of restatements peaked in 2006, when 1,564 companies filed 1,795 restatements.

Audit Analytics also reported that the severity of restatements also declined, especially for companies listed on major stock exchanges.  As usual, the restatements generally result in lower earnings.  Last year 232 such companies restated, losing an average of $4.6 million from net income. That was down from 301 companies and $7.2 million in 2008 and 389 companies and $8.6 million in 2007. The change in the average size of the restatement is even more dramatic compared with 2002, when restatements reduced net income by an average of $76.5 million per company.

Audit Analytic’s report attributes the decline in restatements to two factors: improved internal controls as a result of SOX, and a 2008 recommendation by the SEC’s Advisory Committee on Improvements to Financial Reporting that the agency relax its requirements on what types of errors should trigger restatements.

Audit Analytics’s data suggests that restatements are being completed more quickly.  The SEC has made a redo procedurally easier as well. For the 630 companies, it took an average of 10.4 days between when they first announced the need to restate and when they filed the restated numbers, down from 17.6 days in 2008 and 20 days in 2007. Also, the average number of issues addressed by a restatement has steadily dropped since 2005, from 2.43 to 1.48 in 2009, and the restatements have covered a progressively shorter time span.

The majority of companies issuing restatements were nonaccelerated filers, smaller companies that don’t yet need to conform to auditor reviews under the internal-controls provision of Section 404 of the Sarbanes-Oxley Act.   About 374 of 522 refilers in the United States were nonaccelerated filers.  One reason is that there are more nonaccelerated filers than accelerated ones.

It is not long until your federal income tax return is due.  Here are some deductions and credits you should not overlook.

Do not forget that day camp fees may be deductible.

Child care credit – If you pay your child-care bills through a reimbursement account at work, do not forget the child-care credit.  Although only $5,000 in expenses can be paid through a tax-favored reimbursement account, up to $6,000 (for the care of two or more children) may qualify for the credit.  Even if you run the $5,000 maximum through a plan at work but spend more for work-related child care, you can claim the credit on as much as $1,000 of additional expenses.  To be able to claim the credit for child and dependent care expenses, you must file Form 1040, Form 1040A, or Form 1040NR.

Charitable contributions – You have been a generous person.  Do not forget to include ALL of the deductions to which you are entitled.   Review your bank accounts for checks to charities.  Do not forget payroll deductions for United Way or other check-off charities.  Your last December pay stub may have the totals withheld for the year.  You can also write off out-of-pocket costs incurred while doing your good works.  Supplies you provide or use for a nonprofit organization are deductible. Stamps you buy for nonprofit fundraising count as a charitable contribution. If you drove your car in helping a charity in 2009 you may deduct 14 cents for every mile you put in your car on their behalf.

Moving expenses to take your first job – Moving expenses to get to a new or your first job are deductible.  If you moved more than 50 miles for the new position, you can deduct the cost of getting yourself and your household goods to the new area.  You may include 24 cents per mile if you drive your own vehicle for a 2009 move.  You may also deduct any parking fees and tolls you pay in route.  You have to hang in their in the new job.  You must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location.

State sales taxes- If you live in state that does not have an income tax, you may choose to deduct state and local sales taxes.  (See post at   http://www.johnbrianfastcpa.com/1389/states-with-no-income-tax/   for states that have no income tax.)  The IRS has tables that show how much residents of various states can deduct.  However, these tables do NOT include local sales taxes.  For example, in Dallas, the local sales tax is 8.25% because of local additions, but the tables for Texas only show 6.25%.  In this case, use the 8.25% amount.  If you purchased a vehicle, boat or airplane, you may add the state sales tax you paid for these big-ticket items to the amount shown in the IRS tables for your state.  Sales taxes for building materials that are for remodeling or renovations should also be added.

Military reservists’ travel expenses – Members of the National Guard or military reserve may tap a deduction for travel expenses to drills or meetings. To qualify, you must travel more than 100 miles from home and be away from home overnight. If you qualify, you can deduct the cost of lodging and half the cost of your meals, plus 55 cents per mile for 2009 for driving your own car to get to and from drills.  Again, like moving expenses, you can add parking fees and tolls.

State tax paid last year – This is a deduction that many taxpayers miss.  If you owed tax when you filed your 2008 state tax return in the spring of 2009 you may include that additional amount in your state-tax deduction on your 2009 return.  Of course, any state income taxes withheld from your paychecks or paid via quarterly estimated payments to the state are deductible.

Credit for energy-saving home improvements – These credits may be substantial.  The tax credit for the cost of energy-saving home improvements is increased to 30% for 2009 and 2010, up to a maximum of $1,500 in the two-year period.  This credit applies to biomass fuel stoves, qualifying skylights, windows and outside doors, and high-efficiency furnaces, water heaters and central air conditioners.  There is no dollar limit on the credit for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. Your credit can be 30% of the total cost of such systems.

The homebuyer credit has been expanded.

Homebuyer credit -

For most of 2009, only first-time homebuyers qualified for this credit. A “first-time buyer” is defined as someone who didn’t own a home in the three years leading up to the purchase of a new home.  However, after November 6, 2009. First, in addition to the $8,000 credit for first-time homebuyers, there’s a $6,500 credit for longtime homeowners, those who continuously owned a home for at least five of the eight years leading up to the purchase of a new home. The new law also increases how much buyers may earn and still claim the credit. For deals closed before November 7, the right to the first-time buyer credit gradually disappears as adjusted gross income rises between $75,000 and $95,000 on single returns and between $150,000 and $170,000 for married couples who file jointly. For purchases after November 6, the phase-out zones–for both the $8,000 credit and the $6,500 credit — are $125,000 to $145,000, respectively, for singles and $225,000 to $245,000, respectively for married couples.

The roots of Ernst & Young (E&Y) can be traced back over 100 years.  Pioneering accountant Arthur Young founded and headed the original Arthur Young firm in Kansas City back in 1895.   Ernst & Ernst was founded in Cleveland in 1906 by two brothers, Elwin and Theodore.  The descendants of these early firms, with past records of integrity and competence, merged in 1989.  But like an elderly couple that marries late in life, the merger partners do not seem to be as sure footed as in the past.

Some recent issues:

Selling fraudulent tax shelters – In the most damaging case to its reputation, four former employees of Ernst & Young were convicted last May (2009) of conspiracy in the design, marketing and implementation of tax shelters marketed by the giant accounting firm. Two partners, Richard Shapiro and Brian Vaughn, were sentenced in federal court in Manhattan.  Shapiro was sent to prison for two years and four months while Vaughn received a 1-year-and-8-months prison term.  Two other ex-employees had been previously sentenced.  The government said the tax shelters generated billions of dollars in fradulent paper tax losses that were used to offset actual income of clients.

Failure to follow generally accepted auditing standards – In another case involving professional incompetence, The SEC instituted public administrative proceedings against two former Ernst & Young auditors who failed to uncover the misappropriation of client funds. The engagement partner, Gerald Oprins, and Wendy McNeeley, the audit manager, learned that AA Capital’s president, John Orecchio, purportedly had borrowed $1.92 miillion in funds belonging to AA Capital’s clients between May and December 2004 to pay a personal tax liability.  Orecchio had invented the story about the “tax loan” to conceal his ongoing misappropriation of client assets for his personal use.

Did E&Y show everthing about AA Capital's related party transactions?

Among the more sensational allegations made by the SEC in this matter was the assertion that the reason that Orecchio needed money was he had begun spending lavishly on travel and entertainment.  Orecchio also began a relationship with a woman who performed at a Detroit strip club.  Orecchio allegedly began siphoning money from client trust accounts to fund his wild and lavish lifestyle.

Ernst & Young issued an unqualifiied audit opinion on AA Capital’s financial statements even though the statements did not properly identify Orecchio’s “loan” as a related party transaction as required by generally accepted accounting principles.  Further, the notes to the financial statements did not include a required note describing the related party transaction and did not disclose the “loan.”  The SEC found that Oprins and McNeeley had engaged in improper professional conduct.

The lamp went out at Sovereign Bank.

Negligence in auditing – Ernst & Young will have to pay $10.2 million in damages after a Florida jury determined that the firm was negligent in its audits of the now-defunct Sovereign Bank.  A plaintiff named Schein sued the firm in 2003 after selling a mortgage-marketing company, Results Technologies, to the Sovereign Bank in 1998.  The plaintiff claimed that he had relied on Ernst & Young’s audits of the bank before and after selling his company.  Ernst and Young later paid $125 million to settle the claims of regulators over the negligent audits.

Failure to detect overstated earnings – The auding part of a massive securities fraud class action lawsuit against Kansas City-based American Italian Pasta Co. was settled for $3.5 million, which Ernst & Young agreed to pay.  E&Y provided auditing services for American Italian, which reached a separate $25 million settlement with investors previously.  The lawsuit alleged that American Italian officials overstated earnings from 2002 to 2005.  The alleged overstatement led to inflated stock, which nose dived after the company announced in August 2005 that it was conducting an internal investigation.  Shareholders filed suit alleging American Italian officials and accountants with Ernst & Young were aware of the inaccurate earnings reporting.  About 22.7 million of the company’s shares were “damaged,” and that the average recovery per share amounts was determined to be 15 cents, according to the settlement with E&Y.

But a clock program error did inconvenience many PlayStation 3 users.

I always had sympathy for those poor individuals that were born on
February 29^th.  They only get to celebrate their birthdays once every four years.

February 29 is also an annoyance for programmers.  Apparently there are some engineers at Sony that thought the year 2010 was a leap year.  After February 28, 2010, many of the older PlayStation 3 models were experiencing errors related to their internal system clock.  The console’s clock reverted back to December 31, 1999.  On game boards the event was nicknamed the “ApocalyPS3,” a play on the name of the game “Apocalypse.”

The error code displayed was “8001050F,” and affected users were unable to sign in, play games, use dynamic themes and view trophies. The problem only affected the 1st through to the 3rd generation original PS3 units while the newer “Slim” models appeared to be unaffected by the clock problem.

Sony confirmed the issue, and stated, “We are narrowing down the issue and continue to work to restore service to all.” By late Monday, March 1, owners of the original PS3 could connect to PSN successfully and the console clock no longer showed December 31, 1999.  Sony also confirmed that the affected models had incorrectly identified 2010 as a leap year.

There are three other technical problems with the PlayStation 3 hardware that its users have reported on a fairly frequent basis:

Hot Games

1. Flashing red and green light – When the light on the front of the PlayStation 3 blinks red and green, it means that the system is beginning to overheat.  Ideally, you would have a super cool environment in which to play, like the old-fashioned glass enclosed computer rooms.  You should turn off your PS3 when you see this flashing red and green light display and check the vents to make sure that they’re not obstructed.  Move the PlayStation 3 to an area that isn’t enclosed or near other electronics. The PlayStation 3 generates a tremendous amount of heat, and it may be hazardous to other electronic devices, so stacking it with other machines should be avoided. When the PS3 reaches the point of completely overheating, it will flash red and then stop functioning.  You may be able to restore power by waiting for a period of time and restarting the device.

2. Video playback is fuzzy or distorted – This PS3 issue is most common with users that connect their PlayStation 3 to their TV sets through a VCR or VCR/DVD combination device.  The PS3 has a copyright protection function and it will show a distorted picture when hooked through a VCR.  The purpose of the distortion is to prevent DVDs from being illegally copied.  You must connect your PS3 directly to your television set if you want to avoid a bad picture while watching DVDs.

3. Games hang on the logo screen – This is a problem with the Blu-ray lens of the PS3.  If you have this problem then you will have to contact Sony for a replacement lens or a repair.

No head for separation of duties.

Koss Vice President Sujata Sachdeva has been accused of embezzling 31 million dollars.

Sachdeva’s alleged embezzlement from Koss Corp occurred over a five year period.  Huge sums were continually moved out of the company’s bank account, purportedly to pay off Sujata’s large personal credit-card charges.

Koss has fired Sujata Sachdeva, its former Vice President of Finance, after United States attorneys filed a criminal complaint against her, claiming she used more than $4.5 million of Koss’s money to buy clothing, fur, and jewelry at various luxury stores in Milwaukee during the past two years.  The government’s complaint says she made the questionable wire transfers from her office at Koss. The company’s CEO, Michael Koss, found several piles of clothing she had purchased with company funds with the price tags, totaling over $2,000, still attached.

An internal investigation has uncovered additional unauthorized transactions, from as far back as five years ago, totaling more than 31 million dollars.  As a result, Koss plans to restate its financial records for the past three fiscal years, and may go all of the way back to 2005 to make corrections.  The company’s stock is in limbo.  Nasdaq halted its trading on December 21, 2009.  The law firm of Bronstein, Gewirtz & Grossman has filed a class action law suit on the behalf of Koss stockholders.

A passion for internal controls?

The company fired its accounting firm, Grant Thornton, on last New Year’s Eve. The auditing firm’s excuse: “The company did not engage Grant Thornton to conduct an audit or evaluation of internal controls over financial reporting,” says a spokesperson for the accounting firm. “Establishing and maintaining effective internal control is management’s and the board’s responsibility.”

Koss’s management claims the company did have effective internal controls for fiscal years ending June 30, 2009, and June 20, 2008. Still, management’s report, enclosed in its most recent 10-K, acknowledges in boilerplate language that “because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.”

According to the US complaint against Sachdeva, neither Koss’s auditors nor its executives uncovered the alleged fraud.  American Express alerted CEO Michael Koss to several large wire transfers made from a Koss bank account to Sachdeva’s personal credit card. The purchases in question included $382,400 charged at two jewelry stores and $1.4 million racked up at one clothing boutique.

According to the US complaint, Sachdeva told FBI agents she had authorized an assistant to make the wire transfers, which she later concealed by falsifying the balance in Koss’s bank account.

From a security perspective, it appears that Koss did have control issues, specifically in the area of required separation of duties.  No one person should have access to cash and recording transactions.

While CEO Michael Koss certified the company’s financials and internal controls in the latest annual report, VP Sachdeva signed the 10-K as the company’s principal accounting officer.  She had been working at Koss since at least 1997, when she praised the merits of telecommuting to “CFO Magazine.” At the time, she was managing a nine-person finance department from her home in Texas, 1,200 miles from Koss’s Milwaukee headquarters. She later moved closer to the company but was known to take work home with her.

Will the SEC push forward in applying Sarbanes-Oxley to all firms?

This case could serve as a good example for critics of legislation that would permanently exempt smaller publicly traded companies from fully complying with the Sarbanes-Oxley Act.  Observers of the case believe Koss would not be starting off 2010 in reputation-repair mode if it had had better internal controls in place at the company.  The Securities and Exchange Commission has allowed nonaccelerated filers, companies with market caps below $75 million, to only self-report on the effectiveness of their internal controls for the past two years.  But the regulator has continually delayed the auditor-attestation portion of Section 404 for those filers. If there are no more delays or exemptions, companies like Koss will have to get their auditors to review their internal controls starting the summer 2010, depending on the company’s fiscal year-end.

Is that fair?

In tax protestor/murderer Joe Stack’s rant manifesto he railed against “the wonderful ‘exemptions’ that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy.”  Section of 501(c)(3) of the federal tax code does provide exemption from federal income tax for “charitable, educational, or religious” organizations.  Many honest, law abiding Americans, not as violent as Joe Stack, still question those federal exemptions.

Form 1023 is used to request an exemption from federal income taxes.

Now, some other governmental entities are starting to change long standing exemptions given to nonprofit organizations.  Faced with steep declines in tax revenue, an increasing number of states and localities are considering eliminating various tax exemptions for nonprofit groups. 

Revoking the nonprofit organizations’ exemptions from property taxes is under scrutiny in several counties in Kansas, as well as in Pennsylvania.  Also in the Keystone state, State Senator Wayne D. Fontana has proposed legislation that would impose an “essential services” fee on charities, based on the amount of property they control.  Minneapolis made charities subject to the same fees it charges businesses and residents for streetlights and other maintenance.  Hawaii is considering suspending a wide range of exemptions from the general excise tax, including the one held by nonprofit organizations.  The Honolulu City Council is talking about increasing the property tax on nonprofit groups, which is currently capped at $100 per entity.

Will California's budget issues lead to more taxes on nonprofts?

In California, nonprofit or exempt organizations do not have a blanket exemption from sales and use taxes.  However, some sales and purchases are exempt from sales and use taxes.  Examples of exempt sales include, but are not limited to, sales of certain food products for human consumption, sales to the United States Government, sales of prescription medicines and certain vehicle and vessel transfers.

Real and personal property owned and operated  in California by certain nonprofit organizations can be exempted from local property taxation through a program jointly administered by the Board of Equalization and county assessors’ offices in California. This exemption, known as the Welfare Exemption, is available to qualifying organizations that have exempt status under Internal Revenue Code section 501(c)(3) or 23701(d) of the Revenue and Taxation Code and are organized and operated exclusively for religious, charitable, scientific or hospital purposes.

Some governmental entities have negotiated “payments in lieu of taxes” from some nonprofit groups. Harvard University paid the City of Cambridge $2.2 million in 2008, as well as $5.2 million for water and sewer service.  Such arrangements are typically subject to “bartering” and many institutions enter into these agreements for the good will it creates within the communities in which they exist.

A boarding house for Congressmen lost its exempt status.

One institution that claims the tax-exempt status as a religious institution is a boarding house called the C Street Center that caters to conservative Christian lawmakers.  The $1.8 million townhouse came under scrutiny last year when three recent tenants; Senator John Ensign; Mark Sanford, the South Carolina governor and former congressman; and, former Representative Charles Pickering; seemingly disobeyed a least one of the Ten Commandments and had marital infidelity scandals.  Representative Pickering was accused by his estranged wife of entertaining a mistress at the C Street Center.

C Street Center lost most of its city tax exemption after District of Columbia officials decided it was a residence, not a church.  Now a coalition of mainline Christian ministers is demanding that the IRS end the center’s federal tax exemption.  This coalition is acting in self-interest.  The coalition is rightly concerned that the center is exploiting, and thereby threatening and cheapening, the constitutional protections guaranteed legitimate religious institutions.

On Wednesday, February 24, Zale Corporation released its financial statements for the quarter ended January 31, 2010.  We take a close look at these statements.

Some notable changes:

Revenues fell 14 percent.   The revenues for the quarter fell from $679 million for the quarter ending 1/31/2009 to $582 million for the quarter ending 1/31/2010, a reduction of revenues of $97 million.  Comparable same-store sales were down 11 percent.

Stockholders’ equity drops 29 percent.  The equity of the stockholders of the company fell from $459 million as of 1/31/2009 to $326 million as of 1/31/2010, a loss of $133 million of book equity.  The market value of the stock of the company has fallen by 60 percent since the beginning of the fiscal year, from $5.92 per share to $2.37 share as of 2/26/2010.

Cash and cash equivalents fell by 52 percent.  Cash balances fell from $68 million as of 1/31/2009 to $32 million as of 1/31/2010, a loss of $16 million.  Cash as a percentage of current liabilities fell from 20 percent to 10 percent, a 50 percent loss of available liquidity to pay current debt.

Merchandise inventories were reduced by 13 percent.   Inventories were slashed from $848 as of 1/31/2009 to $738 million as of 1/31/2010, resulting in $150 less millions in available stock.  Zales took the very unusual step of asking diamond merchants and other vendors to buy back old jewelry, including products they didn’t manufacture, in exchange for a pledge of future orders.  It is not known how many vendors complied with this unpalatable request.

Net property and equipment fell 27 percent.  The book value of net property and equipment fell from $271 million as of 1/31/2009 to $198 million as of 1/31/2010, a reduction of $73 million of the company’s fixed assets. 

This is a picture of a company being significantly contracted.  To preserve funds, Zale canceled much of the advertising it had planned for Valentine’s Day as well as Mother’s Day, said people close to the company. These are the two biggest jewelry sales holidays after Christmas.  Zales has not reported sales for February but market watchers expect a significant decline in revenues from the previous year.

Zales needs a white knight to save it.  Private-equity firm Centerbridge Partners LP has expressed an interest in Zales; as has Gordon Brothers Group, a Boston-based financial firm with a large liquidation business.  Some firms have recently signed confidentiality agreements in order to look at Zale’s books, according to people familiar with the company.  On Monday, February 22, 2010, it was reported that the private-equity firm Apollo Management submitted a proposal to buy a stake in Zales.  Apollo would bring in its own management team, headed by former Zale chief executive Robert DiNicola. The team would most likely include Pamela Romano, a former president of the Zale division.

See previous posts on Zales:

Who Killed Zales     http://www.johnbrianfastcpa.com/1376/who-killed-zales/

Tarnished Icon     http://www.johnbrianfastcpa.com/884/tarnished-icon/

No Gems Here    http://www.johnbrianfastcpa.com/623/no-gems-here-zales-financial-reporting-is-erroneous/

Some tips.

Your passwords are the keys you use to access your personal information that you have stored on your computer and in your online accounts.  You use them every day.  From a security perspective, do you have good passwords? 

Researchers have found that that about 20 percent of users pick passwords from a relatively small pool of 5,000 commonly used passwords.  Hackers can break into many accounts just by trying the most common passwords.

Because of the availability of fast computers and speedy networks, hackers can fire off thousands of password guesses per minute.  There are also hacker programs that will try every possible password until it finds yours.  Some Web sites try to thwart the attackers by freezing an account for a certain period of time if too many incorrect passwords are typed.  Experts say, however, that the crooks simply learn to game the system, by making guesses at an acceptable rate.  It is just a matter of how long it takes.

Like burglars, hackers will break into the easiest targets.  Making your passwords more complex may make it less likely you will be a victim.

Some Web sites force users to mix letters, numbers and even symbols in their passwords.  The more complex the password, the longer it takes to crack it.  Other sites, like Twitter, prevent people from picking common passwords.  There are sites that require you to change your password every thirty or forty-five days.

Experts offer the following advice in creating strong passwords:

Make it lengthy, the longer the better.  Each character that you add to your password increases the protection that it provides many times over. Your passwords should be 8 or more characters in length; 14 characters or longer is ideal.

Combine letters, numbers, and symbols.  The greater the variety of characters that you have in your password, the harder it is to guess.  Use the full keyboard.  Your password will be much stronger if you choose from all the symbols on the keyboard, including punctuation marks, and, any symbols unique to your language (like umlauts.)

Use words and phrases that are easy for you to remember, but difficult for others to guess.  Hackers are not generally likely to know your exact birth date.  Mixing those numbers with your favorite quotes or sayings can be effective and still be easy to remember.

In the perfect secure world, a user would have a different complex password for every Web site she or he visits and store each password only in his or her head.  However, unless you are the Rainmaker or only visit one or two sites, this is not an easily doable practice.  Most of us are simply overwhelmed by the sheer number of passwords we have to remember in this networked age.  Voice mail user IDs, ATM pin numbers, Internet passwords, and office security codes drown us in a flood of character requirements.

Yes, they did have geeks in 1984.

One of the worst things you can do is to keep a list of your passwords on your computer.  If a hacker breaks into your computer they can search for password files.  Keeping a manual list on paper may sound old school, but it is safer.  Do not keep this written list where others can find it and do not let the location be known.  The movie “War Games,” which was made in the 1980’s, allowed the Mathew Broderick character to break into his school’s computer and change his grades because he knew where the school administrator kept her written record of her password.

Sovereign debt.

Should the Greek flag be flown upside down as a symbol of distress?

What are currency swaps and what role did they play in Greece’s deteriorating financial condition? European Union investigators have decided to ask Greece for more details on currency swaps it may have used to defer debt repayments.  Have currency swaps been used to hide debts?  There is a suspicion that Greece, Spain, and Portugal have huge long-term lurking liabilities that are not disclosed in their financial reports.

Remember Goldman Sachs?  The US government bailed them out with 12.9 billion dollars because of their exposure to the credit default swaps market.  Sachs created 5 billion euros of currency swaps at off-market rates to let Greece borrow money without recording it as part of its public liabilities.  These currency swaps have not been accounted for as a loan on the books of the national Greek government.  The main incentive to Greece is that the transaction is accounted for in a different way.  The transaction allows Greece to report a lower amount of national debt on the national.

A senior executive at Goldman Sachs Group defended the controversial debt swap.  Gerald Corrigan, the former president and chief executive of the Federal Reserve Bank of New York and who is now one of Goldman’s managing directors, said that after reviewing the issue over the past few days, “it is clear to me that there is nothing inappropriate and it was in conformity with existing rules and procedures” at that time.  He said the securities did produce a “rather small, but not insignificant” reduction in Greece’s ratio of debt to gross domestic product in 2000 and 2001. He noted that European Union debt-reporting rules were modified in 2007, which could suggest that the prior policies may have been “too liberal.”

What bonuses were earned on the Greek deals?

Goldman initially set up the series of “currency swap” trades for Greece to enable the country to use favorable exchange rates to record some of its debts. By 2001, when those rates had become unattractive, Goldman helped Greece structure a different trade that enabled the government to continue using advantageous rates for accounting purposes. That second controversial deal is what helped mask the true level of Greece’s indebtedness.  Goldman has said the deals let Greece lower its foreign denominated debt in euro terms by €2.37 billion ($3.22 billion) and decreased Greece’s debt as a percentage of gross domestic product to 103.7% from 105.3%.

The brokering of the deal may have been inappropriate.  The architect of the transactions is a top executive in Sach’s London office, 46-year-old Antigone Loudiadis.  She became a Goldman partner in 2000 and was eventually named co-head of the company’s investment-banking group in Europe. She makes $12 million in annual compensation and lives an exclusive neighborhood in West London.

Selling derivatives, complex products based on underlying securities like bonds, Ms. Loudiadis was promoted to run derivatives marketing in London and, later, the entire sales force that pitched securities to clients around Europe.  Ms. Loudiadis, fluent in Greek, had good contacts in Athens and was soon able to leverage them into some profitable trades for Goldman.

Ms. Loudiadis helped Greece structure the transactions that enabled the government to continue using advantageous rates for accounting purposes. Goldman pocketed as much as $300 million for the latest deal.

Some inside Goldman Sachs are reported to think that the potential downside risk to Goldman in the currency swaps deals is too great.  Other European nations may have to bail out Greece.  Hopefully U.S. taxpayers will not have to make a second bail out of  Sachs.