The Disney – Lucasfilm Merger and its Lessons for Financial Planning

By The Sizemore Letter

Lucas and his team of financial advisors

Charles Sizemore gave his thoughts to the Wall Steet Journal’s Quentin Fottrell on George Lucas’ decision to sell his Star Wars film empire to Disney ($DIS) for  $4.05 billion in cash and stock and what its implications are for financial and estate planning:

By cashing out now, experts say the filmmaker spared his family the need to pick up the pieces of his empire after he’s gone. It also allows him to focus his remaining years on his charitable endeavors – particularly Edutopia and the George Lucas Educational Foundation, which he founded in 1991. “I am dedicating the majority of my wealth to improving education,” Lucas wrote in 2010 (pdf) on GivingPledge.com , which invites the world’s wealthiest people to commit most of their money to philanthropy.

Since none of Lucas’s three adopted children plan to take over his film empire, financial advisers say the strategy will save his heirs the the responsibility of managing their inheritance – and potentially going through the often long and fraught process of dividing it…

Of course, Lucas is far wealthier than the average American business owner. “With smaller mom-and-pop businesses [this kind of planning] can be more complicated,” says Charles Sizemore, a financial adviser based in Dallas, Tx. The owner of a restaurant or a landscaping business probably won’t have the option of selling to a Fortune 500 company, he says. “They may have to bring on a junior partner or work out a royalty arrangement with a new buyer,” he says.

To read full article see “George Lucas Jedi Estate Planning

The post The Disney – Lucasfilm Merger and its Lessons for Financial Planning appeared first on Sizemore Insights.

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Stocks Overbought or Oversold? Where to Put Your Stops

By: Chris Vermeulen – www.TheGoldAndOilGuy.com

Its 1:00pm ET and volume is drying up.

We did see a nice pop this morning breaking some previous pivot highs from last week and volume looks strong. Long story short… stocks are overbought here very similar to the past two highs as seen in the chart below. The big question from here is what to do now? Well, I wanna see some bullish patterns and volume over the next 12-48 hours if we are going to be looking to get long for an intermediate rally that lasts several weeks taking the indexes to new highs.

Take a look at the 10 minute intraday chart of the past fiveOPEN trading sessions (Wed, Thurs, Fri, Wed, Today) as notice how choppy price has been…. It’s shaking traders up who do not know how to adjust their trading strategy during rising volatility and mixed market cycles. This is something I will be teaching in the near future using my own eSignal trading indicators and Signals as it has been CRUCIAL in the past 3 year to profit from and minimize losses.

SPY Index Trading - Custom eSignal Indicator

 

Daily Chart of my Cycles & Sentiment Indicator of the SPY:

eSignal Indicator Signals

Precious metals are not participating today and even gold stocks are trading lower… Seems people are really focused on pure risk on (equities) today.

Yesterday we saw utilities rally as fear worked its way into the market. Well today utilities (XLU) is trading lower. Interesting how the market move and why I love them so much…

Last week I mention how RIMM looked ready for a major breakout and rally. This week it has jumped over 12% which is exciting. The next to pop looks like KOL coal ETF.

 

One of my members sent an email asking for help and he could not have picked a better time to ask because the market is eating traders alive here…

———————————————–

MEMBERS QUESTION:

Hi Chris,
In the last week, with the chopping around, I’ve had the bad fortune of being short ES, and multiple times being stopped by a little spike, and then I am watching the market go lower without me.

Last Thursday, I put in a buy stop for 1392, and that got triggered during a spike down yesterday.  This afternoon (I live in Singapore), my sell stop of 1417 that had been set  last Thursday got hit, and I watch in frustration as ES dipped to 1412 without me.

This has been very frustrating and expensive – so I think I really need a tutorial/advice on setting proper stops.

It almost seems like someone can see my stops (set above or below what I measure to be resistance and support) and literally aims for them to take me out.

Some months ago, when this happened a lot, I stopped using stops completely.  Then got badly maimed by the Draghi and Bernanke bounces in September.

Hope this is something you can look at as an enhancement to your excellent service (and I would gladly pay for this).
———————————————–

MY RESPONSE:
Yes, stops are tough to figure out for sure. If you are getting shaken up as you stated then you are not setting your stops properly. Because of the leverage involved with futures most people put too tight of a stop at or just beyond recent pivot highs or lows… These levels are where the market makers TRY to get the price to reach on a regular basis so they end up with a huge position that is very profitable in most cased within hours. Unfortunately these positions should have been in your trading account and not in theirs.

The market moves on emotions and 95% of traders do not have a clearly documented step by step rule book to follow, which removes emotions allowing them to nail down a consistently profitable strategy and stick to it. While I already have rules for each type of trade setup use last week I took a course to help me fine tune what I have even more so I can pass along how I do things to you.  If you want to build your own documented system properly, then you really need to take Brian McAboy’s “Trading System Mastery” course. It’s a couple short manuals and 4 hours of VERY important step by step instructions on just how to document/create the perfect strategy for you.

Anyways, be sure to keep in mind that during overnight trading (After 4pm ET until 9:30am ET) is when most of your stops will trigger. That is when the market makers can walk the price up and down to these key levels and take your stops.

I focus on my stops only being active during regular trading hours to avoid most of this BS manipulation. While I am subject to price gaps using regular trading hour stops only, I know my risk and I know that an index is not going move more than 5% against me at the open in a worst case scenario. I manage my risk through position size and use wider stops thank most traders because I do not have all my money in ONE highly leveraged position.

I will put together an educational report on how, when and where you should place your stops along with how you can take advantage of it. It will take me a week or two to create but be on the lookout for it…

Learn More at www.TheGoldAndOilGuy.com

Chris Vermeulen

 

Czech central bank sees low rates ‘over longer horizon’

By Central Bank News
    The Czech National Bank (CNB), which earlier today cut its benchmark repo rate to a record low 0.05 percent, said it reduced the rate because inflation is expected to remain below the bank’s target through the second quarter of 2014 and it expects to keep rates at this level for a long time.
    In a statement, the CNB also cut its economic growth forecasts for next year and 2014.
    “The rates will remain at this level over a longer horizon until inflation pressures increase significantly,” the CNB said, adding five of its board members voted in favor of the rate cut while two members voted to keep interest rates unchanged.
    In the fourth quarter of 2013 consumer prices are forecast to rise by 2.3 percent, due to tax changes but monetary-policy relevant inflation “will be in the lower half of the tolerance band over the whole forecast horizon,” the bank said, adding:
    “The domestic economy is curbing inflation.”
    The CNB forecast the Czech economy to contract by 0.9 percent this year, due to weak external demand and subdued domestic demand. In 2013, when external demand is expected to improve, the central bank forecast a 0.2 percent rise in Gross Domestic Product, down from its previous 0.8 percent forecast, and the rise by 1.9 percent in 2014, down from its previous 2.5 percent forecast.
   The Czech Republic’s GDP contracted by an annual 1.0 percent in the second quarter while inflation rose to 3.4 percent in September. The CNB targets inflation of 2.0 percent.
 
    www.CentralBankNews.info

 
 

FSB adds BBVA, Standard Chartered to list of key banks

By Central Bank News

    The Financial Stability Board (FSB), which coordinates global financial regulation, has added Spain’s BBVA and UK-headquartered Standard Chartered banks to its list of global systemically important banks (G-SIBs) and removed Germany’s Commerzbank, the UK’s Lloyds Banking Group and Franco-Belgian Dexia from the list.
    The FSB’s latest list of globally important banks is based on data from end-2011 and now comprises 28 banks, down from last year’s list of 29 banks.  Lloyds and Commerzbank were removed from the list due to a “decline in their global systemic importance” while Dexia was taken off as its going through an orderly resolution process.
    Being labeled a systemically important bank or financial institution has consequences as regulators will not only impose stricter supervision but also higher capital charges than other financial institutions.
     The list for the first time divides banks into buckets of additional loss absorbency that is required by regulators. G-SIBs will be subject to resolution planning rules by end-2012 and the additional loss-absorbency requirements will be phased in by January 2016 and fully implanted by January 2019.
    Systemically important banks are defined as those institutions whose distress or disorderly failure would cause significant disruption to the global financial system and economic activity due to their size, complexity and interconnectedness.

    Figuring out how to wind down and untangle these large institutions has been a focal point of efforts to avoid a repeat of the 2008 financial crises when there was little choice other than to rescue banks to avoid a total meltdown of the financial system.
    But these costly bank rescues have lead to an explosion in government deficits and debt, rattled sovereign credit ratings and limited their ability to provide further stimulus and aid economic recovery.
    To solve this ‘too-big-to-fail’ problem, officials have been preparing resolution strategies and arming themselves with the legal power that would allow them wind up complex conglomerates so economies aren’t plunged into recession, financial systems are crippled or taxpayers saddled with losses.
    Global coordination of such resolution plans is also critical so regulators know who is responsible for which parts of global conglomerates and are prepared to cooperate during a crises.
    In addition to its updated list, the FSB also released a report on the steps that countries have taken to reform their recovery and resolutions regimes, with the FSB reporting encouraging progress.
     “Cross-border crisis management groups are now established for nearly all the G-SIFIs designated by the FSB in November 2011 and have initiated discussions on high-level resolution strategies,” FSB said.
    A separate report on the supervision of SIFIs finds that further steps are needed to make supervision more proactive and effective, including the evaluation of the risk culture and the effectiveness of management and boards of financial institutions.
    FSB was set up to monitor and help implement many of the standards that were agreed by global leaders in the wake of the crises. One of the lessons was that unless ambitious global banking standards are strictly enforced and backed by national laws, they are of little practical use when a crises strikes.
    In addition to banks, some insurance companies have also been identified as systemically important and the International Association of Insurance Supervisors plans to reveal its list of Global Systemically Important Insurers (G-SIIs) in April 2013.
    A final list of systemically important financial institutions (G-SIFIs) will also be released next year that will include important non-bank and non-insurance institutions, probably payment and settlement systems, and clearing houses
    The list of 28 global systemically important banks is divided into five buckets but the FSB did not place any banks in Bucket 5. In that bucket, supervisors would impose at 3.5 percent additional equity loss absorbency as a percentage of risk-weighted assets.
    The banks in bucket 4, from which supervisors will require an additional 2.5 percent loss absorbency include (in alphabetical order): Citigroup, Deutsche Bank,  HSBC and JP Morgan Chase.
    Bucket 3, which requires a 2.0 percent additional loss absorbency, comprises Barclays and BNP Paribas.
    Bucket 2, which requires a 1.5 percent additional loss absorbency, consists of  Bank of America, , Bank of New York Mellon, Credit Suisse, Goldman Sachs, Mitsubishi UFJ FG,  Morgan Stanley, Royal Bank of Scotland and UBS.
    Bucket 4, which requires a 1.0 percent additional loss absorbency, includes Bank of China, BBVA, Groupe BPCE, Group Credit Agricole, ING Bank, , Mizuho FG, Nordea,
Santander,  Societe Generale, Standard Chartered, State Street, Sumitomo Mitsui FG,
Unicredit Group and Wells Fargo.

Dollar Strengthens on Europe and US PMI Data

By TraderVox.com

Trader.com (Dublin) – The US dollar rose against the euro for the first time in three days as the demand for safety was boosted by the poor manufacturing data from Sweden and Norway. The market is seeking safety as speculation debt crisis in Europe is dampening economic growth in the region grew. The greenback strengthened against most of its peers as economists predict that the manufacturing PMI report to be released later today will indicate that the manufacturing sector slowed last month. The yen dropped against the dollar prior to the release of October meeting minutes where the BOJ decided to add 11 trillion yen to its bond-purchases program.

According to Steven Barrow, the head of research in London at Standard Bank Plc, there is a slight bias towards a firmer dollar, which is supported by the growth concerns in Europe. The strong dollar is also supported by speculation that Hurricane Sandy may cost the GDP up to $50 billion, increasing demand for safety.  According to some manufacturing data from eurozone, the Norwegian manufacturing shrunk in October, making the fifth month in a row that the sector have shrunk. The gauge dropped from 49.1 in September to 48.7 last month according to Fokus Bank in Oslo. The Swedish manufacturing PMI gauge dropped to 43.1 according to Swedbank AB in Stockholm, from 44.7 in September.

The dollar has strengthened as Federal Reserve Bank of Minneapolis President Narayana Kocherlakota  said yesterday that he disagreed with the view that Federal Reserve monetary policy is too accommodative. The Fed decided last week to continue buying $40 billion in mortgage-backed securities as it aims to curbing unemployment in the region. The greenback strengthened by 0.2 percent against the euro to $1.2937 at the start of trading in London today after it dropped by 0.4 percent in the previous two days. It gained by 0.3 percent against the yen to exchange at 80 per dollar. The euro strengthened by 0.9 percent last month, making it the best performer after the Swiss franc. The yen dropped by 2.3 percent while the US dollar rose by 0.2 percent in the same period.

Disclaimer
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Uganda cuts rate again, says now close to inflation target

By Central Bank News
    The central bank of Uganda again cut its central bank rate (CBR), this time by a “modest” 50 basis points to 12.5 percent, but indicated that it may soon halt its aggressive rate-cutting campaign.
     The Bank of Uganda (BoU), which has cut its policy rate eight times this year for a total reduction of 1,050 basis points, said core inflation was now forecast to stabilize around the bank’s 5.0 percent target over the next three quarters.
    “I believe that with this reduction, the CBR is now approaching the level which is consistent with the medium-term inflation target of 5.0 percent,” the bank’s governor,  Emmanuel Tumusiime-Mutebile, said in a statement.
    Economists had expected the BoU to cut its rates following news that headline inflation fell to 4.5 percent in October from September’s 5.5 percent. Core inflation eased to 4.0 percent from September’s 4.9 percent.
    “These reductions in inflation have re-inforced the BoU’s confidence that core inflation will stabilize at around the medium-term target of 5.0 percent through the middle of next year,” the bank said.

    Uganda’s Gross Domestic Product is forecast to increase by 5.0 percent in 2012/13, up from 3.4 percent last year, but remain below the economy’s potential of 6.5-7.0 percent, the bank said.
    “The main constraints to a faster recovery in the short term are the weak domestic demand and the risks and uncertainties in the global economy, it added.
    Following its rate cuts, the bank said there were signs that commercial banks were starting to lend more, saying the lack of a stronger recovery was partly to due a “lethargic adjustment” in banks’ lending rates, adding that it was concerned that interest rates spreads had recently increased.
    Uganda’s GDP contracted by an annual 0.2 percent in the second quarter after a 2.0 percent rise in the first quarter.

    www.CentralBankNews.info

   

Gold & Silver Rise as China’s Long-Term Demand Forecast to Keep Growing

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 1 Nov, 09:00 EST

WHOLESALE PRICES to buy gold rose to 7-session highs in London on Thursday morning, touching $1726 per ounce even as new data showed US employment rising at its fastest pace since February.

The private-sector ADP payrolls report said the US added 158,000 jobs in October. Earlier data from the manufacturing sector in China, the world’s #2 gold consumer, showed its slowdown to be easing.

However, “Over 17% of survey respondents reported a fall in the volume of new export orders,” said the new Purchasing Managing Index report from HSBC/Markit Economics, “and just under 10% noted an increase.”

Two-thirds of Chinese businesses reporting quarterly results to the stock market have seen a sharp rise in unpaid bills according to the Financial Times.

The People’s Bank of China has this week pumped a record $60 billion-worth of liquidity into its domestic money market.

“Gold has been finding support on approach of $1700,” says today’s note from Standard Bank’s commodities team.

“Our Standard Bank Gold Physical Flow index has risen substantially in the past few days,” says Standard, with demand to buy gold in Asia and India “pick[ing] up.”

Looking further ahead, and “supported by the continual income growth of [China’s] emerging middle-income class, investment as well as gold products will benefit,” says Albert Cheng, managing director for the Far East at market-development organization the World Gold Council.

“The longer-term growth of China’s economy remains healthy.”

The state-owned research group Antaike meantime forecasts that China’s demand to buy silver will grow by 10% in 2013 to hit new record levels.

Alongside a large forecast for silver investment demand, the solar-panel industry is flagged as a key driver.

Back in Thursday’s action, major-economy government bond prices slipped, nudging interest rates higher as Italian and Spanish bond prices rose, reducing their interest rate.

Silver extended what one analyst called Wednesday’s “impressive advance” by reaching 2-week highs above $32.65 per ounce.

“We look for [gold price] support in the $1660 area,” says a note from Barclays Capital, “to underpin a move higher toward the $1800 highs.”

“Historically gold performs strongly in November,” says a note from Commerzbank, “with monthly returns over the past 30/40 years around 1.40% – the second strongest month of the year.”

Slipping 3.2% from the end of September, prices to buy gold just put in their first monthly drop since May and their worst October since 2008’s plunge of 17.4%.

Commodities overall also delivered their worst monthly returns since May, losing 4.1% in October on the S&P index of 24 natural resources and unwinding the last of 2012’s gain to date.

Global stock markets lost 0.6%, says Bloomberg. Bonds of all kinds gave a positive return.

Silver prices lost 7.1% against the US Dollar. But while last month’s sales of silver Eagles by the US Mint slipped 3.1% from September, they hit a new October record at 3.15 million ounces.

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

 

Central Bank News Link List – Nov 1, 2012: Marcus says investors can’t assume S.Africa rate cuts

By Central Bank News
Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

Zambia raises policy rate 25 bps to 9.25% to cub inflation

By Central Bank News
    The central bank of Zambia raised its policy rate by 25 basis points to 9.25 percent to rein in  inflationary pressures that threaten to push inflation above the bank’s year-end target of 7.0 percent.
    The Bank of Zambia said the upward pressure on inflation in November was coming from feed prices that may contribute to higher meat prices and a global grain deficit that may lead to higher domestic and imported grain prices.
    However, the bank’s Monetary Policy Committee had also noted some downward risks to inflation from stable vegetable and fish prices due to seasonal supply.
    “The Committee weighed the risks and was of the opinion that inflationary pressures during the policy-relevant period may pose a threat to end-year inflation target of 7.0 percent,” the bank said in a statement, adding that containing short-term inflation is critical to achieving lower interest rates in the medium and long term.
    The latest inflation date from Zambia’s statistics office are from July, when annual inflation eased to 6.2 percent from June’s 6.7 percent.

    www.CentralBankNews.info

Czech Republic cuts rate 20 bps to record low of 0.05%

By Central Bank News
    The central bank of the Czech Republic cut its benchmark two-week repo rate by 20 basis points to a  record low of 0.05 percent.
    The board of the Czech National Bank (CNB) also cut the Lombard rate, the ceiling for short-term money market rates that is used to provide overnight liquidity to banks, by 50 basis points to 0.25 percent. The discount rate, the floor for short-term money market rates that is used for overnight deposits at the central bank, was cut by 5 basis points to 0.05 percent.
    The CNB will issue a statement later to explain its rate decision. Many economists had expected the CNB to cut its rate further.
    The CNB had already cut the repo rate twice this year for a total reduction of 50 basis points. The latest cut brings this year’s rate reduction in the repo rate to 70 basis points.
    The Czech Republic’s Gross Domestic Product contracted by 0.2 percent in the second quarter from the first quarter, after 0.8 percent quarterly drop, for an annual decline of 1.0 percent.
    The inflation rate ticked up to 3.4 percent in September from 3.3 percent in August. The CNB targets inflation of 2.0 percent.
 
    www.CentralBankNews.info