Sunday, March 18, 2012

Options News and Commentary from Forbes

Options News and Commentary

Today’s tickers: LULU, ELN & POT
Bank takes heat from ex-employee; iPad 3 goes on sale Friday.
As is noted here, IRS Still Fighting Conservation Tax Breaks, the IRS doesn’t much like conservation easements. A conservation easement is a legal right to enforce the preservation of the land. Isn’t that a good thing?
Futures on the Dow Jones Industrial Average (DJIA) are pointing toward a flat open this morning, as Wall Street digests yesterday's surge to fresh multi-year highs. Not only did the Dow eclipse 13,000, but the Nasdaq Composite finished north of 3,000 for the first time in 11 years. Heading into the open, futures on the DJIA are hovering about 3 points above fair value, while Nasdaq and S&P 500 Index (SPX) futures are virtually flat with fair value.
Stress test results due Thursday.
Futures on the Dow Jones Industrial Average (DJIA) are indicating a potential gain of about 70 points on the open this morning, as Wall Street digests February retail sales data ahead of a monetary policy decision from the Federal Open Market Committee (FOMC).  Sales rose 1.1% to a five-month high in February, according to the Commerce Department, while January sales were revised higher to a gain of 0.6%.  Excluding autos, February sales rose 0.9%.

Youku gets together with Tudou and the group comes alive.
Private banks are struggling to come up with reasons why the wealthy should flock to them for money management services. Their fee-laden proprietary investment products never have been competitive, generally underperforming by a few percentage points in bull markets. These tony institutions nevertheless maintained reputations far beyond their capabilities for decades by stroking client egos in their hallowed marble hallways.  When private bank investment funds plummeted further than the market in 2008, clients were finally shaken out of their complacency. The private banking industry is reeling today; weaker institutions are being shuttered and even the largest firms are downsizing. If you enjoy quiet and solitude, take a walk down Royal Palm Way in Palm Beach – where most of the private bankers have (or had) their offices. 
The Dow Jones Industrial Average (DJIA) is headed toward a weak start this Monday morning, as Wall Street digests weak Chinese economic data released over the weekend. Additionally, Greece will be back in the headlines again today, as a Euro-zone meeting is slated for later this morning to work on finalizing the country's debt swap and bailout funds.
Many Americans have voiced contempt for FATCA---the Foreign Account Tax Compliance Act.  So have international and foreign banking institutions.  See FATCA Carries Fat Price Tag. More vocal than any other group are American Expats Calling For FATCA Repeal.
Billionaire Warren Stephens explains how his firm keeps an even keel.
We Americans do like to tinker with our tax laws. Last year, I reported on a bill t0 provide tax breaks for facial hair aptly named the STACHE Act: the Stimulus To Allow Critical Hair Expenses. See Would Mustache Tax Be Better Than 9-9-9? Professor John Yeutter and the American Mustache Institute proposed it, and this story won't die.
New single-serve machine could spell trouble for the K-Cup.
No one wants to be noticed by the IRS, much less audited. While it might be nice to have your peers or former high school classmates look upon you as someone who made it big time, do you want the IRS to think you're a big shot? Look what happened to Leona Helmsley after she uttered her now immortal words: “Only the little people pay taxes.”
Economists expect U.S. payrolls added 220,000 jobs in February.
The Dow Jones Industrial Average (DJIA) could be headed toward a 100-point gain on the open this morning, as Wall Street cheers developments in the Greek sovereign-debt debacle. Specifically, reports surfaced late yesterday that private investors holding around 60% of Greece's swappable bonds have indicated they will take part in the current restructuring efforts. Official results of the swap will be released Friday morning. Futures are rallying on the news, with S&P 500 Index (SPX) and Nasdaq Mini futures trading 12 points and 18 points above fair value, respectively.
Will the IRS pay for your hobby? Not usually. But sometimes yes if you can make it enough of a real business. Kurt Strode should have known this. See Strode v. Commissioner. A California attorney, Stode had salary income and tried to offset it by deducting $75,000 a year of expenses from his "international consulting" side business. One problem: In six years, he hadn’t made a nickel in international consulting.
Microsoft and Chevron are examples of cheap stocks.
Wall Street is set to reclaim some of Tuesday's losses this morning, as stock futures are trading sharply higher following strong employment data from ADP. Specifically, private-sector payrolls rose by 216,000 in February, while January's gain was revised higher to 173,000 from 170,000. The ADP report is seen as a precursor to Friday's nonfarm payrolls report, where economists are expecting to see February employment rise by 213,000 jobs. The unemployment rate is seen holding firm at 8.3%.
Stocks stumbling as debt swap comes down to the wire.
Selling pressure is heavy on Wall Street this morning, with futures on the Dow Jones Industrial Average (DJIA) pointing toward an opening gap lower of nearly 100 points. Global economic growth concerns are plaguing investors this week, after a series of weak economic reports and China lowering its growth forecast on Monday. The Street is also eyeing an important Greek bond swap, the outcome of which could have global ramifications. Against this backdrop, futures on the S&P 500 Index (SPX) and the Nasdaq Mini are trading 10 points and 20 points below fair value.
The news release that BP reached a $7.8 billion settlement over its Deepwater Horizon oil spill could mean cash for many victims soon. It’s good news for BP too, although BP must still deal with probable government fines. See BP Spill Saga Far From Over. BP can deduct compensation paid to victims but may have a hard time deducting government fines.
Here at the Small Business Authority, we are experts in all areas relating to small business. We have been in business for over thirteen years, servicing over 100,000 business accounts in all 50 states. The Small Business Authority brand has been established to provide real-time, state of the art content, and business services to become the destination for small-business owners all across the United States.
Warnings of slower growth in China are providing a bit of fuel for Wall Street bears this morning, sending futures lower heading into the open. Specifically, Chinese Premier Wen Jiabao lowered the country's growth forecast from 8% to 7.5% for the year. As a result, futures on the Dow Jones Industrial Average (DJIA) are indicating an opening loss of about 15 points. Furthermore, S&P 500 Index (SPX) futures are trading about 2.5 points below fair value, while Nasdaq Mini futures are 1.5 points below fair value.
A "bargain sale" usually means a tax deduction. You sell on the cheap to a charity, and what you don't get in sales price you get in a charitable contribution deduction. That's the theory, and often it works just fine, subject to the inevitable technical details.
It’s been said that crime does not pay and that cheaters never prosper.  Neither of these statements is true and you should not be dissuaded from a life of theft by such homilies. History is replete with examples of people who have done very well for themselves by stealing from others. Vast personal fortunes have been amassed using illegal, ahem, business practices. Call them “robber barons” or aggressive capitalists, many were criminals. Furthermore, since financial crimes involving the greatest sums of money are rarely reported (for reasons we’ll get to later) crime pays far better than historical accounts would suggest.
Taxes are complicated, but some rules are simple. Respect these three rules, and you'll reduce the chance of coming to grief with the IRS.

No comments: