August 2011 Archives

When a portion of your portfolio is diversified into commodities on days like today there should be no need to panic. Crude traded to a nine month low today dragging prices very close the $80/barrel mark. It's been painful but we highly doubt a 20% reduction is justified. The pundits say it is demand destruction but the reality is investors are raising cash, covering margins and the baby is getting thrown out with the bath water. Crude, the distillates and natural gas are a buy in my opinion. It has been a tough trade but scale in as we expect a sharp correction very soon. I cannot stress enough this is my opinion, do your own homework and if you disagree that is fine...that is what makes a market. We feel oil could see $95 before it sees $75. Natural gas remains over sold but at these price points it may be one of the best buys in commodities...again my opinion.

Our suggestion is to gain bullish exposure in October contracts. Black swan, white sheep, pink flamingo call it what you want the Credit downgrade by S&P has the stock market on its heels . We should see a bounce at some point but I am hearing whispers of 2008 revisited so maybe a better trade is the sidelines as opposed to picking a bottom. Some aggressive clients have light exposure in September ES puts but need serious help. FYI a 50% Fibonacci retracement lifts September back to 1230/1235 so anything is possible. Gold gained 4% today trading ever closer to $1800/ounce. It makes me nervous when gold outpaces silver by a ratio of nearly 2:1. We have no exposure and still think a correction is due but I am besides myself missing this move for clients. To me though being on the sidelines in gold is far better than being in the stock market...it could be worse.

The commodity currencies were hit the hardest today with the Aussie lower by 2.6%, the Kiwi giving up 2.6% and the Loonie down by 1.4%. We would book profits in all shorts in the aforementioned crosses and have advised clients to start scaling into longs in the Loonie. The suggestion is to get long here at five month lows just looking for a bounce to 1.0300. Sugar traded below the 50 day MA today for the first time in three months. We may get a rally that we would look to sell for clients...trade accordingly. Most of our clients took their shorts off in recent sessions. OJ gave up another 5% today making it nearly 15% in the last five sessions. Clients with bearish positions were advised to book profits on their shorts. We've yet to make a move but lumber is on or radar as a potential buy with prices down 20% in the last month...stay tuned.

A new high in Treasuries as investors would rather get a minute yield than lose money...how long will this continue is anyone's guess. Avoid bearish plays until the circumstances change. This could happen on some sort of global intervention of verbiage from the FOMC tomorrow...stay tuned. Corn gave up 2.5%, soybeans 1.8% and wheat the biggest loser at 3.7%. All three may trade lower but being were holding around the 200 day MA we've advised aggressive clients to start scaling into November soybeans. Our suggestion was to purchase $1 bull call spreads. Lean hogs lost 1.7% today closing back under the 20 day MA. On a further break tomorrow we will be looking to offset clients shorts at a profit. We would likely look for an exit door in October closer to 88/88.50.

Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Matthew Bradbard
MB Wealth Corp.
(954) 929-9898
matt@mbwealth.com
www.MBwealth.com

* Trading in commodity futures and options involves substantial risk of loss. Past performance is not indicative of future results.

Before August 2009, some expatriates used bank accounts in countries that had banking secrecy laws, the most well-known was Switzerland. However, at the end of August of that year, Switzerland signed an information release agreement that crumbled one of the stoutest legs of international banking sovereignty principles upon which many expats relied. Since that benchmark agreement was signed, other countries have followed suit, often with US government promises of import tax credits and trade agreements as the carrots offered.

For expat employees of US-based businesses and the government itself, that agreement and others like it didn't have tremendous impact if one was playing by the rules to begin with and not attempting to hide income illegally. The legal income was reported through the employer's records and statements.

For the self-employed expat, however, the Switzerland agreement and others, such as the Panama agreement, the dissolution of banking privacy guarantees have created quite a quandary for those who use international banking for possibly illegal activity. However, if you live abroad and are self-employed, don't automatically assume you have to head for the hills.

However, you should know that if you have a foreign account not declared to the IRS, and they discover it, you can and will be fined up to 50 percent of the account's balance--for each year the account has not been declared.

All expats know or should already know of IRS Form 2555 regarding income exclusion and its income limitation. However, your social security taxes could be effected as well as your income taxes by your expat status.

In the US, most if not all the states require payment of income tax if you reside in the state and if you work in the state. Those who work in one state but live in another often pay overlapping state taxes on the single income source. For expatriates, whether self-employed or not, a similar situation could happen regarding social security taxes.

If you live in a foreign country that has a domestic social security plan (SSP), you might gain an exemption from US social security taxes if 1. that country is included on the exemption list with the US government and 2. you pay those social security taxes. You should note, though, that your eventual US social security retirement income will not reflect the amounts you paid to a foreign government. Likewise, if your income is exempt from the foreign plan, and you don't pay into the local system, you will not receive their retirement benefits from that country.

Called Totalization Agreements, these mutual-exemptions avoid that dual payment scenario, but if you are employed by a business and work in a foreign country which grants exemption from local SSP payment, you should have your employer obtain a certificate of compliance from the International Programs of the Social Security Administration. Without that certificate, your employer must withhold from your paycheck the dual-country taxes, not just the US taxes.

If you work in a country that has a Totalization Agreement, and you are required to pay into the foreign country's plan, you can still avoid duplicate SSP taxation by obtaining a statement from the foreign government verifying your pay is subjected to taxation in the local plan.

If for some reason, you can't get this statement, contact the same US government office and obtain a declaration from the US government confirming your wages are not covered by the US Social Security system. It's highly recommended that you secure the original document you receive, if self-employed, in a US bank's safety deposit box and keep only a copy with you where you live and work.

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BCN International Bank (Cayman) Ltd leads the Offshore Banking industry with strategic move to iPhone

Setting new standards in enterprise mobility, BCN International Bank today confirmed that it has adopted the iPhone as its Smartphone of choice, one of the first and biggest corporate entities in the offshore banking industry to do so on such a large scale.

The Bank expects to complete the device rollout by August 2011. It currently provides mobile devices to over 3400 employees and this number is expected to grow to around 7,000 by the end of the year. Dispersed across borders and typically on the move, these employees will reap significant benefits from the blended work-life capabilities of the iPhone.

"We're all about moving forward," said Ben Benglo, Group Head of Technology and Operations for BCN International Bank "and we believe that giving people complete mobile access to the systems they need to do their job will dramatically increase productivity and employee satisfaction. Time is a commodity in our business. To remain responsive to our customers, we have to be able to connect to the office wherever we are, at any given time."

The Bank will address the dearth in robust enterprise apps available today with a strategy for developing its own internal apps. In the near future, BCN International Bank staff can look forward to apps that allow them to collaborate online and organise their work on-the-go. The Bank is also testing customer relationship management (CRM) apps that enable staff to better serve customers in real-time. The Bank has already put in place additional authentication measures for its iPhones, so that each device complies with stringent security policies.

Investing for growth

BCN International Bank plans to continually expand its apps portfolio will accelerate the pace of innovation at the Bank.

At the 14th Annual Grand Cayman Peak Awards last month, BCN International Bank won the People's Voice Award for Integrated Mobile Experience, the first offshore bank to win in this category. The winning entry was Huddle, an application that uses real-time messaging to make conferences more interactive and engaging.

The Bank also recently launched an iPhone app that takes a fresh and unique approach to mobile banking. Designed entirely from the mobile customer's perspective, the app marries an uncluttered, user-friendly interface with a robust set of features - a strategy that seems to have worked, with the app registering over 7,000 downloads within a few weeks.

With these investments, BCN International Bank is well positioned to create even more exciting opportunities for its community. "Ultimately, it's about creating a more rewarding and satisfying experience for our staff and customers," said Greg an IT Consultant with. BCN International Bank

BCN International Bank has different Priorities. Introducing a new way of banking that puts priority on what's important to you. Through the perfect blend of exceptional services, unique benefits and expert solutions tailored to help you achieve them.

Every entrepreneur looking to start up a forex brokerage should first decide the jurisdiction in which the headquarters of the business will be based before proceeding with other issues. This involves a lot of prepatory work and is one of the crucial decisions that a forex startup needs to take, since it also has a big impact on the cost structure of the firm.

The regulatory authority could be an EU member state, or one of the offshore jurisdictions such as BVI or Cayman Islands. Cyprus has taken the lead among EU member states for being the market leader in attracting applications for setting up forex brokerages because it was the first country to regulate the forex industry. Strange that it may seem, many jurisdictions have not regulated the forex brokerages. The fact that Cyprus moved first to regulate the industry has been very beneficial, since during the last couple of years, Cyprus has managed to attract well above 50 foreign firms to apply and secure regulatory license and base their operations from the east Mediterranean nation.

The majority of the forex applications to Cyprus are made by Israel and Russian citizens.

There are many firms who help in the licensing process with the fee scale ranging from EUR 12.000 to EUR 25.000 depending on who is the consultant. The regulator is the Cyprus Securities & Exchange Commission (CySEC) which usually gives its answer within 4 months.

Once the license is granted, the investment firm will need to hire licensed persons to head each and every department for which a license application has been made. For investment firms that wish to hold client funds, the minimum capital is EUR 200.000.

Based on first hand experience, the annual costs of a Cyprus Investment Firm licensed to trade in forex amounts to a minimum of EUR 350.000 and can increase to EUR 1 mln depending on the number of staff and the services the firm intends to offer.

On the other hand, those who apply for a regulated license from an offshore jurisdiction like BVI or Cayman Islands will also need to pay between $20.000 to $50.000 to secure the license, but the annual operating expenses are substantially lower.

The big difference between an EU and offshore jurisdiction is that while the EU obliges the investment firm to employ licensed persons for every department for which it has secured licensing and is being offered, an offshore jurisdiction has no such requirement, meaning that one person can effectively run the business.

And since all investment firms can white label the electronic trading platforms from other established firms, which essentially means the trading is all automated, then one may argue why the need to become regulated in the EU and not outside.

Here arises the next question of where you intend to be active? If as a forex brokerage you plan to operate within the boundaries of the EU, then it's obvious that you need to have a license from one of the EU27, otherwise you will be breaking securities laws.

But if you wish to operate in countries where there are no strict regulations and you think you can get away with this, then by all means, an offshore jurisdiction has lower operating and maintenance costs.

The decision obviously will have a significant impact on areas of operation and the cost structure of the forex brokerage.

Source: http://www.eurivex.com