Estate Planning Blog

Friday, May 18, 2012

Today's Headlines: Facebook’s Big Day, HP Considering Cutting Workforce & Much More

At the Law Firm of Kavesh, Minor & Otis, we specialize in the area of estate planning and can assist those in the greater Los Angeles and Orange County areas of California with all of their estate planning needs—from basic estate planning to advanced-level and estate tax planning. Additionally, we have an affiliated financial advising firm that has serviced many of our clients and works with us to help coordinate both the estate planning that we’re doing with our clients and the investment and financial planning that they do. Today’s headlines are brought to you by our affiliated financial advisors. To find out more about our services and our affiliated financial advising firm, including setting up a free consultation with us or one of our affiliated advisors, please contact us or attend one of our upcoming free educational seminars.

US FINANCIAL MARKET

The social network goes public. It's Facebook's big day.

Verizon data fans to pay a lot more, either in service fees or smartphone prices, as it tries to cut costs and boost revenue from data services.

AT&T is hoping to help its margins by lowering smartphone subsidies as it tries to control costs.

Hewlett-Packard is considering cutting its workforce by 8 to 10 percent, or a minimum of 25,000 jobs, sources familiar with the matter told Reuters.

US ECONOMY & POLITICS

The United States imposed punitive tariffs on solar panel imports from China. "The U.S. decision lacks fairness and China expresses its strong displeasure", a spokesman for China's Ministry of Commerce, Shen Danyang, said in a statement.

EUROPE & WORLD

Europe thinks the unthinkable on Greece, contingency plans in case Greece bombs out of the euro zone.

Moody's downgrades 16 Spanish banks

The Spanish government has hired Goldman Sachs to value Bankia and advise the economy ministry after the bank was partly taken over by the state last week.

China's annual economic growth could slow to 7.5 percent in the second quarter, largely due to curbs on the property sector and headwinds from external demand.

Japan government ups economic outlook on consumption and exports.

As a company with over 30 years of experience in estate planning and servicing the communities in and around the Los Angeles and Orange Counties, The Law Firm of Kavesh, Minor & Otis and its affiliated financial advisors can assist you and your family in planning for your financial future. Contact us today to find out how you can get a free consultation with an attorney and/or one of our affiliated financial advisors.

This post is brought to you by the good folks at Kavesh, Minor & Otis, Inc. and our affiliated financial advisors, servicing those in the Los Angeles and Orange County areas of Southern California. You may attend a free seminar or schedule an attorney consultation. You can also contact us at 1-800-756-5596 for more information. We’d love to connect with you on Facebook, Twitter or LinkedIn.

Photo Credit: swebindex.com

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Thursday, May 17, 2012

Today's Headlines: Obama Wants Tough Rule on Banks After JPMorgan Chase Loss, Acura Recalls Over 50,000 TL Sedans & More

US FINANCIAL MARKET

Wal-Mart posted a better-than-expected quarterly profit.

Fred Green resigns as CEO of Canadian Pacific Railway. Green's detractors say CP has become North America's worst performing major railway under his leadership.

Honda’s Acura brand is recalling 56,881 TL sedans from model years 2007 and 2008 in North America to replace a power steering hose that could leak over time and potentially cause a fire.

Tiffany raised its dividend (10 percent) for the 11th time in 10 years.

Buffett is making another bet on the newspaper industry, with a deal to buy the majority of Media General for $142 million in cash.

Sears returns to profit in its 1Q. It plans to spin off big piece of Canada stake. Sears owns about 95 percent of Sears Canada and would still hold about 51 percent after the spinoff.

GM will build the next generation of its Astra compact in Britain, not in Germany, after a new labor deal.

Starbucks has made a series of management changes to accelerate global growth.

LG upgrades its smartphone speed, battery time to stay relevant in smartphone market.

US ECONOMY & POLITICS

Labor worries persist. Initial claims for state unemployment benefits held steady at 370,000, the Labor Department said. The four-week moving average of initial claims was 375k, down from a local peak of 384k in the last week of April.

A measure of future U.S. economic activity (The Conference Board Index) fell 0.1 percent (to 95.5 from 95.6) in April after six months of increases. The drop reflected weakness in housing and hiring.

The Philadelphia Fed index of general business activity within the factory sector fell to -5.8 in May from 8.5 in April. It was the first negative reading in eight months.

Average U.S. rates for 30-year and 15-year fixed mortgages fell to record lows for the third straight week. The 30-year loan is at 3.79 percent.

Minutes suggest the Fed will stay the course on policy, published on Wednesday. The Fed is affirming that it would continue its efforts to reduce borrowing costs for businesses and consumers.

Only four of the 17 Fed officials on the committee said that they expected the Fed to hold rates at the current level through 2014, down from six in January, when the Fed last published their projections.

Obama wants tough rules aimed at preventing banks from making bets with their own money after JPMorgan loss, The WSJ reported.

Geithner said debt ceiling hike doesn't have to be crisis. The United States is expected to reach the $16.4 trillion debt limit, or amount it is legally allowed to borrow, before the end of the year.

EUROPE & WORLD

Customers at nationalized Spanish bank Bankia have taken out more than 1 billion euros ($1.3 billion) over the past week in a sign of fast-fading confidence in the lender.

Iran's parliament on Thursday signed off on a $462 billion budget bill for the current Iranian year on oil price at $85 a barrel. It is about 9 percent less than the budget approved in the previous calendar year.

Bank of Tokyo-Mitsubishi, which handles most of Japan's payments for oil imports from Iran, said on Thursday it had frozen transactions with Iranian banks after being ordered to do so by the New York District Court earlier this month.

Japan’s GDP expanded 1.0 percent in January-March, shaking off the pain of a strong yen and Europe's debt crisis on solid consumer spending and rebuilding from last year's earthquake.

China's consumers are cooling towards discretionary spending, preferring to salt money into savings or education for their children, according to a Nielsen survey of Chinese consumer confidence published on Thursday.

Russian stock markets hit 8-month low as oil prices drop, Greek turmoil fears grow.

Photo Credit: Getty Images via money.cnn.com

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Wednesday, May 16, 2012

Today's Headlines: GM Pulls Facebook Advertising, Applications for Home Mortgages Surge, Oil Prices Fall to 6-Month Low in Asia & Much More

US FINANCIAL MARKET

Facebook increased the size of its IPO by almost 25 percent, and could raise as much as $16 billion as strong investor demand for a share trumps debate about its long-term potential to make money. It also raised the target price range to $34-$38 per share in response to strong demand.

Apple plans to use a larger screen on the next-generation iPhone and has begun to place orders for the new displays from suppliers in South Korea and Japan, people familiar with the situation said on Wednesday.

GE’s finance arm will resume paying a quarterly dividend to the parent company and make a special payout of $4.5 billion, paving the way for GE to increase its dividends and buybacks.

GM said that it will stop advertising on Facebook. It had decided Facebook's ads had little impact on consumers.

Berkshire Hathaway added new positions in GM and media conglomerate Viacom in the first quarter and cut its stake in Intel, Kraft and Procter & Gamble. It also boosted its investments in DirecTV, Liberty Media, DaVita, and the Bank of New York Mellon.

Boeing is on track to hit its production rate target for the 787 Dreamliner next year and is studying the possibility of raising that target.

Target's 1Q profits up 1.2 percent but sales rose 6 percent; outlook raised.

Deere’s fiscal 2Q profits up 17 percent on higher sales, raises profit forecast.

US ECONOMY & POLITICS

Housing starts increased 2.6 percent to an annual rate of 717,000 units. Although the monthly growth rate was below consensus expectations, the level of starts was higher than expected due to upward revisions to earlier months. Single-family starts rose by 2.3% in April and multi-family starts (apartment buildings and condos) rose by 3.2%.

In contrast to the modest increase in starts, building permits declined by 7.0% (month-over-month) in April. The decline was entirely due to a 21% drop in multi-family permits, which followed a 32% increase in multi-family permits in March.

Industrial production posted its fastest growth in over a year in April. Industrial output grew 1.1 percent. Manufacturing output rose 0.6 percent. Output for motor vehicles and parts rose 3.9 percent. Utilities output increased 4.5 percent.

Capacity utilization, a measure of how fully firms are using their resources, rose to 79.2 percent, the highest since April 2008.

Applications for U.S. home mortgages surged last week, driven by increased demand for refinancing as interest rates hit fresh lows, an industry group said on Wednesday.

EUROPE & WORLD

ECB’s head Mario Draghi said that the "strong preference" of the ECB's leadership is for financially troubled Greece to stay in the euro.

Indian rupee hits all-time low vs. dollar on global risk aversion, domestic economic weakness.

Russia records a whopping $42B in capital outflow in January-April. The massive outflow indicates lack of investors' confidence in the Russian economy.

Oil falls to 6-month low near $92 in Asia amid rising US crude supplies, Greece turmoil.

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Tuesday, May 15, 2012

10 Ways to Save on Your Summer Vacation

Summer is just around the corner and you may be gearing up for summer vacation with the kids and/or grandkids or perhaps a romantic getaway with your spouse or significant other. Whatever you decide to do, it’s always nice to save some money in the process.

Thanks to the folks at MainStreet.com, here are 10 tips for saving some money planning out your vacation this summer.

Tip #1: Timing is Everything. As with most things in life, it’s all about being in the right place at the right time. The first trick to scoring some vacation deals is to be a bit flexible with your travel arrangements. Traveling at off-peak times can save you a great deal of money on both flight and hotel accommodations. According to Taylor Cole, a spokeswoman for Hotels.com, “Hotels are cheaper during the week than on weekend, with room rates being the cheapest Tuesday through Thursday.”

Tip #2: Consider Alternate Accommodations. If you can be a bit more flexible or open-minded about where you stay, you can also save a great deal of money. For example, vacation rentals can be a great alternative for larger groups as compared to a traditional hotel room. If you feel more comfortable booking a hotel room, you can save money opting for premium-priced rooms with a view or on certain floors or levels.
Tip #3: Research Flights Arriving Outside of Your Ultimate Destination. Look at other local airports for both departing and arriving flights. While it may not make a whole lot of sense to fly out of Long Beach, Burbank or John Wayne airports as opposed to the much larger LAX, it could potentially save you hundreds of dollars depending on the airline and your destination. Likewise, look at other surrounding airports for your ultimate destination and check and see if changing your airport may have a significant impact on your overall cost.

Tip #4: Beware of Hidden Fees. Whenever you’re planning out your vacation, you should be aware of a variety of fees that may be assessed with your vacation. This could be the airlines, who are now notorious for hiking up costs with a variety of charges, such as baggage fees. Also, hotels raked in an estimated $1.8 billion in 2011 by charging resort or amenity fees, early departure fees, reservation cancellation charges, telephone surcharges, room service delivery charges, mini-bar restocking fees and gratuities. It’s never a bad idea to read the fine print or ask before you book any reservations, particularly because many of these charges can be negotiated.

Tip #5: Don’t Forget the Amenities. When booking your vacation, you may see a lot of great offers for “free” amenities, but sometimes what may seem “free” really is masked in a higher room rate. Consider what amenities you really need and whether or not those that may assess a fee for certain amenities for a lower room rate may make for a much more affordable option. Think of things such as “free” WiFi in your room, when there may be free WiFi available in public areas or at the business center. Consider those that offer free shuttle transportation, when you’re already renting a car or a one or two-time expense for a taxi ride to and from a hotel with a lower room rate may be less taxing on your wallet in the end.

Tip #6: Consider a Room with a Kitchenette. While cooking never seems like a very appetizing option while on vacation, the amount of money a family of four can save on substituting one or two meals per day in lieu of dining out at restaurants or ordering room service can be substantial. Having a room with a small kitchenette will allow you to save money on buying smaller staple items, like bread, eggs, cereal, and milk and, perhaps even more important for some adults, the unnecessary expense of the hotel mini-bar. Buying snacks and alcohol in place of opening up the mini-bar will definitely save you in the long run.

Tip #7: Save at the Pump. Some people have taken to drivecations to avoid the cost of airfare, but depending on the destination, even drivecations can be quite costly with the cost of gas close to $4.50 per gallon. You can save on gas by doing some extra planning before you hit the road. Many gas stations along major highways charge much more than those that may be just a few blocks away and out of sight from the highway. Check out NerdWallet.com to help you do a shop comparison for gas in any area. Also, you can save on gas from some gas stations that offer incentives to those that pay with cash or use their gas credit card.

Tip #8: Find the Free Attractions! There is always usually something to do in just about any city that doesn’t require an admission fee (or a very nominal admission fee). If you can plan your vacation to include some of these free attractions throughout your stay, you can manage to keep your vacation exciting without breaking the bank. From certain museums, parks, concerts and exhibits or shows, you are bound to find something.

Tip #9: Look for Last-Minute Hotel Deals. Sometimes it can pay to be impetuous. Hotels have a depreciating product in so much that they lose money each time a room remains empty. This is why so many last-minute travelers often score the best deals on accommodations.

Tip #10: Sign Up for Airfare Alerts. Like hotel rooms, airlines don’t want to lose money on empty seats either, because whether a plane is halfway full or completely full, the flight will still take off. As take-off time approaches, prices for airfare may also drop to entice bargain shoppers. Sign up for airfare alerts via Google or subscribe to your favorite airline’s e-mail distribution list to find the best deals.

We hope that these tips help you and your family save some money on your vacation this summer or, perhaps, utilizing these tips, you can now plan for a vacation you previously thought you couldn’t take. Stay tuned for some more blog entries in the next few weeks about travel tips for retirees, vacationing with children and the best summer vacation spots.

This post is brought to you by the good folks at Kavesh, Minor & Otis, Inc., servicing the estate planning needs of thousands throughout the Los Angeles and Orange County areas of Southern California. You may attend a free seminar or schedule an attorney consultation. You can also contact us at 1-800-756-5596 for more information. We’d love to connect with you on Facebook, Twitter or LinkedIn.

Photo Credit: cutlivingcosts.com
Source: MainStreet.com

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Tuesday, May 15, 2012

Can You Trust Your Trust?

The Living Trust has replaced the Will as the preferred estate planning vehicle for most all real estate owners.

Unlike the Will, joint tenancy and other estate planning devices, only the Living Trust (when done properly) can achieve all the following objectives - - eventual distribution of your assets to the right people at the right time, management for you when you’re ill or disabled by the persons of your choosing or management for your beneficiaries who need it after you’re gone, avoidance of needless probate court fees during your life and at death, and reduction of estate taxes if you’re married.

You may already have a Living Trust, or you may be thinking about getting one. In either case, you should know there is a catch…

All Living Trusts are Not Created Equal!

It is true that all Living Trusts are similar. You can buy a car that’s either a Yugo or a Cadillac - - both have four wheels and an engine - - but which one would you rather have you and your family drive? (Well, according to Consumer Reports, you don’t want to be caught in a Yugo because it could be a real death trap!)

The problem is… when will you know whether your Living Trust is a Yugo or a Cadillac? When “you go” and it may be a little too late to fix? Or, worse yet, when you’re ill or disabled and you’re relying on your Living Trust to help take proper care of you while you’re still alive?

Unfortunately, many people think that a Living Trust is just a form that can be pulled off the bookshelf or simply printed out of a computer. Or people incorrectly believe that a Living Trust done online using the internet, or prepared by a non-attorney paralegal, or by an inexperienced attorney or a bargain-priced attorney “trust mill” is the same as a Trust that is custom-built by an experienced and skilled attorney.

Based upon my experience in supervising the administration of over 3,000 Living Trusts after people have died - - when Trusts are truly tested - - many Trusts are, in fact, poorly built or improperly maintained.

What Can Go Wrong With Your Living Trust?

Let me share with you a few of the “defects” I regularly encounter when reviewing people’s Living Trusts, in the hope that you will cure them now, before it’s too late.

Will your Living Trust work properly when you’re sick or disabled and can’t act for yourself?

Will your chosen successor Trustee be able to immediately step in for you, without first going to court?

Do you have the right “HIPAA” provisions in your Trust, as well as a separate HIPAA Authorization that is compliant with both federal and California law - - so your Trustee and health decisions maker (under your separate Advance Health Care Directive) can immediately access your medical information without going to court?

Do you have a Health Document Emergency Card so that your HIPAA Authorization and your Advanced Health Care Directive documents can be immediately accessed by medical professionals when needed?

Does your Trust (and accompanying Durable Power of Attorney) have the proper “Medi-Cal” provisions so that, if necessary, you may qualify for government nursing care benefits more quickly, and in a way that your estate will not have to repay those benefits after you’re gone?

Will your Living Trust actually avoid the fees, delays and publicity of Probate Court?

Did you get, or will you be helped in getting all your asset titles (or beneficiaries) properly into your Trust?

What about assets you acquired after you setup your Trust?

Was any of your property taken out of the Trust in order to refinance a loan and not retitled back into the Trust?

Is your Trust up to date with recent estate tax changes?

If you are married, do you have the right kind of “A-B” Trust?

Whether you’re single or married, should you be pursuing planning beyond the Living Trust, to reduce potential estate taxes and avoid forced sales of your real estate after you’re gone?

Will all your assets actually pass to the people you designate under your Living Trust?
- Are all your beneficiaries on bank accounts, annuities, life insurance policies, retirement plans and IRAs consistent with your Living Trust?

Should life insurance, retirement plans and IRAs be payable to special trusts (separate from your Living Trust) in order to maximize protection against future income tax and estate tax?

Are your beneficiaries’ inheritances properly protected if they are too young, disabled, have drug or alcohol problems, are not good at handling money, or are receiving government need-based benefits (like certain disability or Medi-Cal benefits)?

Should your beneficiaries have a portion or all of their inheritance held in a specially designed temporary, lifetime, spendthrift or special needs trust?

Does your Living Trust have a special provision that allows it to adapt the type of beneficiary trust to the changing circumstances and needs of each beneficiary after you’re gone?

For your beneficiaries who are capable of receiving their inheritance right away, is that inheritance properly protected against their spouses, divorce, predators, bankruptcy, lawsuits and exposure to another estate tax when your beneficiary passes away and your legacy goes to the next generation?

Should they receive their inheritance in a specially designed, beneficiary-controlled, asset protection trust (known as a “Personal Asset Trust^SM” )?

Should you be setting up separate “Dynasty Trusts” now for your beneficiaries (apart from the Living Trust) to enhance their asset protection as well as your own, while also reducing your potential estate taxes and allowing assets to pass to future generations estate tax-free?

Have you chosen the right successor Trustees?

Have any of them since moved away, died, become too old to act or proven they aren’t as good at handling money as you originally thought?

Do you have young beneficiaries who should not be Trustees now, but may be considered later when they get older and wiser?

Does your CPA or an independent bank or trust company make sense as a sole Trustee or as co-Trustee with your beneficiaries, to prevent family conflict or be a “check and balance” to them?

These, and other issues that can’t be discussed here due to limited space, should be addressed by you and the attorney who drafts your Living Trust - - so you’ll have the peace of mind that your Trust will in fact work properly when the time comes.

Also note that, even if you had an excellent job done on the Trust you already have, it is wise to periodically have it reviewed to be sure that it’s up to date with the latest law and planning technology, as well as your wishes (reflecting changes that may have occurred in your assets, your needs and circumstances, your relationships with beneficiaries, or their needs and circumstances).

Then, you can trust your Living Trust and concentrate on living!

This post is brought to you by the good folks at Kavesh, Minor & Otis, Inc., servicing the estate and financial planning needs of those in the Los Angeles and Orange County areas of Southern California. If you already have a Living Trust, attend an upcoming free educational seminar where you can schedule a free 90-minute attorney consultation and get your Living Trust reviewed. If you're already a client of Kavesh, Minor & Otis and you haven't been in since 2009 or later, you are overdue for a free trust review. Attend our next Review Trust Seminar or call us and schedule your free attorney review. You can also contact us at 1-800-756-5596 for more information. We’d love to connect with you on Facebook, Twitter or LinkedIn.

Photo Credit: activerain.com

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Tuesday, May 15, 2012

Today's Headlines: Facebook Raises Share Price to Bring Estimated Value at Over $100 Billion, Housing Market Improving & More

US FINANCIAL MARKET

Home Depot reported weaker-than-expected quarterly sales, which fell victim to the weather in April.

Avon shares slide after Coty withdraws takeover offer.

Groupon shares jumped 22 percent in premarket trade on upbeat Q1 results.

Facebook has raised the price target range to between $34 and $38 per share in response to strong demand, from $28 to $35. That would value Facebook at roughly $93 billion to $104 billion. At the mid-point of $36, Facebook would raise $12.1 billion.

Sony and Panasonic are in talks to develop the technology to mass produce next-generation OLED televisions.

Samsung and LG plan to sell 55-inch OLED televisions, which are as slim as 4 millimeters and consume less power and offer sharper images than LCD, by the year-end.

Japanese firms such as Sony, Panasonic and Sharp have been battered by their aggressive Korean rivals and reported a combined net loss of more than $20 billion in the year to end-March.

Google's Android smartphone software stretched its market lead in early 2012.

US ECONOMY & POLITICS

April retail sales hint at slower spending pace. Retail sales edged up 0.1 percent, held back by a decline in receipts from building materials and clothing stores. But manufacturing remained resilient, with a gauge of factory activity in New York State bouncing higher this month as new orders and shipments rose.

Auto sales increased 0.5 percent after rising 0.2 percent in March. So-called core retail sales, which exclude autos, gasoline and building materials, rose 0.3 percent after increasing 0.6 percent in March.

Unusually warm weather pulled forward sales in the prior months, resulting in first-quarter consumer spending rising at its fastest clip in more than a year. Consumer spending increased at a 2.9 percent annual rate in the first three months of this year.

The economy grew at a 2.2 percent rate in the first quarter.

April consumer prices flat as gasoline drops. Core CPI edged up 0.2 percent. Overall consumer prices rose 2.3 percent year-on-year, down from a reading of 2.7 percent in March.

The Commerce Department said that business inventories rose 0.3 percent in March, the smallest increase since November. Business sales rose 0.6 percent in March.

US homebuilder confidence rises to highest level in 5 years, a hopeful sign that modest improvement in the housing market will pick up. The index rose to 29 in May, up from 24 in April.

EUROPE & WORLD

Greece will hold a new election in June after days of talks failed to resolve the country's political deadlock, party leaders said Tuesday.

Euro zone finance ministers dismissed talk of Greece leaving the euro zone as "propaganda and nonsense" on Monday, but said the country had to respect the terms of the bailout program agreed with the EU and the IMF.

Germany pulled the euro zone's economy back from the brink of recession at the start of 2012. Overall GDP was unchanged in the first quarter, better than the 0.2 percent contraction most economists had expected.

Germany’s GDP rose by 0.5 percent on the quarter. France reported no expansion in the first quarter. Italy's GDP fell 0.8 percent. Even in the wealthy Netherlands, economic output contracted for a third consecutive quarter, shrinking 0.2 percent in the first quarter.

Greek GDP contracted 6.2 percent.

Tuesday's data showed a two-speed euro zone, with Italy's recession deeper than feared and Greece suffering something akin to a depression.

Recession hits "pretty grim" EU states in the east; Romania shrinking 0.1 percent. Czech Republic's economy shrank 1 percent. Hungary shrank 1.3 percent on the quarter.

Germany's two biggest steelmakers, ThyssenKrupp and Salzgitter, gave a grim outlook for the rest of the year.

Moody's downgraded the debt ratings of 26 Italian banks, which means Moody's now ranks Italy's banks lower than most of their Western European peers.

Brazil economy to miss 2012 growth target, four officials told Reuters. Brazil's economy is set to expand slightly above the 2.7 percent.

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Monday, May 14, 2012

Today's Headlines: Cosmetics Seller Avon Considering Buyout, Gov. Jerry Brown Estimates Higher Budget Shortfalls & Much More

US FINANCIAL MARKET

JPMorgan is expected to accept the resignation this week of Ina Drew, its CIO and one of its highest-paid executives, in the next few days after $2 billion trading blunder.

Yahoo shares jumped 2 percent in premarket trading on Monday after the exit of CEO Scott Thompson following questions about his academic record.

Best Buy's founder Richard Schulze is stepping down as chairman after an investigation found that he knew that the CEO was having a relationship with a female employee and did not alert the audit committee.

Three former executives of GE affiliates were convicted by a federal jury in New York of conspiracy charges related to bid-rigging contracts for the investment of municipal bonds, the U.S. Department of Justice announced.

Shares in German luxury TV maker Loewe jumped to a 10-month high on Monday on market talk of a potential offer from Apple.

Canon is moving toward robots-only full automation in digital camera production in an effort to cut costs.

Cosmetics seller Avon says it's now considering buyout offer from smaller Coty. Coty offered about $10 billion.

Overall, 453 companies have reported earnings for Q1 2012 to date. Of these 453 companies, 72% have reported actual EPS above the mean EPS estimate. Q1 2012 earnings growth for S&P 500 is almost equal to estimate on October 1.

(click to enlarge)

US ECONOMY & POLITICS

U.S. Treasury debt prices are rising as Greece edges toward exiting the euro currency, spreading uncertainty through global markets.

Crude-oil futures were 2% lower near $94 a barrel, after settling a fresh 2012 intraday low on worries that Greece may leave the European common currency agreement.

Governor Jerry Brown says California facing higher-than-expected $16 billion budget shortfall, which will force severe cuts to schools and public safety if voters fail to approve tax increases in November.

EUROPE & WORLD

Talks to form a governing coalition Greece are planned Monday but the chances of success have been diminished after one leftist party pulled out of the talks, leading the country one step closer to new elections — and bringing its continued membership in the euro into serious doubt.

Spain's top five lenders will set aside an extra 15 billion euros ($19.4 billion) in provisions to cover risky property deals, heaping pressure on their finances as the country battles to restore confidence in its banking industry.

Voters in Germany's most populous state inflicted an embarrassingly heavy defeat on Chancellor Angela Merkel's conservatives Sunday and strengthened a regional government that the German leader's party had portrayed as irresponsibly spendthrift.

India's inflation accelerated to a worse than expected 7.2 percent in April, on rising food and manufacturing prices.

In March, the overall unemployment rate for the Eurozone came in at 10.9%, up a full percentage point from a year earlier. However, this aggregate number masks a wide range of jobless rates among the member countries

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Friday, May 11, 2012

This Week's U.S. Financial Market, Europe & World Financial Update and U.S. Economy and Politics Update

US FINANCIAL MARKET

McDonald's reported a smaller-than-expected rise (3.3 percent) in April sales at established restaurants across the globes, which were held back by a disappointing increase in its U.S. business.

RIM has named two executives; chief marketing and operating officers as it looks to fashion a unified message ahead of the launch of its next-generation BlackBerry 10 smartphones later this year.

Abbott has pleaded guilty and agreed to pay $1.5 billion over allegations that it promoted the anti-seizure drug Depakote for uses that were not approved by the Food and Drug Administration.

Disney’s quarterly earnings beat Wall Street expectations as profit rose 21 percent. Strong attendance at theme parks and higher advertising revenue at cable networks, including sports powerhouse ESPN, helped drive quarterly growth.

Macy's outlook disappoints. It kept its full-year profit forecast despite reporting better-than-expected first-quarter earnings.

Volkswagen's luxury car brand Audi outsold market leader BMW for the first time in more than a year in April as continued high demand from China, the United States and Russia boosted vehicle sales.

Oil falls to near $96 in Asia as US crude inventories grow to 22-year high, 379.5 million barrels. For the past two years, inventory level was between 335-360 million barrels.

Shares of Cisco fell 9 percent today, after the network equipment maker forecast weaker-than-expected quarterly results on growing worries about the European economy and enterprise IT spending.
Tesla Motors will start delivering its Model S sedan to customers next month, slightly earlier than the electric carmaker had previously projected.

GM will recall nearly 50,000 Chevrolet Aveo cars in China due to faulty brake fluid sensors.

JPMorgan’s shock trading loss of at least $2 billion from a failed hedging strategy knocked financial stocks across the globe.

Shares in Sony slumped more than 7 percent to near 32-year lows, as investors doubted the Japanese consumer electronics giant has a strategy to fix its loss-making TV business and compete in the smartphone market against Apple and Samsung.

Nissan’s January-March profit is more than doubled. Its annual global sales reached a record 4.85 million vehicles.

US ECONOMY & POLITICS

Home prices rise for first time in 8 months. CoreLogic's home price index gained 0.6 percent from February.

Taxpayers could realize a profit of more than $15.1 billion from the massive government bailout of insurer AIG. Treasury reduced taxpayer equity interest in AIG to 61 percent.

University of California students could face significantly higher tuition if the state doesn't increase funding.

Cattle prices double as Southwest ranchers begin to rebuild herds after devastating drought. A quality cow that sold last year for no more than $1,800 now fetches about $3,000.

Mortgage giant Fannie Mae not asking government for aid; posted $2.7B gain in Q1.

Couples retiring this year can expect their medical bills throughout retirement to cost 4 percent more than those who retired a year ago, according to an annual projection released Wednesday by Fidelity Investments. The estimated $240,000 that a newly retired couple will need to cover health care expenses reflects the typical pattern of projected annual increases.

The number of people applying for U.S. unemployment benefits ticked down last week after dropping sharply the previous week, evidence hiring could pick up this month. New claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 367,000 in the week ending May 5.

A jump in job openings also suggests hiring will pick up. Employers advertised 3.74 million job openings in March, the most since July 2008. It usually takes one to three months for employers to fill openings.

The gap of the US trade balance (March) grew 14.1 percent to $51.8 billion, the biggest jump in nearly a year, even though exports also hit a record high. Real imports declined by 3.9%. Although the trade balance deteriorated, the change was mostly anticipated, and a few details of the report were positive for the GDP tracking estimates.

Import prices in April recorded their largest drop in 10 months as energy costs tumbled, partly in natural gas. Overall import prices fell 0.5 percent.

Job-creating foreign investment in U.S. lags. Foreign investment in the US is ebbing and beefing it up is critical for economic growth as each job at a foreign company's U.S. unit supports three others, the Organization for International Investment said on Thursday. A complex U.S. tax code and increasing global competition are curbing business development here by foreign companies. The US attracted just about 17 percent of global investment in 2009, down sharply from over 41 percent in 1999.

Average US rate on 30-year fixed mortgage hits record low of 3.83 percent.

Fed Chairman Bernanke says many businesses and consumers are finding it easier to borrow.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 77.8, the highest since January 2008, from 76.4 the prior month.

Producer prices unexpectedly fell in April as energy costs dropped by the most in six months. The index dropped 0.2 percent last month, which is the first drop of the year and the biggest decline since October. Excluding volatile food and energy costs, the so-called core prices rise 0.2%, as expected.

Treasury sells $5.75B in stock of bailed-out insurer AIG. The sale reduces Treasury's ownership of AIG to approximately $29 billion, held in the form of 1.06 billion common shares of AIG.

EUROPE & WORLD

Top oil exporter Saudi Arabia will satisfy its customers’ needs whatever they are, Oil Minister Ali al-Naimi said on Tuesday.

Spain will demand banks set aside another 35 billion euros ($45 billion) against loans to the ailing building sector.

A successful euro zone requires a single government if it is to work properly, British Prime Minister David Cameron said in a newspaper interview. Queen Elizabeth II says UK to separate banks' retail operations from riskier investment arms.

German exports rose 0.9 percent in March compared with the previous month to hit a new record level, but the growth rate slowed as demand from elsewhere in the debt-troubled eurozone sagged.

Saudi Arabia signs deals for financial aid package to Egypt to shore up battered economy. The kingdom has agreed to provide $500 million in aid and will deposit an additional $1 billion at the country's central bank.

Merkel rejected calls from her centre-left opponents in Germany and Europe for economic stimulus policies that rely on new debt, warning parliament on Thursday that "growth on credit" would just tip Europe deeper into crisis.

Bank of England holds base interest rate at 0.5 pct, no additional monetary stimulus as inflation worries weigh. UK factory output rises faster than expected in March, but overall industrial production falls.

China's trade surplus widens in April. Imports edged up 0.3 percent to $144.8 billion in April while exports rose 4.9 percent to $163.3 billion, leaving a surplus of $18.4 billion. China often has a large trade deficit early in the year as factories restock after their long lunar New Year holiday break.

Greek unemployment rises to 21.7 percent in February, 336,500 lose job in past year.

China economy shows unexpected signs of weakness. Industrial production rose by 9.3 percent in April, the lowest level since May 2009, while retail sales growth slowed to 14.1 percent, the weakest in 14 months.

China's inflation also eases to 3.4 percent in April, as economy slows further.

India's March industrial output fell 3.5 percent from a year ago, worse than expected on weak manufacturing and investment.

The European Commission forecasts that the eurozone economy will contract by 0.3 percent in 2012 and grow by 1 percent in 2013.

Germany is welcoming the French president-elect's decision to visit Berlin hours after taking office, but is downplaying expectations of any immediate decisions on European policy.

Germany's finance minister suggested in comments published Friday that the eurozone could deal with an abrupt exit by Greece, even though he says he doesn't want that to happen.

Greek political parties fail to reach coalition agreement. Banks are quietly preparing for return of Greek drachma.

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Wednesday, May 09, 2012

Starting a New Mother's Day Holiday Tradition By Attorney Philip J. Kavesh, President

In honor of Mother's Day, I was asked to write a special cover article. Almost instantly, the following story came to mind.

My daughter and I recently traveled to Florida and visited my mother (whom my daughter affectionately refers to as "Mom-Mom"). It was a beautiful and wonderful event. My daughter, having grown up far away here on the West Coast and almost always going on family trips together with her twin brother, rarely had the opportunity to spend time by herself with her Mom-Mom.

Phil, His Daughter & His Mom

My daughter, now age 20 and a young woman, was able to speak with and relate to her Mom-Mom in new, different and deeper ways. It was a real joy for me to see them stroll the mall together and chat about so many things, comparing notes about where they are and have been in their lives, as well as their different fashion senses!

The most interesting and thought-provoking conversation occurred innocently enough one morning over the breakfast table. My daughter was curious about her Mom-Mom's family history, something which she had rarely talked about. I, too, was all ears as my mother answered her granddaughter's probing questions.

Mom-Mom launched into numerous lengthy and detailed stories of her family's past, many of which, to my surprise, I had never heard before!

The most moving story was about her own mother and grandmother (my daughter's great grandmother and great-great-grandmother, if you're keeping track).

My mother shared how her mother, Sylvia, was raised in a small, rural village in the Ukraine. One day when she was about 8 years old, Sylvia's mother hurriedly called her into the living room. Sylvia's mother told her she had an important message to take to all the villagers - - that a visiting Rabbi had just warned her mother that the Cossacks were coming! This immediately pulsed great fear throughout Sylvia's small body. Like all Jews living in that region, this summoned up the image of horrifying giant men on horseback, with long swords, whose evil intent was to slaughter Jews.

Sylvia was told to go through the whole town, amongst all the Jewish families' homes one-by-one and warn them to take cover. She was further instructed that once she reached the other end of town, she was to go to the home of a Christian woman, whom her mother knew and would give her shelter for the evening. It was almost nightfall, would get cold very soon and there was precious little time to waste with the terrible galloping horsemen rapidly descending upon the town. Sylvia, though small, was selected for this big task because she was very athletic and a fast runner (now I know where my Mom got her athletic skills from!).

Sylvia immediately sped off on her mission. She successfully reached every Jewish home, spreading the word so people could hide (many had fake basements below the floor boards or underground storage bins in nearby fields). Tired and scared, Sylvia finally arrived at the Christian woman's house on the other side of town. Moments after explaining to the lady why she was there, a loud knock and harsh voice were heard at the front door. The Cossacks had arrived!

The lady told Sylvia to go upstairs and stay with her two daughters. Then the door burst open and there stood a very large, imposing man in a tall pointed hat and military uniform, knee-length boots and a long sword at his side. He stepped inside uninvited and demanded to know if any Jews lived in the dwelling. The lady immediately answered no, that only she and her three daughters were present and none were Jews. The Cossack then demanded to see the children and they were ordered to come downstairs. Sylvia, who didn't look or dress like the lady's two daughters, was frightened to death to now have to face this monster!

The Cossack asked each girl to speak out her name. When he came to Sylvia, the lady recognized that Sylvia was paralyzed with fear and that she would not be able to talk. So the lady grabbed away the Cossack's attention by very forcefully shouting in his face that she would summon her husband from outside if he did not stop harassing them. She reiterated that there were no Jews present and that any Jews who may have lived in the town were away on a religious holiday.

The Cossack, so taken aback by this suddenly brazen woman's rebuke, responded only with a few mumbled words and stomped out the door!

The Christian lady not only saved Sylvia from a cruel fate, but all of the other Jews in town, as the Cossacks rode off after searching just one or two other homes and finding them vacant.

At this point, I was thinking, "Wow, quite a story!" But, then came the most interesting part. My mother told my daughter she had only learned about this story from her mother late in her mother's life.

My mother explained that a few years after that eventful evening, Sylvia's family moved to Austria to escape the Cossacks. There, Sylvia met and married a young man (Philip, for whom I was later named). He insisted on leaving for the United States to start a new and better life. It was around 1920 and they already had several children, but my mother had not yet been born.

So, Sylvia and Philip and their family traveled to the United States, settling in Atlantic City, New Jersey. Shortly thereafter, my mother became the first daughter to be born in America.

My mother recalled hearing her mother lament for many years about having been forced by her father to move to the U.S., where the language and culture were so different than what she had known. She repeatedly beseeched the Almighty One, "Why have you sent me to such a terrible place?"

This lamenting continued until one shocking and humbling day, shortly after World War II. On that day, Sylvia learned that her entire family, except for her sister who had also come to America, were apparently killed in the Holocaust. It was then, from behind her tears, that my mother recalls Sylvia shrieking out, "Thank you, Lord! Now I know why you sent me here - - as reward for having saved all of those families in my hometown that night long ago, you have spared me and my children!"

The heavy repercussions of this story instantly struck my daughter. Had her great-grandmother, Sylvia, not left Europe, perhaps her grandmother would have never been born - - nor her father (me)!

My mother's compelling and heart-wrenching story about her mother impacted me too, for many days later. Over time, the greatest realization that occurred to me was how many great family stories like this are never passed down and are lost to our loved ones forever. When my father, who was an only child, recently passed away, our family knew very little about his heritage. Unfortunately, it all went with him.

Passing down your family history can be a wonderful, personal legacy that unfortunately doesn't occur as part of the legal process of planning your estate. It takes some of your own individual time and effort to accumulate the photos, stories and memories and then share them. Maybe you should start a new Mother's Day tradition. Gather the family around your mother or grandmother and have her go through the family photos, and share the great stories she's never told (or may not have told yet to the youngest generation).

An even better and more permanent way to memorialize your family history is to record a "Legacy Video". A professional videographer can interview you about the history, personalities and achievements of your life and your ancestors' lives. You can even include photos and other memorabilia on the final video. If you're interested in doing this, we have arranged a special discount for you with a local professional videographer that specializes in Legacy Videos. He comes right to your home and will help you put together this video, every detail from A to Z. For more information on Lance Keller and his company, Digital Legacy, go to www.digitallegacyca.com or contact him at (310)798-7172 or by e-mail at lance@digitallegacyca.com. Be sure to tell him you were referred by Kavesh, Minor & Otis.

A Legacy Video may be the best Mother's Day gift you could ever give a mother (or grandmother) - - and just might be the best gift she could ever leave to her loved ones as well! Have a Happy Mother's Day!

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Monday, May 07, 2012

Today's Headlines: Facebook to Raise $10.6B in Mega IPO, Chrysler Recalls Over 120K Vehicles, Oil Price Drops & Much More

US FINANCIAL MARKET

Facebook plans to raise $10.6 billion in mega IPO. An initial public offering price range of between $28 and $35 a share on Thursday, which would value the company at $77 billion to $96 billion. Facebook's stock could begin trading as soon as May 18, according to a road show schedule obtained by Reuters.

Warren Buffett said Friday he had no plans to invest in the Facebook’s IPO, but said what’s happening with the social media giant is “extraordinary.”

Kraft profit beats by a penny. Its profit slightly exceeded Wall Street estimates, after the company raised prices and shipped more Easter chocolates in the first quarter.

United Airlines is putting the finishing touches on an order for at least 100 Boeing 737 narrow-body jets potentially worth $10 billion at list prices, industry sources said on Thursday.

LinkedIn is acquiring SlideShare, which allows its users to share presentations online, for US$118.75 million.

Yahoo confirms misleading info on new CEO's resume.

Apple's smartphone and tablet shipments by quarter:

	iPhones (millions)	iPads (millions)
Q1:2012	35.1	11.8
Q4:2011	37.0	15.4
Q3:2011	7.1	11.1
Q2:2011	20.3	9.3
Q1:2011	18.7	4.7

Intel raises quarterly dividend by 7 percent to 22.5 cents.

Chrysler recalls 127,350 Dodge Chargers and Chrysler 300s due to potential problems in electrical stability control and anti-lock braking systems.

Toyota says China sales in April up 68 percent.

Buffett said a recent bribery scandal at Wal-Mart has not changed his investment opinion about the stock. He characterized Wal-Mart's troubles in Mexico as being caused by a group of bad apples who don't represent the broader company's values.

AT&T is making a big investment in a nationwide wireless home monitoring service that could potentially add $1 billion to its annual revenue. It is planning a service called "Digital Life" to monitor homes for everything from water damage to burglaries and to let customers remotely do things like adjust temperature or unlock doors, using an Internet connection.

Yahoo could be weeks away from selling 15 to 25 percent of Alibaba’s stock back to China's largest e-commerce company.

Sprint’s CEO Daniel Hesse said he would take a cut in pay this year, after coming under fire from some shareholders disappointed with the hit the company's results took from subsidizing Apple's popular iPhones.

Oil drops to below $98 in Europe amid signs of weakening US demand, European elections.

US ECONOMY & POLITICS

U.S. April hiring slows, jobless rate falls to 8.1 percent. Employers added 115,000 workers to their payrolls last month. The report was not all negative. The government revised upward its initial estimates for payroll growth in February and March by a combined 53,000.

California pension fund sues Wal-Mart, alleges bribery.

U.S. auto sales to drive aluminum demand –Novelis.

Major importers stepped up their purchases of U.S. beef last week despite the discovery of a case of mad cow disease in California, government data showed on Thursday. Mexico, South Korea, Japan and Canada, which combined took 65 percent of U.S. beef exports last year, as well as the European Union said they would continue to import U.S. beef.

Buffett says buying stocks amid market dip.

San Francisco Fed President John Williams painted an improving picture of the U.S. economy on Friday but said lofty unemployment, a festering crisis in Europe, and the year-end expiration of stimulative tax cuts make continued easy monetary policy a must.

A monthly gauge of online labor demand in the United States rose in April, with more jobs available in the transportation and warehousing sector, Monster said.

EUROPE & WORLD

China has made significant and promising reforms to its currency regime that will lead to further appreciation of the yuan against the dollar and other major currencies over time, U.S. Treasury Secretary Timothy Geithner said on Friday.

The United States supports China's bid to have the yuan included in the IMF’s basket of currencies, Chinese Vice Premier Wang Qishan said on Friday.

China's services sector enjoyed its busiest month in half a year in April. The seasonally adjusted HSBC China Services Purchasing Managers Index (PMI) rose to 54.1 in April from 53.3 in March, its strongest reading since October 2011.

Hollande defeats Sarkozy 51.62 pct to 48.38 pct.

Germany will not renegotiate Europe's fiscal compact on budget discipline and rejects measures to foster growth that would push up debt levels.