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Featured Advisor

Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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News Analysis for May 10, 2011

Commodities return to the positive side

Commodities began to rebound on Monday from the deep dive they took last week, according to the Associated Press.  Oil moved back to over $100/barrel.  Silver increased 5% and corn was up 3%.  The Dow was up 45 points closing at 12,684.  But futures showed that oil prices backed down somewhat on decreased U.S. demand on Tuesday.

But fears linger on with firms like H&R Block losing 8% on Monday based on fears that it harbored subprime mortgage issues in its subsidiary Option One.  Option One, as reported by the Associated Press, stopped issuing loans in 2007, but concerns that bad loans were not originally reported linger.

FDIC Chief to step down

Sheila Bair, the chairwoman of the FDIC, will step down when her term ends in July, according to CNBC.  Bair served her 5 year term during the worst part of the financial crisis.  She was responsible for closing the most banks since the savings and loan crisis, helped increase the deposit insurance rate to $250,000 per insured account and was willing to criticize big banks.

China announces huge trade surpluses as talks with U.S. continue

China announced a trade surplus of $11.4 billion in April which was much higher than originally anticipated.  This comes as the government is working to cool off its economy.  Talks resume again today between the U.S. and China.

Skype close to purchase by Microsoft

Microsoft is near a deal to purchase Skype for $7 billion.  Skype currently has 663 million users and 207 billion minutes of voice and voice videos are used each year, as report by the Wall Street Journal.  This would be one of the largest purchases made by Microsoft.

Toyota plans to return to normal production two months earlier than anticipated

Toyota, which was deeply hurt by the March earthquake and tsunami in Japan, announced that it anticipates it will return to full production no later than the end of the year, which is two months earlier than originally anticipated.

Citigroup engineers a reverse split

Citigroup was able to increase its share price to over $40 per share by executing a reverse split and decreasing the number of shares issued.  AIG performed the same transaction a few years ago.  The Wall Street Journal indicates that the benefits generally only occur for a short time.  The action is intended to attract institutional investors.

Credit card deals often not worth the prize

As consumers continue to be cautious about spending and using credit cards, credit card companies are launching several new deals and offers to attract customers.  But USA Todaycautions that the deals are seldom worth the cost and offers the follow tips.

            1. Determine whether you carry a balance.  Cards with premiums often charge                higher rates on outstanding balances.

            2.  Annual fees.  Cards that allow you to save miles or other points for future                    purchases generally charge an annual fee.  Make sure that what you are getting                    is worth the cost of the fee.

            3.  Lifestyle.  If the gift is a tea with the queen, make sure you are likely to go to                England.

            4.  Spending habits.  If you only get your prize for spending $3,000 in 3 months,              make sure that is your typical habit.

            5.  Deadlines.  Pay attention to actions you must implement by specific dates.

            6.  Credit score.  Don't apply to numerous cards just to get the prizes.  Each time              you apply your credit score is dinged.