Are the Best Credit Cards Always the Best?

The typical 0% balance transfers are one of the top ways these card companies bring in new clients. Who can say, “no,” to a 0% APR for a year when their current APR may be 10% or even 20% currently? The problem is, that many borrowers still do not read the fine print. Often times a balance transfer will cost a borrower more than they may save in the long run. Although the 0% rate seems like one of the best credit card offers you will ever come by, after that first year, rates could reset to a level higher than you were paying with the older card. In addition, you will have a fee for leaving the old company as well.

Having said this, as long as you understand the contract you are getting into when you do a balance transfer, and calculate the numbers correctly, you can, and often will save a ton of money. Just make sure you know what you are getting into before diving head first into another credit card company, and all their rules. As the economy continues to get better, you likely will be able to find lenders more willing to lend, however, rates will eventually go up. Timing is everything in this market.

JP Morgan Chase

When President Bush was in office, the democrats blamed him for the downturn in the economy. Now that Obama is in office, he is being blamed for the sluggish and slow recovering economy. Fact is, the economy is based on the business cycle, and it always has been. Sure, monetary and fiscal policy both have effects to a certain degree, over recovery time and how long an economy stays dormant for. However, there will always be peaks and troughs in the economy.

Today we learn of JP Morgan Chase’s (JPM on the NYSE) large profits for the 3rd quarter of 2010. Profits for the company rose 23 percent to $4.4 billion in this latest quarter, which includes July through September. A 23 percent increase from this time last year is believed by many to be a sign that a recovery must be near.

According to the reports, the retail banking arm was the main factor in such a large increase in profits. JP Morgan Chase saw their profits from retail financial services rise from $7 million in 2009′s 3rd quarter to $907 million this year. That’s not a typo.

All of this good news comes as the federal reserve looks to be about to initiate more quantitative easing, which should (if used correctly and timed right) help businesses grow.

Is a bull market on the horizon? It is very possible. What do you think?

Jobless Claims Fall Again

Overall, the number of new people filing for unemployment has dropped a considerable amount in the last 5 months. In June a total of 600,000 claims were reported. Economists are looking for a sustained decline in initial claims for unemployment below 450,000. If this occurs, things would look a lot brighter for the US job market.

This is the 4th time in the last 5 weeks that there has been a decline. Economists who were polled earlier this week expected a rise in unemployment claims, however they were pleasantly surprised when the opposite was reported this morning. The Dow Jones Industrial Average is up 40 points in pre-market trading this morning, as hope for a slow recovery continue to be on the minds of traders.

Consumer spending is a very important part of any economy. Economists look at it for clear signs that the economy is picking up,. Today’s numbers in Consumer spending were higher than the forecast. People are spending more than they were last month, meaning business’s should be making more money as well. The median estimate for consumer spending was a rise of 0.3% while the actual number came in at 0.4%, however, there was also some bad news in the economy last month. According to reports, Income in the United States rose only 0.2%, which was less than the forecast 0.3% that economists had expected.

Overall, this does relieve some concern over a double dip recession, at least putting it off for a while, however, until the unemployment rate decreases, there will likely not be any major sustained consumer spending growth in the long run. Inflation also rose slightly, allaying concerns of a deflationary period anytime in the immediate future.

Unemployment Improving?

48 expert economists who were surveyed by the Dow Jones Newswires predicted that jobless claims would only fall by about 10,000 (median of those surveyed). Instead we saw a decline of 31,000 which is three times what was expected.

The statistic refers to the applications for unemployment benefits in the U.S. It does not include those people who were already collecting unemployment. These numbers are slightly encouraging for a job market that has not had much good news lately. After last weeks news that 504,000 people had filed for unemployment the week before, a lot of analysis were not expecting much improvement. The 504,000 new claims was the highest we’ve seen since November.

There doesn’t seem to be any special underlying cause for the larger than expected drop, according to the Labor Department. It will be interesting to see what happens this week and the coming few weeks. Perhaps the job market is getting better after all.

A Look at New Home Sales

The drop was not expected by most economists who had predicted 334,000 new homes to sell in July. The actual number came in much lower at just 276,000. This likely is not the end of the pain in the housing market. Mitchell Hochberg, of Madden real Estate says, “With shadow inventory, rising foreclosures, little job growth and more stringent access to credit, weak sales will persist and the industry’s headache will linger.”

A rebound in the housing market is seen by economists as a key variable in the overall economy’s recovery. Having said this, until the unemployment rate falls, the housing market will remain very weak. Regionally, the largest sales drop was seen on the West Coast, while the South and Midwest saw only 8% drops in new home sales.

Gold Prices today ended above $1,235 an ounce as more bad news came in about the US Economy. These economic reports coming from several fronts, put pressure on the US dollar, thus increasing the price at which it costs to purchase an ounce of Gold.

The Us Unemployment numbers seem to be getting worse rather than better, as new filings for unemployment claims surpassed the 500,000 mark last week, which was 12,000 more than the revised numbers from the week prior. As long as economic uncertainly looms in both the US and International economies, investments will likely continue pouring into Gold.

“The latest economic data have disappointed, raising concerns once again about the solidity of the recovery,” stated, Anne-Laure Tremblay, who is an analyst at BNP Paribas. “This uncertainty in turn supports the gold price.”

With many of the economies on the planet suffering, and the debt crisis nearing epic proportions worldwide, gold seems to be one of the few safe bets at this time.

Unemployment still not improving

Last week, there were 500,000 new claims filed for unemployment. This number is higher than it has been in 9 months. Last week, there were 480,000 claims filed. Unemployment insurance is issued to those who are actively looking for new jobs, after being layed off of their previous jobs.

Many job seekers are wondering when the job market will get better. Economists are mixed on their predictions. Some believe it is about to turn around now, while others believe that we have over a year to go before things change. Employment numbers are considered to be a lagging indicator, meaning they tend to get better after the economy has begun to recover. Job numbers usually are not analyzed to see which direction the economy is turning.

Gold prices rose today to over $1,230 an ounce today as many gold analysts are predicting that we will likely see intraday all-time highs sometime before mid September. The intraday high for Gold was reached back in June of this year when it struck $1,264 an ounce. Technically gold is a buy, however many experts are still wary to give a buy signal when prices are already up so much in the last few years.

The fact that the Federal Reserve stated earlier this week that deflation likely will not be a problem, is a positive for buyers of the precious metal. If you are looking to invest in Gold without having to purchase the actual physical metal, many financial advisers would recommend a position that is valued at approximately 10% of ones portfolio in the exchange traded fund with ticker symbol GLD.

There are obviously several factors which influence gold’s prices. These range from international economic stability to the rate of inflation, to how many other investment opportunities are out there that investors think are more promising than the precious metal.

If you happened to tune into CNBC earlier you likely were able to catch the segment where Hedge fund manager Kyle Bass was able to give his thoughts on the economy and markets in general. Kyle Bass has been credited for making several doom and gloom predictions on the economy that ended up coming true in the long run.

When asked his opinion on the current state of the world economy he stated, ” Given my outlook on the world, I don’t know how you can be long stocks”. Bass feels that the situation in Europe is out of control. Their banking system is “infinitely” more leveraged than that of the United States when comparing the GDPs of both economies. He feels like the European bank stress tests were worthless, and that a restructuring of European debt will have to occur before things inprove.

Although Bass is long in several US investments, he is not long in the stock market. He likes US high yield debt in the form of corporate bonds, and also indirectly invests in US bank debt and US mortgages. it is rather ironic however that Bass makes these comments the same day that George Soro’s showed excitement towards the long term prospects of equities.