Notes from Lynda Startzman………………October 16, 2008
SUMMIT CALLED OF BANK CEO’S CONGRESS SENDS REP TO WALL STREET, HEARINGS WILL BE HELD BY END OF YEAR***
Congress is now calling for more transparency and accountability with the SEC (Securities and Exchange Commission)--Wall Street. A measure to be sure that the capital is there.
Another newsworthy item that is interesting to me is that a General Motor’s representative told yesterday that GM is lowering their standards on credit scores to be able to make more loans for autos and sell more. This is curious to me as this just puts more bad paper into the economy, just like the housing markets did.
Where will this end? There is no end in sight for the current period.
Good news….CEO of J P Morgan announced today that he believes that 30% of the “hedge fund business” will be going away. Hedge Funds and short sellers cannot be watched at all and this is part of the big problem right now.
It seems that everyone involved has two black eyes, as you know Freddie Mac and Fannie Mae definitely have with me.
There are many indicators involved in our economic situation. Fuel prices lowering will definitely help. Watch the commodities markets. (such things as oats, wheat, oil, steel, corn, sugar, and farm stock.) These are definite indicators.
There are two schools involved in measures being taken to correct the problem. One says government stay out and let the economy correct itself. The other school says we would fall without government intervention.
The major obstacle is that this is not just the USA, it is global.
We all over spend and credit card debt is one trillion dollars today much of which will also result in bad paper in our already faltering economy.
My advice to you is this:
1. Watch your investments daily. You can no longer afford to be a long-term investor, as those days are gone.
2. Stop excessive spending. Fix your old car and drive it.
3. Stop putting money INTO your 401K just until the first quarter of 2009. Put the money you would normally put in into a savings account at the bank.
4. Start gathering deductions for your tax return. Really work on it this year. Donate before the end of the year and get receipts. Remember on medical expense that you can claim medical even if the person is not your dependent.
5. Work hard and remember this is America and we will pull out of this crisis.
6. Please refer to our steps in the previous newsletter this week.
Business and corporations please seek our advice on your tax planning for year-end.
Please continue to check our web page at www.razorbackfinancial.com for updates.
Thank you, Lynda H. Startzman
