June 11, 2008 - San Gabriel Valley Examiner

B4 S.G.V. EXAMINER
June 5 - 11, 2008
In just eight months, the Federal
Reserve has cut the Fed
funds rate 325 basis points
from 5.25% to 2.00%. It has
opened the discount window to
securities companies, created
the temporary auction facility to
allow banks to use the discount
window without negative implications,
added term-lending to
banks, auctioned hundreds of
billions of their Treasury holdings
in exchange for mortgage
backed securities and arranged
the sale of the nation's fifth-largest
investment bank (Bear
Stearns), acquiring $29 billion
mortgage portfolio in the process.
After all that, it should
come as no surprise the Federal
Open Market Committee is
ready to wait and see what happens
before committing to their
In In A A Nutshell
Nutshell
What’s up in the Economy?
Julia Yoder
KEN HERMAN
Economic Analyst
Financial — Ask Julia
FINANCIAL
Agreed: Fed On Hold, But For How Long?
How can statistics show that
Consumer Spending is higher
than expected?
Sometimes the whole story is
not shown by statistics. Of
course the Consumer Spending
is higher - just look at the price
of gas and food. A big problem
is that folks are having to
borrow more to pay their expenses.
Statistics show that the
price of houses are considerably
lower. Some of that might be
due to the fact that many more
lower priced houses are selling
than higher priced ones
What's happening with
mortgages?
As you know, the current
conforming loan limit has been
raised from $417,000 to
$729,750 in high-cost areas like
our area. The higher limit ends
on Dec. 31, 2008. Interest
rates are hovering between 6.5
and 7 percent for jumbo loans.
On June 1, maximum financing
up to 95 percent loan-to-value
will be allowed.
I have two homes, one in
California, and one in Florida.
Am I free to decide which one
to claim as my "primary residence"?
Be honest. Which one do
you really live in? Hint: It's
probably the same state that you
have your driver's license, and
you're probably registered to
vote there, too.
How does California stack up
when it comes to health care?
According to a report by the
California Academy of Family
Physicians, even though California
spends more than $170 billion
a year on healthcare, the
health status of California residents
ranks 23rd among U.S.
states.
I'm a single mom with one
child and it's really hard to
make ends meet. Any ideas?
There are many budget-wise
ideas that everyone can use. You
are probably already doing some
things that others might not have
thought of, yet, so make sure
you share ideas with others.
Keep your eyes and ears open
for opportunities to save.
Watch the store ads and shop
where you get the most for your
dollars. Clip, organize, use, and
share coupons. Make time to
think of ways to reduce spending.
Do without that luxury
item, style your own hair and
do your own nails. Freshen
dry-clean only clothing with a
dryer softener sheet and a few
minutes in the dryer. Check
with your utility companies for
ideas and offers. Change phone
plans. Cook in rather than eating
out. Combine errands to reduce
mileage and gas usage.
Consider this: a typical latte
costs $3.59 for 16 oz. That's
22 cents per ounce or $28.72 a
gallon!
I'm self-employed, so my
income fluctuates radically.
How can I budget better?
Regardless of the flow of
your income, you have monthly
bills to pay. On those months
that you make more than you
need to pay your bills, you must
next course of action.
Wall Street continues to think
the Fed's next move will be a
rate cut, but not until the fourth
quarter of this year. It is widely
believed that with the uncertainty
still evident in the
economy and in the capital markets,
the Fed has left the door
open with concerns continuing
have the character to save the
excess for a month that is lean.
In the meantime, cut back your
expenses wherever you can,
and prioritize your bills, paying
the most important ones first.
We make a certain amount
of fixed-income, and pay our
bills, but have nothing left to
invest. We just inherited a
couple hundred thousand dollars
through a life insurance
policy. We'll probably put it
into some CDs while we figure
out what to do with all that
money. What do you suggest?
It's refreshing to hear from
someone who hasn't made plans
to spend most of the money as
soon as they get it! It's certainly
fine to put the money into
short-term CDs to give yourself
time to learn and make decisions.
(Remember that FDIC
only insures up to $100,000 per
institution, so put your money
in two or more different banks
or credit unions.) I'd be happy
to sit down with you, answer
your questions, and discuss
your options so you can make
suitable and wise decisions.
We're thinking about looking
for a bargain of a house.
Do you have any guidelines?
It is a good time to buy, even
if housing continues to drop a
little more, historically real estate
increases in value. A home
is a type of investment, but until
it is paid for, it is a liability.
Typically real estate at least
keeps up with inflation. And,
by keeping your home as your
about inflation threats and
threats to growth - somewhat
of a catch 22! Let's not forget
that it could take as much as 18
months for the impact of rate
cuts to be felt, and the latest
economic data suggests that
economic activity is flat. The
Federal Reserve acknowledged
on The Street that it has cut its
2008 growth outlook for the
second time in many months.
TO BEAT INFLATION -
Obviously, the Fed has three
choices: raise interest rates -
keep interest rates unchanged -
or, lower interest rates (further).
Consider the mechanism
through which interest rate
hikes work on inflation. When
interest rates go up, credit
growth slows, economic
growth slows coincidentally,
primary residence for a minimum
of 2 years, you can gain
$500,000 as a married couple,
(or $250,000 as a single) without
paying tax when you sell!
When you buy, also purchase
title insurance. If a problem
arises with the title - like someone
claiming that they have a
will that states they were supposed
to inherit that house - title
insurance will pay to clear it up.
Your offer on the property
should be written up as to be
contingent on the results from
a home inspector and the appraisal.
And, remember there
is great importance in location,
location, location. A poor floor
plan is a lot harder to remedy
than landscaping, paint, and
decorating.
Whether you are planning to
find a new place to rent, or a
residence to buy, there's a big
advantage to using a Realtor
who is educated and familiar
with the whole process.
Get a FREE personalized
Wealth Index report. All you
have to do is go to:
www.wfgnetwork.com/julia ,
click on Wealth Index, and take
the confidential national survey.
It's free if you use the code:
WFG123. If you do not have
internet access, contact me by
phone and I'll get a paper version
of the survey to you. As
my way of saying "Thank you"
just for completing the survey,
I'll give you a coupon for a 3
day/2 night vacation.
Got a question? Ask Julia
by email or phone.
Julia Yoder is a licensed Servicing
Agent for individual,
family, and senior finances and
insurance, a licensed Realtor, a
Sr. Loan Officer, and Notary.
www.WiseInvestorsNetwork.com
, 1-877-802-8569 or (626) 625-
5221, or juliayoder
@WiseInvestorsNetwork.com
(CA Insurance Lic.#0C83859)
Member of the National Ethics
Bureau
Truck Rental Company
First to Offer GPS Devices
AZUSA — In an effort to
make moving even easier and
more manageable, where2(r)
Global Positioning System
(GPS) navigation devices with
guidance by Garmin(r) are now
available at Azusa-area Budget
Truck Rental locations.
"Moving can be a stressful
and emotional time for many
people," said Donna Mckeon,
Dealer Performance Manager of
Budget Truck Rental in Azusa.
"Reaching the destination should
be as easy as we can possibly
make it. As experts in moving,
we know that offering do-ityourself
movers an easy-to-use
GPS navigation system will help
make this important transition
that much easier. We're very
excited to be the first consumer
truck rental company to bring
GPS devices."
where2 is fully portable and
can be used in any Budget truck,
from cargo vans to 24' trucks,
and with any type of rental, including
one-way, local and
commercial rentals. The device
offers Budget Truck Rental customers
an array of navigation
features, including truck routes,
local points of interest such as
ATMs, hotels, restaurants and
gas stations, a simple user interface,
three-dimensional
maps, audible turn-by-turn directions
spoken in multiple languages
and Bluetooth handsfree
calling capability.
Quantities of Budget Truck
Rental where2 units are limited.
The GPS device can be rented
at Budget Truck Rental locations
throughout the United
States for $11.95 per day or
$59.75 per week.
the job market deteriorates, income
growth stalls - both personal
and corporate - and any
attempt to raise prices is met
with a decline in sales. The reverse
occurs when the Fed
loosens credit or lowers interest
rates (stimulates the
economy).
What is most interesting is
that when credit growth
tumbled last year when the
mortgage bubble burst, economic
growth slowed, there
were job losses in the last four
months and real personal income
growth collapsed from
4.0% to less than 1% in six
months. Corporate income
growth has been negative for
two quarters.
In other words, the collapse
On May 13, the Glendora
Chamber of Commerce held a
ribbon cutting ceremony to
welcome one of its newest
members to the Chamber and
the community. In attendance
to welcome owner Josh
Machado to the City was
On Wednesday, June 11,
from noon to 1:30 pm the
Glendora Chamber of Commerce
Legislative Action Committee
will host its sixth speaker
forum with representatives
from the Edison Company, the
Gas Company, the Metropolitan
Water District, Athens Services
and Waste Management. We
invite you to come and learn
how to save money on your
energy costs and what our utility
companies are doing to "provide
resources while protecting
the environment." The panel
discussion will be followed by
a brief question and answer session.
Please note that this months
forum will not be held in the
Glendora Unified School District
Boardroom, but is being held at
Citrus College in the Louis E.
Zeller Innovation Center located
at 1000 E. Foothill Blvd,
The San Gabriel Valley Examiner
of the mortgage bubble was the
tightening The Street needed
and wanted to curtail inflationary
worries; this occurred even
as the Fed was lowering interest
rates.
THE FED'S NEXT MOVE -
It is widely expected that The
Fed's next move will be further
easing or lowering of interest
rates - but, until then, consider
the Fed to be on hold. Why you
might ask? For one thing, GDP
growth currently is positive, although
it is very slow at 0.9%
annualized in the first quarter,
raising the possibility we could
actually bypass a full-blown recession.
That would be really
nice!
Ultimately, however, credit
growth will reaccelerate only
Glendora Mayor Karen Davis
and Councilman Ken Herman,
Chamber President, D.J. Jafari
and many Chamber Ambassadors.
Located at 1780 South Barranca,
(at the corner of Barranca
and Arrow Highway),
Glendora Chamber of
Commerce Utilities Forum
Glendora.
The Forum is open to all
Glendora Chamber Members as
well as the general public. A
catered lunch is included in the
admission price of $10. For
those individuals wishing to attend,
but not have lunch, the
price is $5.
This monthly event features
elected and public officials representing
the Glendora community
addressing legislative issues
and concerns of the small business
owner and residents of the
city.
We invite you to attend this
most informative seminar. To
make a reservation or for more
information, contact Valarie
Thompsett, Administrative Assistant
at the Glendora Chamber
of Commerce: 131 E. Foothill
Blvd. Glendora, CA 91741
(626) 963-4128 or e-mail
valarie@glendora-chamber.org
when financial entities regain
each others trust and for households,
home prices stop falling.
This is likely many months
down the road.
In the meantime, the stimulus
checks you recently received
should lift consumption growth
for a few months, with increases
of as much as 1-2% in
both July and August. After
which, consumption will fade
again and the Fed will be faced
with lowering interest rates to
further stimulate growth.
SHOP GLENDORA FIRST
- THIS IS THE TIME OUR
MERCHANTS NEED US
I welcome your questions and
c o m m e n t s :
kenherman46@hotmail.com
Chamber Welcomes Toy Hideout
Toy Hideout is dedicated to providing
the hottest toys and
coolest collectibles that are
available now, as well as the
past 30 years. They have created
a one stop shop for all the
toys and collectibles that are
impossible to find at affordable
prices. Toy Hideout is a fun,
entertaining and enjoyable experience
where your business is
truly appreciated. They welcome
you whether you are just
stopping by to purchase a quick
action figure or staying and enjoying
the beverages, movies
and video games. Toy Hideout
is also proud to introduce their
own line of products that allow
collectors or children to display
their collections in a never before
available way. With the introduction
of Mini Mag Stands
and Displays, they are revolutionizing
the way collectors can
display their action figures or
favorite collectibles.
Stop by today to check out
their great selection of toys and
friendly service. Toy Hideout
can be reached at (626) 339-
8697. It's a great place to shop
for that Birthday gift or that
special collectible for that someone
special.