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Jim Lentini: Financial numbers keep changing

Posted: February 2, 2009 9:07 p.m.
Updated: February 3, 2009 4:55 a.m.

Jim Lentini

 
We have some interesting numbers that will affect all of us as those in charge attempt to correct and replace what we have lost through this financial crisis.

Following are some of the latest statistics and issues that we and our state and federal government departments will be dealing with:

* California update: Governor Schwarzenegger warned Jan. 15 that we could become insolvent "within weeks". California is anticipating a $42 billion budget deficit over the next year. If California was a country, it would have the eighth largest economy in the world (source: AP, FT).

* President Obama: The $825 billion economic stimulus package released by House Democrats on Jan. 15 included $550 billion of anticipated public spending (funds for education, health care, infrastructure) and $275 billion of tax cuts. (source: Wall Street Journal).

* Payback: Every $1 billion spent to upgrade the country's infrastructure creates an estimated 18,000 jobs, according to an economist from the University of Massachusetts (source: BusinessWeek).

* Bank-owned now: U.S. banks foreclosed on 850,000 properties in 2008 (out of 127 million housing units nationwide), more than twice the 404,000 foreclosures from 2007 (source: USA Today).

* Good for homeowners: in an attempt to drive mortgage interest rates down, the Fed will buy $500 billion of mortgage-backed securities during the first six months of 2009. The plan ("Government Sponsored Entities Purchase Program"), originally announced on Nov. 25, 2008, will result in the government buying securities guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae and Federal Home Loan Banks (source: USA Today).

* Auto business: Total car and light truck sales are projected to be 11.5 million in calendar year 2009, down from 16.1 million in 2007. That equates to 12,600 fewer vehicle sales nationwide per day this year when compared to just 2 years earlier (source: FT).

These are a few of the issues affecting our lives for the foreseeable future.

How will these nationwide issues affect you, your business, and families future?

Discuss your financial picture, personal planning and business projections with your financial advisor and adjust accordingly. It could be time to consider some guarantees in your retirement portfolio that grows more than the cost of living.

Jim Lentini, CLU, ChFC, IAR is President of Lentini Insurance & Investments,Inc. He can be reached at (661) 254-7633. His column reflects his own views and not necessarily those of The Signal.

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