It's been a busy year and it's almost over

Well so much has happened this year, and we last blogged you in June. I'm sorry, so just throw a shoe at me. I'll try and make up for it with a longer than normal entry here that covers a lot of ground.

While we're only about 30 days from President Bush leaving office, the economy has yet to completely collapse, but it's come close.

After last week's President Bush incident in Iraq and in honor of the recent DVD release of Get Smart, The Secret Service has announced that they will all be carrying the next generation in protective & communications devices. The sneaker phone. It is a cellular phone connected via Bluetooth to the earpiece the agents wear. It can also be thrown as a short range tactile weapon and detonated remotely from the ear piece.

They are made in Mexico and in accordance with NAFTA will not set off the airport detectors as you enter Canada. I'm told the President likes them just for plain old jogging, and his dog Barney likes to chew on them. Barney was of course a gift from New Jersey's own former Governor Christie Whitman.

Now that you've been warmed up with my politically dark excuse for humor. Let's talk about some important financial stuff. Where should we start first?

Interest rates are always a fun subject. With the economy the way it is, the Treasury and the Federal Reserve have conspired this past week to send interest rates even lower via a federal funds rate pegged between 0% and .0025%. Huh? this is like free money. Yes, and that's what the banks need right now. However, many of them continue to horde it rather that lend it out to you.
The government's plan doesn't work so well if that happens. Banks and institutions are supposed to be lending that money so that people buy cars and other items and get the economy moving again. So if you need a new car, get out that and buy one. We hope you'd consider buying an American car and support our country and its workers.

A friend of ours recently traded his Ford Fusion in for a newer model, figuring the deals were great right now, he'd get a good number for his 3 year old trade in, and he'd support our workers.

I congratulated him on his purchase and in supporting the Mexican economy as the vehicle is made in Hermosillo, Mexico. Hopefully it at least has some American-made parts in it. I know it's at the tops of vehicle reliability as are most Fords, something generation X & Y choose to ignore. If you don't want to believe me, check with Consumer Reports, their annual April Auto issue is the bible of auto reliability ratings. It contains historical real world data coming directly from owner/subscribers. It has little good to say about the overall reliability reports of GM & Chrysler Products . But I certainly wish them well and hope someone buys their cars too.

Dealer's business (including non-U.S. brands) have been severely impacted by the credit crunch. You can't sell or lease cars if buyers can't finance them. At the same time, those of you with money in the bank (or any viable investments left) face the implication of Fed-induced low rates of return. Maybe it's time to look at some fixed annuities with insurers who's A.M. Best financial strength rating hasn't been totally trashed. Sometimes I think that putting your money under the mattress will return as a fad. Besides, they fit so nicely in tight parking spaces where those SUV's can't go.

There is a positive downside to the lower interest rates. You may be able to refinance your home at historicallly low rates, at or below 5% for a conforming 30 year mortgage. Don't wait, we don't know how long this sale will last. And of course, before you take such a step, be sure to check your credit report with the big three credit reporting agencies. Citizens in many states are entitled to do this once a year for free. Visit annualcreditreport.com. Don't be fooled by other sites that sound similar and NO, you don't have to pay for this or buy any money costing extra services.

On to taxes. Year end advice: If you have stock or mutual fund losers outside your tax sheltered retirement accounts , you can sell them at a loss and offset any gains for 2008. You can write off up to $3,000 more than your gains (married filing joint or single filing status).

As we let a few of you know already, AARP was on Congress's case to suspend the 2008 required minimum distributions (RMD) from retirement plans and IRAs. This was a great idea since investment values have crumbed and the amount to be distributed is based on the prior year's end total account balance. The result being that some retirees would have to take out a big chunk of what's left. Congress tried, but they fumbled the ball (just like the automaker bailouts). They made 2009 the year they would freeze the distribution requirement. Sorry Congress, too late and wrong year. Thanks for nothing. In fact, they may have made it worse. If you forgo the 2009 distribution, you may have to distribute more in 2010. As for the fear about next year's tax rates being higher under President Obama, it looks like that is on hold with the current economic situation. Current Bush reduced tax rates implode in 2010 anyway when the old tax law re-assert themselves automatically.

Happy wishes in the Holiday Season for a better economy in 2009, more jobs, and a Congress and President that can get the simple things right, and tackle the hard ones without coming out looking like bumbling fools.