Vinny’s Blog

Yesterday’s topic was ‘where are we heading ?’ which was more to the tune of as a company where are we heading. Then someone asked me hell with that….where was he heading financially ?

Good question…and I only hope you’re ready for an answer..because this ain’t pretty for sure. Answer is not just for him but for me and you and all others.

Before I begin let me say this - I am no expert in fortune telling, since I don’t know how you fund your investments but, based upon a lot of reading I do I can probably help you understand where it’s heading in short term or near term. I am only painting a very broad picture here. It’s sort of a profile if you don’t fit in this it’s good….believe me you don’t want to fit in this profile.

Enough said, let us get cracking on this.

If you live in N.J. than it’s not a news to you that property taxes in NJ are highest in the nation they average about $6,800 per year. Yours could be more or could be less but, this is the average. The bigger and expensive your house is the more you’re going to pay in tax…smaller ones will pay less. Property taxes in NJ were increased by 5.4% just last year. If you did not know all this I suggest you start paying close attention to state news as you will be in for heck of a ride pretty soon. ( http://www.businessweek.com/ap/financialnews/D8VKHQ580.htm )

Believe it or not but gas prices are lower in our state when compared to other states however that is about to change. State is considering increasing the gas tax by 45%. (http://www.nj.com/news/index.ssf/2008/03/lesniak_predicts_45_percent_to.html )

I hope it’s not a news to you but OUR STATE IS IN HUGE DEBT $30 billion to be exact ( http://www.state.nj.us/frdr/ ). And guess what –you’re going to pay this debt one way or the other because you live in the state. [ Every man, woman and child in New Jersey owes $3700 toward paying off the debt. If you add in the state's long-term obligations, that amount skyrockets to $16,000 per person! http://saveourstatenj.com/ ] Since this is an average in actual practice if you earn more will pay more and if you earn less proportionately you will pay less.

Corzine who is our (NJ’s) governor has decided that he will not increase property tax any more because it’s highest in the nation alreadybut he is now debating that cities and towns should be allowed to collect their own tax in addition“ get it ? either way you will be paying more in taxes because of this new tax coming.
( http://www.businessweek.com/ap/financialnews/D8VKHQ580.htm )

I don’t need to tell you where wall street is going - if you’re expecting any bonus or raise ( for 2008) you need to re-consider that thought .

Finally how does all this work for you ? Let me summarize it “

1. Your income is not going up. No salary increase - there was none for 2007.
2. Your bonus lucky if you get some. It’s better not to count on it. I won’t .
3. Your expenses in 2008 are going UP simply because of inflation.
4. Your property taxes WILL INCREASE FURTHER.
5. You Gas bill WILL INCREASE FURTHER. And so the price of everything you buy (inflation).
6. Your electric bill is going up by as much as 12% this summer starting June. ( http://www.nj.com/news/index.ssf/2008/02/electric_bills_slated_to_rise.html )
7. Since feds have cut interest rate again. Check you next bank statement all your money market fund, or savings fund and CD which get mature and roll over WILL BE EARNING LESS.
8. Dividends they are reducing check your monthly pay stub you’re getting less in dividends on Citi stocks you own. I won’t be surprised if they eliminate them completely before the year (2008) ends. (http://www.mortgagenewsdaily.com/1152008_Citigroup_Writedowns.asp )
9. Citi Stocks “ They are worth less than what you were awarded for so selling them to raise money “ forget it.
10. If you rent a house instead of owning it. No good news either as the local tax increases rent will be increased accordingly.
11. Home values have gone down. You might not be in a loss because that depends on what price you paid and what’s the price today. But whatever is the price today it’s less than the price it was yesterday. ( *See below )

* Home price/demand trend in NJ is going south-

Following a disappointing January when contract-sales were off by 30%, February home sales were down by 21% compared to the same month last year. This leaves year-to-date contract-sales activity 25% below last year at this time, making it the worst start for home sales since the housing recession began in 2005. ” Source : http://matrix.millersamuel.com/?p=1489

So far it looked like that falling house prices were causing all these problems we hear about in the media. And felt like government was ready to do anything to protect house prices from falling…..but what if top level people start to actually say that house prices must fall further ? and I am not kidding this actually just happened (yesterday) read below I underlined what I just mentioned to you.

“The US Treasury Secretary gave warning today that there is more pain ahead in the American housing market after he said prices must be allowed to drop before the economy can stabilise.” and of course you can read the whole article here (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3627054.ece)

I really don’t have a good news at this point to make you feel all that better but if this is any consolation. What if I told you that (Fed Chairman) Ben Bernanke’s own house has lost value and is probably now worth less than what he paid for.

The value of Bernanke’s home “probably went up to $1.1 million and it’s probably back down to $840,000,” because prices in Washington just a couple years ago “got out of control,” Wheaton said. again you can read all about it here. http://www.bloomberg.com/apps/news?pid=20601109&sid=a_SQurUfHic0&refer=exclusive

Again if you don’t fit this profile it’s good…..but if you do fit the profile.

Then “ Your expense are heading north. Your finances are heading south. Throw in the mix a weak dollar and your ride to south pole is further accelerated.

If you are sort of mute at this point because of what you just read and are completely unable to speak it’s not all that bad….because what you’re going to see next is something that will allow you to talk being mute…this next break through in cell phones is only the beginning and as you know technology only gets better over time. So, what you’re looking at today is a technology promised to be delivered tomorrow.

http://www.youtube.com/watch?v=xyN4ViZ21N0

-Enough news for one week……I am on my way to Washington-DC for a short vacation…where I plan to take a lot of pictures (this is another hobby of mine, in case you did not know I actually do take good pictures). If you haven’t seen my work please visit http://www.diwakars.com I have added some new tricks there. If you haven’t checked it since my last update you might like the new stuff I posted it’s toward the end. ClickHere

- Anyway, if I can get my hands on a computer tomorrow, I will try to make you smile.

Notice the keyword here is TRY..knowing where you work this is best I can do otherwise I could have said ” I promise to make you smile. ”