The
U.S.
economy
is in
poor
shape.
Consumer
confidence
is
declining.
Tumbling
housing
prices
and
diminishing
mortgage
credit
have
pushed
up
borrowing
costs
for both
banks
and
consumers.
Unemployment
is
staggering.
Elkhart
Indiana
has an
unemployment
rate of
15% and
California
is 10%.
Employers
cut
another
598,000
jobs off
of U.S.
payrolls
in
January
2009.
The
latest
job loss
is the
worst
since
December
1974,
and
brings
job
losses
to 1.8
million
in just
the last
three
months.[i]
Foreclosures
continue
to rise.
The
continuing
decline
in house
prices
reduces
homeowners'
equity
in turn
homeowners
are not
remodeling,
causing
construction
jobs to
be
reduced.
Every
industry
is being
affected
by the
housing
crisis
which
has
damaged
household
and
business
spending.
With the
failing
economy,
many are
wondering
if the
banking
system
is safe,
especially
after
the fall
of
several
banks
over the
last
year. If
you have
less
than
$250,000
in a
FDIC
insured
bank,
your
money is
safe.
Congress
has
temporarily
increased
FDIC
deposit
insurance
from
$100,000
to
$250,000
per
depositor
through
December
31,
2009. If
you have
a money
market
account
that is
not FDIC
insured,
you need
to move
your
money to
a
treasury
backed
money
market
FDIC
insured
account.
Suze
Orman
has a
website
where
you will
know if
the
money
you have
in
deposit
accounts
at
FDIC-insured
banks is
fully
protected.
All you
have to
do is
answer a
few
questions.
The
website
is
http://www.myfdicinsurance.gov.
Another
common
question
in this
ailing
economy,
Is your
money
safe in
the
stock
market?
If you
have
time on
your
side,
leave
your
money in
the
stock
market.
When
prices
are low,
you are
buying
low, and
when the
market
turns
around
you will
make
money on
those
shares,
therefore
it being
the best
buying
opportunity.
The
market
will
improve
over
time, it
always
does. If
you pull
your
money
out when
prices
are low,
and then
when the
market
turns
around,
you put
your
money
back in,
you are
now
buying
those
shares
at a
higher
price,
therefore
you
forfeit
the
profit
you
would
have
made
leaving
your
money
in. So
moving
entirely
to cash
is not
the best
strategy
when you
have
time on
your
side. If
you plan
on using
the
money
within
the next
six
months
to two
years,
for a
down
payment
on a
house or
your
children’s
college
tuition
etc, the
money
should
not be
in the
stock
market,
it
should
be in a
CD or
money
market
account.
Currently,
Stacey
L. Morin
holds a
Masters
of
Business
Administration
in
Finance
from
California
State
University
Northridge
and
Bachelors
of
Business
Administration
in
Accounting
from
Eastern
Michigan
University.
Ms.
Morin is
a
Freelance
Business
Consultant
Writer
on the
side.
By
Stacey
L.
Morin,
MBA-Finance,
March
2009
