October 2008
Issue: 62
Welcome
 
Greetings!

The news keeps coming out faster than Wall Street can digest it. Wall Street doesn't like uncertainty. We are feeling the effects of that now.

Back in the late 80s and early 90s there was plenty of scandalous news. You might remember some of these stories.
  • The crisis of the Savings and Loans (S&L) industry.
  • Ivan Boesky was prosecuted for insider trading.
  • Salomon Brothers was caught submitting false bids to the U.S. Treasury. 
  • Drexel Burnham Lambert was driven into bankruptcy in the 1980s by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken a.k.a. "Junk Bond King", who was sent to prison on finance-related charges.
These stories dominated the crisis of that day. This current mess is a re-occurring nightmare from the past. The names might have changed, but the greed hasn't.

From 1986 to 1995, the number of US Federally insured S&L in the United States declined from 3,234 to 1,645-a 50% decline. Ironically, it was due to unsound real estate lending. Many other banks failed for other reasons.

Between 1980 and 1994 more than 1,600 banks insured by the Federal Deposit Insurance Corporation (FDIC) were closed or received FDIC financial assistance.

During the S&L crisis, the government created the Resolution Trust Corp. Now, they want to form the "Resolution Trust Bank". A structure that will buy illiquid assets, mainly mortgage related, to create liquidity within the system.

In October 1987, we saw the markets decimated; however, they ended the year up.

Even through all of this, our nation, economy and capital markets have survived. Even thrived!

We have seen a breakdown of this magnitude before. We will get through this one.

If you'd like to talk, give us a call. Visit our updated website. Feel free to share this email with others.

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7 tips: Surviving a financial panic

It's a bad time for big splurges -- and you probably shouldn't ask for a raise right now -- but it's a good time to find bargains, from housing to stocks.

Read on...

In This Issue
7 tips: Surviving a financial panic
Bank crisis: 10 things to know now
5 tax breaks you can still grab
When to accept a job buyout
You can use the crisis to rethink your broker
Fresh Start 2009
About us
Bank crisis: 10 things to know now

If your bank goes bust, how do you get your money out? Are credit unions protected? What about investments? It's time to get your ducks in a row.

Read on...

5 tax breaks you can still grab

Getting your tax return filed back in April was likely a big relief, but you may have missed some key deductions. Here are common mistakes -- and how to get your money back.

Read on...

When to accept a job buyout

First, you'll need to look at your severance package, health benefits and pension (if there is one). Here's how to evaluate the offer.

Read on...

You can use the crisis to rethink your broker

The upheaval among Wall Street brokerage firms is contributing to a game of musical chairs among brokers, many of whom are moving firms due to takeovers, bankruptcies and the temptation to strike out on their own.

Read on...

Fresh Start 2009

Join Paula Harris for a three day "Wellness Getaway Cruise for Single-Again Women: to the Bahamas February 6-9, 2009. Enjoy morning workshops designed to educate, uplift and motivate followed by relaxing days at the beach. The cruise is sponsored by the National Association for Divorce for Women and Children.

For more info...
About us

WH Cornerstone Investments, LLC provides wealth management services to a select group of clients. Regardless of their background or future vision, all of our clients commit to a plan that targets their long-term financial growth and stability. While some of our clients concentrate on one part of their investment strategy, others opt for a more holistic approach.

WH Cornerstone clients demand customized objective, expert advice, which they know can come only from a firm that is truly independent-a firm not tied to financial institutions. As an independent firm, we are completely fee-only and therefore free from any outside institutional influence.

Cheers
,

Paula Harris and Bill Harris, CFP
WH Cornerstone Investments
781.934.9154
www.whcornerstone.com