Friday Financial Five – November 30th, 2012

Friday Financial Five – November 30th, 2012

We’re number 49!

Rhode Island’s debt again comes under the microscope after the latest 24/7 Wall Street evaluation of the state’s fiscal management. Rhode Island, already at the unenviable 43rd position in 2011, managed to drop six places. Only California, teetering on the edge of bankruptcy, came in lower. Doctors, attorneys, and people in financial services need to pass tests in order to practice. How about implementing a standardized test for a “Politician’s License”? Those that want to run for office will need to show proficiency in balancing a budget. See the review at: http://247wallst.com/2012/11/27/the-best-and-worst-run-states-in-america-a-survey-of-all-50/

GDP comes in higher than anticipated

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The most recent GDP calculations are in and they’re a better than expected 2.7 percent for the 3rd quarter. The U.S. Commerce department originally anticipated a 2 percent growth rate, but it appears people are spending and housing is in the midst of a turnaround. Congress needs to get on the ball and put a deal in place to prevent an unnecessary impediment to the economy’s momentum.

Housing is turning the tables

October saw sales activity of single family homes in RI increase dramatically over the same period last year. The Rhode Island Association of Realtors released data with a 10 percent increase in the median price. This reflects the continued downward trend in the number of foreclosures, which bog down the bottom end of the pricing scale. Rhode Island follows the national trend, as the 3rd quarter Case-Shiller index showed a 3.6 percent increase in home prices over 2011.

Do cry for Argentina

Argentina becomes the latest domino to drop under the weight of debt. Fitch downgraded the country’s credit level due to an unfavorable court ruling (a ruling which has subsequently been delayed). Check your portfolio for exposure to the country, as it currently has the most expensive debt in the world to insure against non-payment. 

Is the Affordable Health Care Act going to be affordable?

If there’s anything certain about the new health care law, it’s that nothing appears to be certain so far. Looking at a few studies, those that are currently uninsured or uninsurable but having moderate income are probably going to find insurance expensive, even with federal subsidies. Rhode Island’s small business owners that make less than $100,000 in AGI may save significant money by using the exchange and qualifying for subsidies. Take a quick peek at estimated costs using this calculator provided by the Kaiser Foundation: http://healthreform.kff.org/subsidycalculator.aspx

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected]