[asragov]

Scripps Ranch is worth checking out – easy commute downtown via 15->163 and into La Jolla by 52. It is an area with excellent schools and a lot of families with children.

If you get anything from this board, you will want to SERIOUSLY consider renting. As we see real estate prices continuing to fall, buying seems like a losing proposition in many ways.

For $3,000/month, you should be able to rent a very nice, very respectable family home in Scripps Ranch.

I think that the traffic getting in and out of Carmel Valley is horrific, but to each his own.

[asragov]

As the kind folks at Minyanville remind us (link below), banks and homebuilders are getting crushed. The section “too broke to sell” is another interesting note on how current market problems affect sellers without enough equity to close ….

“Biotech, Defense, Healthcare, Metals and Mining, Energy and Telecom” are doing well, thank you very much.

Although returns have been great recently on energy stocks, I am not so sure that is good news ….

http://www.minyanville.com/articles/Citigroup-S%26P-Dow-Nasdaq-Inflation-Lennar-Minyanville-Five+Year+Anniversary/index/a/14297

[asragov]

It looks like the $848,500 price in 10/2005 was when it was purchased from Pardee, so I don’t think that there is any more history than that.

The original list price was $762,500.

It looks like another case where the 2nd (Wells Fargo for $150,000) was destroyed entirely. The first was for $649,500.

[asragov]

Depending on how active of a trader you are, these guys might be good for you:

http://www.mbtrading.com/

[asragov]

You might like to read Minyanville’s article on the past, present, and future of gold.

It is excellent:

http://www.minyanville.com/articles/gold-gld-nem-asa-gss-dollar-fed-greenspan-housing-mrb-uxg/index/a/14027

[asragov]

SDR-

“It will not affect prices” is not the “wrong response”.

The basic point is that our government is not effective enough to even marshal a token response, much less one that will cost us much money or affect prices. It is able to divert our resources to stay in a state of perpetual war, sell public lands and property cheaply, and to inflate the currency, but the mortgage mess is a much more difficult issue.

At the local San Diego government level, there is simply gargantuan incompetence. At the federal level, there will be far less money spent than on Iraq, interest on the debt, or is lost through inflation.

It is very hard to figure out who exactly needs to be bailed out – homeowners are certainly unlikely beneficiaries. I do believe that the risk is much more diffuse this time around, vs. the RTC days (to include European investors, Asian sovereign funds, etc. etc.), so a concentrated bailout is hard to picture.

The bulk of the losses I believe will be sustained by individual homeowners, banks, and investors. Taxpayers after that, because the problem is too complex and difficult for government to deal with:

http://www.cnbc.com/id/20720037

[asragov]

The problem is too big, and the wheels that are in motion cannot be reversed. Governments will not be able to prevent the inevitable.

San Diego’s government probably doesn’t even have the money to put the telephone lines underground – they will not have any meaningful money for this.

San Diego homes will not be worth what they were during the bubble times for a long, long, long time, and there is nothing a government, local or federal, can do about it.

Government is too inefficient (i.e. they will recognize and act on problems too slowly). Even when they begin to act, it is unlikely to have much of an effect on prices.

[asragov]

The Economist’s Big Mac Index is a classic for looking at over- and under-valued currencies:

http://www.economist.com/finance/displaystory.cfm?story_id=9448015

Choices like FXE are not likely to be available in a 401k. You’ll have to wait until you roll over your 401 to an IRA.

[asragov]

Shorting is risky.

You hopefully are very well aware of what is going on in the oil industry to make such a bet.

Very smart, connected people, even the ex-Chairman of Shell (see link), see significantly higher oil prices ahead.

http://www.hemscott.com/news/latest-news/item.do?newsId=50047106624331

Also see:

http://www.energybulletin.net/34860.html

Will a recession in the US stop the growth of demand for oil in China? The US is only a small market for China’s exports, so, probably not.

The basic “peak oil” theory is that reserves in the Middle East are much lower than what is claimed, and that production of other fields is now peaking, while demand just keeps growing:

http://en.wikipedia.org/wiki/Peak_oil

Good luck with your trading, but be very careful!

[asragov]

The leverage in banking works roughly this way (very roughly):

For every dollar that a bank takes in deposits, it has to have have roughly 8 cents of its own money (that is, capital). Capital in this case usually refers to shareholders’ equity.

So, they will probably lend out all of your deposits, but will have to have 8% of their own capital to play the game. This is the leverage, from the point of view of the bank.

If you want to read about this in more detail (there is a lot of detail – it is basically its own science), you can try:

http://en.wikipedia.org/wiki/Capital_requirement

and also

http://en.wikipedia.org/wiki/Fractional-reserve_banking

[asragov]

You guys really think that SEH is a better neighborhood than even the “fringe” areas of RSF?!

This may only be half of the 6,000 square feet, but, remodeled and with 1.5 acres, seems like night and day compared to SEH, in the Covenant:

http://www.sdlookup.com/MLS-071037261-5428_Avenida_Maravillas_Rancho_Santa_Fe_CA_92067

The number of houses on the market in the 92067 neighborhood seems pretty high, so I think that the patient will have their opportunity.

[asragov]

Retail branch banking is one of the most profitable types of banking.

There are branches everywhere to get as many cheap deposits as possible (most checking accounts are not earning much interest, if any).

Everyone’s behavior on how they use their bank is different, but this is one of the ways that banks simply mint money (i.e. paying 0% for deposits and then loaning them out).

Most branches easily capture enough deposits so that the savings on the money that they have covers their cost of operation.

[asragov]

The idea here is to encourage people either to buy SFR or to buy in a condo complex where there are more owners than renters.

It seems like a sound risk management strategy on the part of lenders – renters don’t really have “pride in ownership.”

[asragov]

Jumbo is dead, long live Jumbo!

There are plenty of credit unions, banks, and other players willing to step in to the jumbo breach left by Countrywide, et al. When BofA says no to a super-jumbo 40% LTV loan (real case), there are those among the other 7,500+ banks in the country that will step in.

The market will not be as deep as it was, and 30-40%++ of the people previously getting jumbo mortgages will no longer be successful (sub-prime does not necessarily mean low price!).

So, clearly the market will be hurt, and prices will come down dramatically.

However, given financing ingenuity like piggyback loans (yes, they’ll still do those, on top of a conforming loan), this market will not die. It will just be much weaker than it used to be.

[asragov]

It appears that a lot of the activity is month-end.

It’s still a lot for many zip codes – the high end in 92067 or 92037 is also quite busy.

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