[stockstradr]

I visited a home recently in another less “prestigious” town …

San Jose is considered a less prestigious area of the Bay Area, and home prices are DROPPING here, but not yet as dramatically as seen in San Diego.

One data point I have is for condos in North San Jose, once priced at $310k, have fallen to $290k. This info came from co-worker who says he’s been watching the market very closely.

We will continue to rent, and let prices fall. We rent in the Willow Glenn area of San Jose.

[stockstradr]

I visited a home recently in another less “prestigious” town …

San Jose is considered a less prestigious area of the Bay Area, and home prices are DROPPING here, but not yet as dramatically as seen in San Diego.

One data point I have is for condos in North San Jose, once priced at $310k, have fallen to $290k. This info came from co-worker who says he’s been watching the market very closely.

We will continue to rent, and let prices fall. We rent in the Willow Glenn area of San Jose.

[stockstradr]

Thank you for posting link. Yes, it is a brilliant article.

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For those who had to post their nasty flame posts into this thread…

The post was just a joke. Get a life. Get a sense of humor. This has always been an “edgy” forum where threads like this one are par for the course.

You want my tears, and sympathy for who? For a few multi-millionaires living in La Jolla who bought homes on a mushy landslide prone hill? Give me a break.

And no I wasn’t seriously suggesting this landslide will hurt La Jolla housing prices.

[stockstradr]

Thanks everyone for posting great responses.

Thing I love about this wacky forum is that it is obscure enough that it attracts a smart, savvy crowd, with opinions worth reading

[stockstradr]

Great article, and I love that nickname for 4S Ranch, “4Closure Ranch”

We used to rent right in that area so we remember the peak and walking through show homes priced at $750k. With prices at $550k (and not selling) they are either back to 2003 prices, or damn close. Incredible.

[stockstradr]

Rich,

great post. Thanks for sharing your valuable opinion!

[stockstradr]

I have accounts with E*Trade, OptionsExpress, and Fidelity, and also several family members have experience with TD Ameritrade

E*Trade:
I’ve been using E*Trade for ten years now and am extremely impressed. The only minor drawback if I recall correctly, E*Trade doesn’t have access to some of the mutual funds offered by Fidelity

Fidelity:
On several trades I initiated one hour before market close, delays with phone call-in and probems with Fidelity online prevented my excuting those trades before end-of-day. This gives you an idea of serious I found Fidelity system and service delays

When I tried to sell online a mutual fund I had purchased from Fidelity online, their system responded “you cannot trade this mutual fund online.” Then I called in I was put on hold on their trading line for over 45 minutes. That trade ended up excecuting the NEXT DAY at end-of-day. By coincidence, at the same time I sold the exact same mutual fund (on the day I wanted to sell it) through E*Trade in 2 minutes.

I lost three grand due to Fidelity because as I expected market moved against my fund the next day, and their delay forced me to hold that fund during that down day. I have since moved the 1/3 of my portfolio I had in Fidelity into E*TRade.

TD Ameritrade
My father and sister use this broker and are happy with it.

OptionsXpress
Great if you love to trade options. More options trading software than you’ll find at E*Trade.

[stockstradr]

Total value of all gold ever mined is somewhere around $3 trillion at current prices. For comparison, total liquid net worth of all Americans is $30 trillion.

Yes, and the part I love is China’s $1 trillion in Forex reserves (represents a large sum relative to total mined gold)

If China ever decides a significant portion of its Forex reserves should be held in gold, we better hope we are holding gold in our portfolios and not holding dollar-denominated securities!

[stockstradr]

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

You are right. That is a brilliant article, and one I think is worthy of deep reflection, in terms of repositioning one’s portfolio.

Thanks for posting that link!

[stockstradr]

I ask myself this straightforward question:

“Do I think over the last five years, the average actual price inflation has been 3% on the basket of items my family typically buys?”

That’s what our government claims, based on CPI.

What a joke!!!!

http://www.bls.gov/cpi/

(At that web site click on “Inflation Calculator” link)

[stockstradr]

TIPS can be seen as a smart move, but I have hesitated, for the following reasons..

Many think the CPI is total bullshit, perverted more and more with each “revision” as part of a conspiracy to under-represent true inflation so our government can inflate its way out of national debt. Foreigners holding our debt must be tricked into thinking our inflation is lower than actual.

Additionally, the dollar continues its long painful decline on international currency markets.

Here is an example. You hold TIPS for five years. China decides to unlink from the dollar and let the RMB roam free. So let’s say the RMB-$$ exchange rate moves 50% against you. Many respected economists do think the RMB is 50% away from its true unrestrained floating market rate. On a fixed rate control, the commies already allowed it to move 10% in that direction in last 4 years.

Now you cash out your TIPS. Think about what will have happened over that five years to the price of every Chinese made product (pretty much 90% of what’s in our retail stores)? Effectively the value (to buy foreign made goods) of those TIPS funds will have fallen dramatically.

I have friends (Chinese) who are moving money into China, and buying CD’s from Chinese banks. The interest rate kinda sucks, but the long-term exchange rate trend is going to prove out their wisdom.

Over the last five years we have moved over half our assets into China. We own property in China not in America. We have savings accounts in the BoC. I don’t think you want your money in dollar-denominated assets.

You are investing in our government at a time when foreign nations are realizing the US is no longer a credit risk worth investing in! America is a junk bond credit risk.

[stockstradr]

one more thing.

Today I increased my SHORT position on oil. “DUG” is one way to get 2X inverse exposure to oil.

Go ahead. Laugh. Consider me crazy for shorting oil. However, understand this is not a long-term position. I see oil going below $50/bbl within 24-36 months. Beyond that time frame oil prices are headed up.

Recession is at our doorstep. Worldwide oil demand is already falling. Every damn hedge fund and foolish investor has loaded portfolios heavy with energy. I’m a Contrarian.

It is time to short oil.

When the recession takes oil prices below $50/bbl, then it will be time to close those short positions and BUY BUY BUY because of course the long-term trend is UP.

[stockstradr]

I bought gold yesterday, 5% of my portfolio.

I see a correction coming, yes. However, I bought because I’m sick of watching myself use the “I expect a correction in gold prices” as an excuse to avoid buying gold.

I cannot hesitate any more. Way back at $450/ounce I did the research and concluded gold was headed for $1,000/ounce in five years. So far it looks like I was right, but I missed making money on my prediction.

So finally I bought and I’m going to just hold that gold, even if we see a correction back to $640/ounce levels. Instability in global markets and flight from the dollar are the primary reason money will move into GOLD.

[stockstradr]

A quick story for those thinking of selling now. A friend of mine lives in Minnesota, a nice quiet midwestern state many believed would be least affected. He put his house up for sale 9 months ago. He had to. He accepted a job offer taking him to the Bay Area.

Back then I told him, “Sell NOW at any price you can get.”

But he chased the market down. What do you think he said to me last week?

He said that 6-9 months ago the market may not have been great, but at least you could sell a house for a low but reasonable price.

He wishes he had sold. Since then he has seen the housing market fall off a CLIFF.

He says “the real estate market is completely locked up, frozen with no signs of life because people cannot get loans. Prices are dropping so fast the appraisers don’t know what to do, and the loan officers are SCARED to approve anything.”

IF you can find a comp that sold in the last 30-days, you price 10% under that and still NO OFFERS, or lowball offers that fall through because nobody can get a mortgage approved.

My friend emphasized that VERY FEW people with good credit are house hunting (those with solid credit and down payments already own a home, or are smart enough to have sold and switched to renting)

That’s the housing market up in quiet sleepy Minnesota. California is much worse.

It is too late to be thinking about selling. We are too deep now into this housing crash. The next 36 months are going to see the worst housing hell in over fifty years.

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