Games People Play - for big money in this case!

Well, I guess Wall Street showed those foolish folks in Congress who has the power, didn't they? And before that Congress showed those greedy bankers they don't have to rush to their rescue, didn't they? And before that? You can take this pretty far back before you find someone who wasn't being greedy or arrogant or blind. Make no mistake about it - this is a contest to see who really controls the economy in this country. And one thing is certain, neither of the contestants thinks it's you and me. We're just the PR pawns in their power struggle, the folks they both say they want to help while they pick our pockets to line their own, or to grow their power base, or to simply get re-elected.

There. I got that off my chest. Can't do anything about it except tell you how I feel. And if you feel the same way you could tell someone. And they could tell someone. Hey, maybe I can do something about it. But only if you and I team up to do it together. How? Well, here's my suggestion:

Tell your congressional representative to get off his/her duff and get this thing passed! It's a horrible bill except that it's far better than the alternative. Not in the long term, when everything will right itself as it always does; but in the short term the bankers will make our lives miserable if we don't save them so they can lend back to us the money they got from us through Uncle Sam.

But there's more we've got to do. After this thing gets signed, we've got to get our reps to do something really meaningful for a change. We've got to get them to enact real reform in the banking system. Not from the ideas that the banking industry lobbyists or congressional staffers will propose, but from the minds of our best economists and experts on financial systems. So at least one of these two groups has less opportunity to get rich at our expense by finding still another loophole in the banking and securities laws.

Then go to the polls and take care of the other contestant.

As always, I welcome your comments.

Huh? What's he taking about?

A Wall Street Journal reporter wrote a piece on hedge funds looking to find bargains in beaten down bank stocks. At one point he wrote this paragraph about the hedge fund investors:

"Since it is harder for investors to borrow money at reasonable rates, they won't be eager to be buyers unless prices are marked down further. That all suggests troubles in the financial market will get worse before they get better. And most of the money being raised seems aimed at investing in distressed companies, not securities, suggesting more write-downs of mortgage-related assets if housing doesn't perk up."

What the h--- does that mean and how does he get from Point A to Point B? If you can explain that, you're smarter than I am. Does this validate the snide comments we hear about financial reporters or am I missing something here?

As always, your comments are welcome.

Real estate investors beware!

I am not an expert in real estate investing. So I pay attention to those who are when making my investment decisions. The best expert I know on California real estate is The Norris Group, a Riverside-based real estate training, consulting and publishing firm (http://www.thenorrisgroup.com/). Their predictions of real estate trends and expectations have generally been very accurate from what I have read, and they base much of their thinking these days on statistical relationships between things like personal income, house prices, foreclosure and default rates, and the like. Here is an alarming quote from their latest quarterly newsletter:


"According to some, the worst is almost over, and the (real estate) market is beginning to stabilize. That conclusion defies logic. The exact opposite is about to occur.


DataQuick (a real estate data provider) just came out with their foreclosure numbers for the first quarter of 2008. For California, it reported 47,171 trustee sales in the first quarter, an all-time record. The conversion percentage of the Notices of Default going to trustee sale is now 68%, also an all-time record. Therefore, according to Data Quick, there must have been 69,369 NODs that converted 68% of the time to 47,171 trustee sales. The number
of Notices of Default for the first quarter 2008 was 110,000! If the conversion ratio stays the same, 75,480 trustee sales should record in the third quarter 2008. That represents a 60% increase from an already record number of trustee sales.


Furthermore, DataQuick reports that 38% of all resales in California were lender-owned properties in March, 2008. By the third quarter, the percentage for the entire state will fly by 50% lender sales."


So if you're interested in California real estate investing today, get friendly with your local banker. They're going to be holding some mighty big sales in the months to come.