Chuck Ponzi November 20th, 2008

Yahoo’s finance headlines always provide a good look at the panic of the last few weeks. Virtually buried in the “Oil at 3-year lows; gas below $2 in 23 states” was this hardly startling revelation:

Also Goldman Sachs, which earlier this year predicted oil would reach $200 a barrel, said Wednesday that it was discontinuing its oil trading recommendations. Goldman said Wednesday in its weekly energy report said while continued weak demand and constrained credit would keep prices under pressure, it hoped that high volatility would provide a better exit point for trading.

“The volatility in the past few weeks has mostly been to the downside and the pressure on the oil complex has increased,” the report said. “In the near term, we do not expect significant upside potential and as a consequence we are closing all of our oil trading recommendations.”

Of course, the surprise isn’t always to the downside:

Light, sweet crude for December delivery fell 7 percent, or $4, to settle at $49.62 in Nymex trading.

Oil prices have fallen 66 percent since reaching a record $147.27 a barrel in mid-July.

Oil analyst Stephen Schork wondered if $50 would even hold.

“Maybe $50 is too conservative given the putrid, putrid look at the economy,” he said.

“If we’re not out of these doldrums nine months from now we’re looking at $30 oil.”

Did I say that deflation sucks for pretty much everyone?  If you owe money, it becomes more ominous.  If you own something, it falls in value.  If you derive everything from income, you’re likely to lose your job.

Here’s to hoping I don’t lose my job.  On the cheerful side, this last weekend, we went out of state… at one point paying $1.87 for a gallon of unleaded.  Seems downright cheap now.

• Deflation
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Chuck Ponzi November 19th, 2008

Housing? Maybe 2011.

Stocks? I’m buying at these levels.

Looking back? Peter Schiff got most things right. I don’t think we’ll see inflation for a little while more, that might come when people actually have money, but we’re in a deflationary recession right now. Everything is hit. Everything.

I think we’ve got more pain to come, but after a nearly 45% hit to the broad indexes, my opinion is that it’s got to get better sometime. This could be a replay of the late 1974 double-bottom. JMHO, this is not investment advice. If you get gains, take ‘em, you may not know when they’ll come again.

Don’t buy SoCal housing yet, you’ll be handsomely rewarded in the future for patience. There’s a lot of knife catching out there that might tempt some people, but the trend is in, and it’s down.

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Brad_Davidson November 11th, 2008

I’m seeing a drop off in the pending sales activity and the prices this month.  Pending sales are down to 3,866 (400 less that last month this time) and median listed price of those properties is down to $375,000.  The banks are trying to move em out before the end of the year and I’m seeing many more asking prices under $300,000 in Anaheim and central Orange County for SFR’s.  There’s a Three 3 bedroom SFR in Santa Ana listed for $150,000.  WOW.

Last month the MLS shows 2,323 residential sales in October with a median price of $416,500.  Down another $12,500 from September.  What a difference two years makes.

In 2005 I sold a rental house I owned on the Westside of Costa Mesa for $500,000.  I’d had the same tenants in it for years and it as a fixer.  The buyer did a quick remodel (kitchen, baths, carpet, paint and added a garage) and sold it for $625,000.  That same house came on the market last week, as an REO, for $311,000.  50% off the price from less than 3 years ago.  OUCH.

Sales numbers are going to creep down for a few months as the end of the year is always slow.  REO sales are also slowing as the brokers are getting fewer assignments because the lenders are having to meet new notification requirements before filing foreclosure notices and holding trustee sales.  But I feel that the reports that foreclosures are tapering off is premature. So many people are upside down that the temptation to walk away will lead to many more REO’s.

While the prospects are dismal if you’re underwater, the demand for low price REO’s never ceases to amaze me.  I’m constantly seeing bidding wars for well priced property.  Ten or more offers are not uncommon and sale prices ten percent above asking don’t surprise me.

Brad Davidson

We Help-U-Buy Realty

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Chuck Ponzi November 3rd, 2008

As promised, I am posting directly before the election how each of the California congresspersons voted for the massive +$700B bailout.  I believe that this number will be completely used up; I have no faith in lawmakers or the Treasury Department to make the right decision when it comes to how to steady the financial system; this money will find its way directly into the richest people’s net worth one way or another.  The only way to prevent it is to prevent disbursing money.

From ABC7

CALIFORNIA
Democrats – Baca, Y; Becerra, N; Berman, Y; Capps, Y; Cardoza, Y; Costa, Y; Davis, Y; Eshoo, Y; Farr, Y; Filner, N; Harman, Y; Honda, Y; Lee, Y; Lofgren, Zoe, Y; Matsui, Y; McNerney, Y; Miller, George, Y; Napolitano, N; Pelosi, Y; Richardson, Y; Roybal-Allard, N; Sanchez, Linda T., N; Sanchez, Loretta, N; Schiff, Y; Sherman, N; Solis, Y; Speier, Y; Stark, N; Tauscher, Y; Thompson, Y; Waters, Y; Watson, Y; Waxman, Y; Woolsey, Y.
Republicans – Bilbray, N; Bono Mack, Y; Calvert, Y; Campbell, Y; Doolittle, N; Dreier, Y; Gallegly, N; Herger, Y; Hunter, N; Issa, N; Lewis, Y; Lungren, Daniel E., Y; McCarthy, N; McKeon, Y; Miller, Gary, Y; Nunes, N; Radanovich, Y; Rohrabacher, N; Royce, N.

If you want to find your polling place or what measures are on your ballot, go to the following site.  I highly recommend using your voice to be heard, even if you believe that your cause will be defeated.

Visit SmartVoter.org

I personally will not be voting for anyone who was for the bailout.  Period.  No Exceptions.

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