SoCal ROI for Sept '08 to Sept '09
First some background and the results for July:
40 years ago Ventura and Orange counties were virtually identical. Obviously they've taken different paths to get where they are today. In one respect however they have roughly paced each other; median housing prices. For one month at the peak the Ventura median exceeded Orange. With the smaller base Ventura is more exagerated and quicker to respond.
Here are the "returns" for your housing investment purchase of the median house in SoCal Jul '08:
Los Angeles $80k down payment $6600/mo equity decline -99%/yr return
Orange $92k down payment $3400/mo equity decline -44%/yr return
Riverside $52k down payment $6200/mo equity decline -144%/yr return
San Bernardino $46k down payment $7500/mo equity decline -195%/yr return
San Diego $44k down payment $3700/mo equity decline -61%/yr return
Ventura $64k down payment $3800/mo equity decline -56%/yr return
I'd like to call your attention to what happened to the knife catchers in the Inland Empire (Riverside & San Bernardino) last year. Now, extrapolate. The IE has in the past been a leading indicator of the Coast. Ruh roh. I expect another leg down in the coastal communities but with substantial local variations.
Here's October:
Los Angeles $72k down payment $2500/mo equity decline -42%/yr return
Orange $85k down payment $340/mo equity
increase +4.7%/yr return
Riverside $47k down payment $4375/mo equity decline -114%/yr return
San Bernardino $41k down payment $4580/mo equity decline -134%/yr return
San Diego $66k down payment $250/mo equity decline -3%/yr return
Ventura $77k down payment $1100/mo equity decline -43%/yr return
So much for buying at the bottom. This is definitely a metric worth watching.
Labels: California, Housing
Beach Weather
October 3rd Coolest on RecordThe Bastards can't even bring themselves to say "coldest" opting instead for "coolest." Excerpt:
The October 2009 average temperature for the contiguous United States was the third coolest on record for that month according to NOAA’s State of the Climate report issued today. Based on data going back to 1895, the monthly National Climatic Data Center analysis is part of the suite of climate services provided by NOAA.
The average October temperature of 50.8 degrees F was 4.0 degrees F below the 20th Century average. Preliminary data also reveals this was the wettest October on record with average precipitation across the contiguous United States reaching 4.15 inches, 2.04 inches above the 1901-2000 average.
This puts a chill into the Copenhagen party scheduled next month.
Labels: Politics
Bond FAIL
The LA Times has the
story:
Borrowing $1.9 billion Tuesday via bonds that mature in June 2013, the state was forced to pay a 4% annualized tax-free yield to lure investors to the deal.
Just last Friday the brokerages underwriting the deal, led by Goldman Sachs, had estimated that the bonds could be sold at a yield of 3%.
4% tax free is roughly equivalent to 7.5% taxable. Sad.
Labels: California
Useful Links
Blatantly ripped of from the clever
Reformed Broker:
Here are the Periodic Elements of the Financial Blogosphere:
Rocket Science (macroeconomics, monetary policy, real estate, regulation)
- BP The Big Picture
- EV Economists View
- IP Investment Postcards
- CR Calculated Risk
- BS Baseline Scenario
- CA Cafe Americain
- BC Bronte Capital
- AI Accrued Interest
- MS Global Econ Trend Analysis
- PF Psy-Fi Blog
- MU Musings of a Trader
- KD Market-Ticker
- NC Naked Capitalism
- PK Infectious Greed
- EB Econbrowser
- GM Greg Mankiw’s Blog
- AC Across The Curve
- MR Marginal Revolution
- WB World Beta
- CD Carpe Diem
- SP The Capital Spectator
- CX CXO Advisory
- DS dshort.com
- WR Credit Writedowns
- L Alea Blog
- GR Grasping Reality
- BN Bearish News
- BR Broke and Broker
- GG Gregor Macdonald
Rogues Gallery (misfits, jokers, rebels & knaves)
- DB Dealbreaker
- LF LOLFed
- JR Jr Deputy Accountant
- WF Wall Street Fighter
- KO 1-2 Knockout
- LS Long or Short Capital
- MW Money Is The Way
- ED The Epicurean Dealmaker
- UB Ultimi Barbarorum
- ZH Zero Hedge
- FO footnoted.org
- AU re: The Auditors
- RB The Reformed Broker
- F The Fly
- FB Falkenblog
- CU BlogMaverick
- DY Kid Dynamite
- HL Howard Lindzon
- RO Rortybomb
The Establishment (mainstream media bloggers/ news sites)
- FL Floyd Norris
- FS Felix Salmon
- MB Market Beat
- PB Pony Blog
- MV Minyanville
- DP The Deal Professor
- TT Tech Trader Daily
- TS TheStreet.com
- FT FT Alphaville
- DE DealBook
- JP James Pethokoukis
- HP Huffington Post Business
- CU Curious Capitalist
- EX Economix
- DJ Deal Journal
- TB Matt Taibbi
- FR Freakonomics
- PM Planet Money
- DL The Deal
Stock Operators (traders, technical analysis)
- FF Fund My Mutual Fund
- CC Charts and Coffee
- UP Upside Trader
- KR Kirk Report
- MT My 10,000 Dollars
- SH Slope of Hope
- BC iBankCoin
- ST StockTwits
- MI Trader Mike
- VX Vix and More
- DO Daily Options Report
- CM Cara Community
- MX Maoxian
- QE Quantifiable Edges
- AT Afraid To Trade
- AL AlphaTrends
- JE Jesse Felder
- CN Condor Options
- SW Andy Swan
- TV Tickerville
- LD Surfview Capital
Peanut Gallery (multiple voices and sources of commentary, aggregators)
- NV Investing Contrarian
- BI Business Insider
- AB Angry Bear
- DC Daily Crux
- TM The Money Blogs
- SC Money Science
- BM The Big Money
- TR Take a Report
- CS Wall St Cheat Sheet
- MM Money Morning
- WM Wealth Managers League
- GF Greenfaucet
- OA Wall Street Oasis
- NF Newsflashr
- PH Phil’s Stock World
- TF TraderFeed
- BS BloggingStocks
- SA Seeking Alpha
- TW 24/7 Wall Street
- DR Daily Reckoning
Baby Buffetts (value investors, stock picking, fundamental analysis, activism)
- AR Abnormal Returns
- A Aleph Blog
- BE Bespoke Investment Group
- CW Crossing Wall Street
- EJ Breakout Performance
- GX Gen X Finance
- GB Greenbackd
- IC Investing Caffeine
- DG Dividend Growth Investor
- DI A Dash of Insight
- JM Jeff Matthews
- MF Market Folly
- PC The Pragmatic Capitalist
- RR Random Roger
- VP Value Plays
- CE ContrarianEdge
- MG ModernGraham
Labels: Economics
Rumblings and Ramblings
900+ events is rather a lot really. Predicting earthquakes is what gets even fake psychics discredited but I cannot help wonder if a 7+ someplace won't be trigger event for an already fragile economy. Even the usual home price drop near the epicenter in these conditions could empty out an entire city with walkaways.
Labels: California
The CalPERS Crush Part 1
The CalPERS financial bomb has gone off. The blast wave hasn't arrived to knock us all down is all. Revenues are falling further, unemployment is out of control. The UE fund is projecting a
$23.7b deficit.
Employers, who support the fund through a tax on each worker, are expected to contribute $4.3 billion this year but that is nowhere near the $12.5 billion that is projected to be paid out in benefits. After eking out a $326.2 million surplus in 2008, the trust fund is expected to be $7.4 billion in the red by the end of this year.
Hey, no big deal. Nothing a one time $1500 surcharge for every remaining worker wouldn't cover. Right? The big news however is all the rotting fish at CalPERS. The consulting fee scandal. The ignored overpaying for financial services report. The failure to pursue specific performance clauses. CalPERS now even has a special blog to refute the lies being told about it.
CalPERS "stuff" following is intended to be backgrounder for those interested in saying "I saw all this coming." It's like decoding the Japanese diplomatic transmissions in Nov '41. We know lots of things but it all isn't in one place. THe insolvency crisis is long term. Let's talk liquidity. Because of muni pressures and the rats leaving the ship and a demographic bulge and recent "flexibility" granted end of career calculations a lot more people are retiring than was planned. That on top of a contributor (State, munis, districts) cash crunch that has them not making full contributions. Indeed some are reacting like the US at the United Nations. Years behind full dues. This was okay as long as the CalPERS was raking in cash. Those same years also made the watchmen lax in making sure they could met future promises.
Then the cash squeeze arrives. Lots of the crap on their books is so complex it can't be unwound. The people who set it up are gone and the counterprties are out of business. Trying to sell a large complex security in this market and they honestly won't get fair value. At least they have that part right.
List of $100,000 retirees:
California Pension Reform's 'The CalPERS 100K Club'Plug in you favorite city/district and read the list. Shocking.
CalPERS resorts to counter propoganda:
CalPERS tweets back at 'misinformation' - Los Angeles Business from bizjournals:
The propoganda itself:
CalPERS RespondsFunny relations:
CalPERS reviewing tie with Apollo Management after steep losses -- latimes.com
More funny business:
He earned $53 million opening doors to CalPERS money -- latimes.com
CalPERS discloses more fees paid to Alfred Villalobos -- latimes.com
Calpers Knew of Foreign-Exchange Trading Hits - WSJ.com
I'm still working on evidence of massive overpaying to retirees and the instances of outrageous double dipping.
Labels: California, CalPERS
