The Eyes of Laura St.

1446 Laura St. to be exact.

Check out the listing history:
Oct 17, 2009 Price Changed $235,000 -- MRMLS #I721298
Jul 14, 2009 Price Changed $265,000 -- MRMLS #I721298
Jul 21, 2008 Price Changed $299,000 -- MRMLS #I721298
Jul 21, 2007 Price Changed $309,000 -- MRMLS #I721298
Apr 28, 2007 Price Changed $329,900 -- MRMLS #I721298
Apr 02, 2007 Listed $344,000 -- MRMLS #I721298

As we close in on the 1000 day listing you would think they'd have learned a few lessons. They've made 30 mortgage payments and 5 tax payments in this time while losing equity faster and faster. Had they listed in April 2007 for $275,000 they'd have closed in a month. Instead they've spent $25k and watched another $50k evaporate.

Recovery

Everyone is all smiles over the Philly Fed State Coincident Indicators[pdf] and this map showing "green shoots."


Unfortunately a bit of green in Montana doesn't mean much when there are 36 million people in California and a whopping 950,000 in Big Sky Country. Here's a population adjusted cartogram:


A GDP adjusted chartogram would be even less encouraging.

California Default Watch Initiated

I've been quiet about California just because there hasn't been anything to add. The State went into a terminal dive last summer as covered by the Daily California Watch Series.

Now even the longtime insiders are seeing all other possibilities foreclosed:
Dan Walters in the Fresno Bee:

If some of the bleaker economic forecasts kicking around are accurate and/or the state doesn't act quickly to close the gap, Taylor's $20.7 billion problem could easily balloon to $25 billion or more. Even more ominously, as temporary tax increases expire and deferred spending promises come due, the state faces annual deficits in the $20 billion range for many years to come, Taylor says.
The battle lines are already forming on whether to deal with the crisis with more spending cuts, more new taxes and/or more gimmicks.
...
They've scraped the bottom of the gimmick barrel, voters are livid and new taxes are functionally off the table. This will be one of the bloodiest skirmishes the Capitol has ever seen — with the only option being that the most populous state in the nation default on its debts.

And Federal receivership won't fly either. The terms will prove intractable and the other States will howl.
And vat does our Leader, da Governator haf to say?:

As pieces of the July state budget solution begin to unravel, the Republican governor said judges – especially on the federal level – are preventing California from solving its problems.

He complained in particular about judicial actions that have struck down some state worker furloughs, required reductions in the prison population, imposed restrictions on water delivery in the Sacramento-San Joaquin Delta and this week blocked cuts to in-home care services.

"They are going absolutely crazy," Schwarzenegger said of judges. "So we have to have a very serious conversation with the federal government, because they have to let us run the state." [from Fresno Bee last month.]

Want an example of "out of control" judges? This also from the Fresno Bee:

Tuesday, Oct. 20, 2009 - 2:43 pm
The California Redevelopment Association filed suit in Sacramento Superior Court today to block the state Finance Department from carrying out a $2.05 billion shift of tax increment funds from local redevelopment agencies over a two-year period.

California's adopted budget for 2009-10 seeks 1.7 billion in funds from the state's redevelopment agencies to help finance schools and calls for shifting another $350 million in the next fiscal year. The suit challenges the constitutionality of the budget language and cites state plans to use the money for non-redevelopment purposes.

The association prevailed in an earlier lawsuit challenging 2008-2009 budget language that would have shifted $350 million in tax increment funds to the state.

Yeah, stealing and getting caught is the judge's fault.

Amazing Divergence

This is Anadarco Petroleum [red] and the UNG natural gas ETF [blue] from Nov '07 to Nov '08:

This makes sense seeing as APC is very much a natgas company.

Now look at what's happened Nov '08 to Nov '09:

This is where you are left scratching your head. Why is a nat gas company up 60% when its product is getting 60% less when sold?

Unless you think natgas prices are going to return to and blow through last summer's highs I see a fundamental disconnect.

Traditions Best Preserved

The President of The United States of America bows to no one and the US Flag is dipped in deference to none. It isn't arrogance or hubris or bravado. It is homage to and acknowledgement of a revolutionary concept that has changed the face of the world several times over.
That this fundamental precept of our raison d'etre has been abandoned by the office holder of the moment is personally deeply painful. Sorry. I cannot go on without violating decorum.

Price Drop La Loma

Rancho Margarita - A rare find in Somis! This 4BR/3BTH home sits on 11.66 acres with spectacular ocean and valley views from nearly every room. Open floorplan with common areas upstairs and three of four bedrooms downstairs. Numerous balconies, large windows and sliding doors bring the outside in. Large master suite with private patio and ocean/island views from the bathtub. Pool, spa and BBQ area are set to the ultimate backdrop. Four car extra-deep garage with additional work area. Large downstairs laundry room could be second kitchen to create potential inlaw unit. The hilltop home is surrounded by stately pine and sycamore trees, providing ultimate privacy from the few neighbors. A paved private road winds through the orchard, giving direct access to La Loma Ave; stop at the 2-stall barn with separate tack room and outside pen area - ideal for your farm animals. Nine shares of Del Norte ag water and private reservoir irrigate approx 800 avocado trees.
-------
Nov 10, 2009 Price Changed $1,449,000 -- SoCalMLS #F1804770
Oct 13, 2009 Listed $1,550,000 -- VCRDS #90016961
Aug 13, 2009 Price Changed $1,550,000 -- SoCalMLS #F1804770
Apr 12, 2009 Listed $1,750,000 -- SoCalMLS #F1804770
-------
Fifty thousand dollars off. $301,000 off original price. Sorry but 3% doesn't freshen the listing. Hat tip to "Effective Demand" who noticed the price drop. Maybe 20% more and I can afford it and it makes sense.

Backing out the taxable basis ($2100/yr) it looks like a 1989/1990 sale for approximately $160k. Nice.

Tuition Fee Rose Smell

Why Are We Destroying Public Education?
University of California Students and Staff Prepare for System-Wide Strike to Protest Cuts
The governing body of the University of California system, the Board of Regents, is preparing to vote on a major tuition hike for both undergraduate and graduate students. Undergraduate tuition would rise an average 32 percent, while some graduate schools would begin charging thousands of dollars for programs that are currently tuition-free. The Regents are meeting Thursday at UCLA, where students from across the state are converging for what organizers have dubbed a “Crisis Fest,” including mass protests, civil disobedience and teach-ins.

Regents bring debate to campus
By Laura Belyavski
Nov. 17, 2009 at 3:38 a.m.
Beginning this afternoon, Covel Commons will host a three-day UC Board of Regents meeting.
The board is scheduled to vote on the budget proposal that goes through the 2010-2011 fiscal year and includes the controversial 32 percent student fee increase.
The initial 15 percent rise in fees would take effect winter quarter, and a second increase of the same rate would take place fall 2010. Since the second hike would be based on the increased winter quarter fee level, fees would rise a total of 32 percent from their current level.
UC Board of Regents Meeting
The regents will meet at UCLA from Tuesday to Thursday at Covel Commons.
Tuesday, Nov. 17
• Vote on external financing for the Santa Monica/Orthopaedic Replacement Hospital and a parking structure at UCLA
• Vote on the proposed 2009-2010 state capital investments budget
Wednesday, Nov. 18
• Vote on 2009-2010 midyear and 2010-2011 fee increases
• Vote on 2010-2011 professional school fees Thursday, Nov. 19
• Agreement with Los Angeles County on the Martin Luther King Jr. Hospital
Compiled by Samantha Masunaga, Bruin senior staff.
Both UC spokesman Peter King and student regent-designate Jesse Cheng said they expect the proposal to pass.
“I would be surprised if it didn’t pass, but I’ve been surprised in my life many, many times,” King said.
...
“They need to do what they’re going to do,” King said.

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.

Beach Weather

October 3rd Coolest on Record

The 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.

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.

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.

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 Responds
Funny 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.

Technological Leadership

Was at Disneyland yesterday. Fun, short lines, etc. Went to the ASIMO demo. Honda in 1950 made motors for bicycles. Today FCX and Hondajet and a robot that can actually run. GM? They have GMAC and an iPod jack in their Buicks.







I weep for the Republic. Spend six minutes with Race Against Time to see what we've lost.

House Prices in Gold

Feb '06 median Ventura County home: $680k
Price of gold: $560/oz.
Median home price in gold: 1214 ounces.

Oct '09 median Ventura county home: $419k
Price of gold: $1000
Median home price in gold: 419 ounces.

Value today of the gold you bought in 2006 after selling your house: $1,214,000.

Turn one house into 3 in 3 years. Sounds like something Casey would do (in reverse).

Better Than HSR

More pictures and a fun little website touting the future of air travel at Aeroscraft.

Quick write up at SonyRadio. Excerpt:

It's the Aero craft, and when it's completed, it will ferry pampered passengers across continents and oceans as they stroll leisurely about the one-acre cabin or relax in their staterooms Unlike its dirigible ancestors, the Aero craft is not lighter than air It's 14 million cubic feet of helium hoist only two-thirds of the craft's weight. The rigid and surprisingly aerodynamic body, driven by huge rear-ward propellers, generates enough additional lift to keep the behemoth and its 400-ton payload aloft while cruising During takeoff and landing, six turbo-fan jet engines push the ship up or ease its descent. This two-football-fields-long airship is the brainchild of Igor Pasternak, whose privately funded California firm, Worldwide Aeros Corporation, is in the early stages of developing a prototype and expects to have one completed by 2010 .

Pasternak says several cruise ship companies have expressed interest in the project, and for good reason - the craft would have a range of several thousand miles, and, wit h an estimated top speed of 174 mph, could traverse the continental United States in about 18 hours. During the flight, passengers would view national landmarks just 8,000 feet below, or, if they weren't captivated by the view, the cavernous interior would easily accommodate such amenities as luxury staterooms, restaurants - - even a casino.

To minimize noise, the aft-mounted propellers will be electric, powered by a renewable source such as hydrogen fuel cells.

What do I think?:

Starve The Squid

The Goldman Sachs Group, Inc. - Delaware
Goldman, Sachs & Co. - New York
Goldman Sachs (Asia) Finance Holdings L.L.C. - Delaware
Goldman Sachs Paris Inc. ET CIE - France
Goldman Sachs Services Limited - British Virgin Islands
GS Power Holdings LLC - Delaware
Goldman Sachs (UK) L.L.C. - Delaware
Goldman Sachs Group Holdings (U.K.) - United Kingdom
Scadbury UK Limited - United Kingdom
Scadbury Funding Limited - Cayman Islands
Scadbury II Assets Limited - Cayman Islands
Killingholme Generation Limited - United Kingdom
KPL Acquisitions Limited - United Kingdom
GS Killingholme Cayman Investments Ltd. - Cayman Islands
GS Killingholme Cayman Investments II Ltd - Cayman Islands
GS Killingholme Cayman Investments III - Cayman Islands
GS Killingholme Cayman Investments IV, L.P. - Cayman Islands
KPL Finance Limited - Cayman Islands
Goldman Sachs Holdings (U.K.) - United Kingdom
Goldman Sachs International - United Kingdom
Goldman Sachs Asset Management International - United Kingdom
Forres LLC - Delaware
Shire UK Limited - United Kingdom
GS Funding Investments Limited - Cayman Islands
GS Liquid Trading Platform II Limited - Isle of Jersey
GS Capital Funding (Cayman) II Limited - Cayman Islands
MLQ Investors, L.P. - Delaware
Goldman Sachs Realty Japan Ltd. - Japan
Nephrite Equity Co., Ltd. - Japan
GK Blue Square (1) - Japan
GK Frangipani (1) - Japan
K.K. Minato Saiken Kaishu - Japan
GS Financial Services L.P. (Del) - Delaware
Chiltern Trust - Isle of Jersey
Laffitte Participation 10 - France
Laffitte Participation 12 - France
GS Longport Investment Corporation - Delaware
GSFS Investments I Corp - Delaware
GS Leasing (KCSR 2007-1) LLC - Delaware
GS Global Investments, Co. - Delaware
GS Global Investments UK, Inc. - Delaware
County UK Limited - Cayman Islands
County Funding Limited - United Kingdom
County Assets Limited - Cayman Islands
Goldman Sachs Global Holdings L.L.C. - Delaware
GS Asian Venture (Delaware) L.L.C. - Delaware
Brasilia Cayman Investments Limited - Cayman Islands
Goldman Sachs (Japan) Ltd. - British Virgin Islands
Goldman Sachs Japan Co., Ltd. - Japan
J. Aron Holdings, L.P. - Delaware
J. Aron & Company - New York
Prop — GS Fundo de Investimento Multimercado Credito Privado - -  
Investimento No Exterior - Brazil
Goldman Sachs Asset Management, L.P. - Delaware
Goldman Sachs Asset Management Co., Ltd. - Japan
Goldman Sachs Hedge Fund Strategies LLC - Delaware
Goldman Sachs (Cayman) Holding Company - Cayman Islands
Goldman, Sachs & Co. oHG - Germany
Goldman Sachs (Cayman) Trust, Limited - Cayman Islands
Goldman Sachs Global Services II Limited - Cayman Islands
Goldman Sachs Services (B.V.I.) Limited - British Virgin Islands
Goldman Sachs (Asia) Corporate Holdings L.P. - Delaware
Goldman Sachs Holdings (Hong Kong) Limited - Hong Kong
Goldman Sachs Foreign Exchange (Singapore) Pte. - Singapore
J Aron & Company (Singapore) Pte. - Singapore
Goldman Sachs (Asia) Securities Limited - Hong Kong
Goldman Sachs (Asia) Finance - Mauritius
Goldman Sachs Financial Markets, L.P. - Delaware
MTGLQ Investors, L.P. - Delaware
ELQ Investors, Ltd - United Kingdom
GS European Opportunities Investment Fund B.V. (1) - Netherlands
Matterhorn Acquisitions Ltd. - United Kingdom
NEG (TPL) Limited - United Kingdom
South Wales TPL Investments Limited - United Kingdom
Western Power Investments Limited - United Kingdom
Poseidon Acquisitions Ltd - United Kingdom
Goldman Sachs Lending Partners LLC - Delaware
Liquidity Assets Holding Limited - Cayman Islands
Liquidity Assets Limited - Cayman Islands
GS Macro Investments LLC - Delaware
GS Macro Investments II, LLC - Delaware
GS Mehetia LLC - Delaware
Mehetia Holdings Inc. - Delaware
Mehetia Inc. - Delaware
Goldman Sachs Bank USA - New York
Goldman Sachs Mortgage Company - New York
William Street Equity LLC - Delaware
William Street Funding Corporation - Delaware
GSCP (DEL) Inc. - Delaware
Goldman Sachs Credit Partners L.P. - Bermuda
Litton Mortgage Servicing, LLC - Utah
Litton Loan Servicing, L.P. - Delaware
Goldman Sachs Holdings (Netherlands) B.V. - Netherlands
Goldman Sachs Mitsui Marine Derivative Products, L.P.(1) - Delaware
GSSM Holding II LLC - Delaware
GSSM Holding II Corp. - Delaware
GSTM LLC - Delaware
SLK LLC - New York
Goldman Sachs Execution & Clearing, L.P. - New York
GS Financial Services II, LLC - Delaware
GS Funding Europe Limited - United Kingdom
Amagansett II Assets Limited - Cayman Islands
GS European Funding I LTD. - Cayman Islands
GS Funding Europe II Ltd. - Cayman Islands
Commonwealth Annuity and Life Insurance Company - Massachusetts
GS Diversified Funding LLC - Delaware
GS Diversified Investments Limited - Delaware
GS Capital Funding (UK) 1 Limited - United Kingdom
Reserve Liquid Performance Money Market Fund - New York
GS Ayco Holding LLC - Delaware
The Ayco Company, L.P. - Delaware
Rothesay Pensions Management Limited - United Kingdom
Eastport Capital Corp. - Delaware
EPF Financial, LLC - Delaware
GS Investment Strategies, LLC - Delaware
GS Mezzanine Partners 2006, L.P. - Delaware
Goldman Sachs Canada Credit Partners Co. - Canada -

-  
(1) These entities are partially owned by third-party investors.

Valuable $250 Coupon Inside!

2010 Audi R8 5.2 Coupe -
Date: 2009-10-23, 5:50PM PDT
Bodystyle: 2 door Coupe
Engine: 5.2L V-10cyl
Ext. Color: Phantom Black
Int. Color: Ebony Stock
Number: AX00029
VIN: WUAANAFGXAN000210
Model Code: 42352B

Print out this page for a $250 discount at dealer. Vehicle service history and Car Fax available.

LOL! $250! Asking price? $168,650.
Craigslist ad here.

A Tale of Two Neighbors Part 1 The Ranchos

The paths to putting houses in strong hands are varied and interesting. Here we have two neighbors that have taken roads less travelled. This is the Somis Area of Ventura County.

Our two market competitors are in the lower left:
5577 La Cumbre Rd
Somis, CA 93066
Price: $750,000
BEDS: 4 BATHS: 3
SQ. FT.: 3,631 $/SQ. FT.: $207
LOT SIZE: 2.16 Acres
YEAR BUILT: 1973

And at the upper right:
4386 Palomino Dr
Somis, CA 93066
Price: $628,300
BEDS: 4 BATHS: 2.5
SQ. FT.: 2,486 $/SQ. FT.: $253
LOT SIZE: 0.66 Acres
YEAR BUILT: 1976

Now look at the differences in their descriptions.

La Cumbre
Short Sale: Subject to Lender Approval. Great value property in rural Somis, Horses Allowed! Spanish Ranch Style 4 Bedroom/4 Bath single level home with in-ground pool on two acres. Family and Living rooms. Game room includes a wet bar. This home is clean. Multiple fruit trees. Home sets on back of part of acreage. Call your Realtor today and schedule a private showing!

-

Palomino
Just REDUCED over $56,000! Exceptional opportunity for this gated corner lot property with over 1/2 acre and views front and rear from front & rear balconies/deck. Property is dated, but in good condition. 4 car garage with 1 tandem space plus an RV garage and plenty more room for storage. All bedrooms upstairs. Great potential. .. great area. Property is sold as is and buyer is responsible for any & all inspections.

----
50% more house in obviously better condition on 3x the land and privacy. No contest here especially since Palomino all but screams that there are structural problems. It probably isn't an oversight that it wasn't picked up by the aggressive third party buyers for a flip. The question is whether La Cumbre is really a short sale that isn't obvious from the records and whether it will eventually go back to the bank for an even better deal.

In part 2 we'll graduate from rachos to a pair of nearby neighboring ranches.

Gas Up Diesel Down

SACRAMENTO, Calif.--(Business Wire)--
Betty T. Yee, Chairwoman of the Board of Equalization (BOE), today released
gasoline and diesel consumption figures for July 2009.California gasoline demand
rose by 2.2 percent in July compared to the same month of the previous year.
Demand for on-road diesel fell a substantial 11.2 percent in July from the same
period in 2008.

Up 2.2% is okay but diesel off 11.2% is a flashing danger sign for the economy.

Alright it is behind us

There's at least another 50 years to go. Advice as to what to talk about will be appreciated.

1959

Oh to be 24 again:

CRE Overbuilding

LATimes this morning:

The exodus from office buildings that started in late 2007 accelerated during the third quarter as the anemic business climate took its toll on the real estate rental industry, according to the Cushman & Wakefield real estate brokerage.
"These vacancies are a direct reflection on unemployment," said Joe Vargas, an executive vice president at Cushman & Wakefield. "Companies continue to reduce their workforce, or they are not hiring."

Snark translation: Thank you for choosing Cushman & Wakefield. We know you have many choices when analyzing the Southern California CRE market and we are dedicated to making your meal here with us a pleasant one. One note; the entire company is a hopium smoking section for your convienence. On the menu this morning ; one large cup of denial, buttered statistics, a steaming bowl of hypocrisy. For the main course; only the finest hand packed sausage made from the same secret ingredient entrails that go into our projections. For dessert; dollops of a most distracting concoction, blame of unemployment, is piled on top of the truth of overbuilding so that the resulting melange simply transcends understanding. We call it hoocoodanode parfait. And for your entertainment your server will read from his latest book.

IMO SoCal CRE suffers more from shadow overcapacity than does RRE. There were a lot of perfect storm trends that came together to produce this historic imbalance. Those general trends can be broken down into several categories. Economic, demographic, geographic, sociological, technological and competitive. We can spend hours on any but just an example of competitive. The Oxnard Target store is moving. A whole 1/2 mile across the freeway, further away from its cachement locus. Why? Because if they don't a competitor might take that new space and predate their customers. Now you've got a surplus full size Target store close to the core of a large population center.

Ventura Star story:

The closure of Oxnard’s existing Target will increase the barren surroundings of the area, which has seen its share of shuttered businesses: 24 Hour Fitness next door to Target; the abandoned Wagon Wheel area across Oxnard Boulevard; and a nearby boarded-up building that formerly housed Levitz.

Curtis Cannon, the city’s community development director, said he’s not concerned.

The green arrow is the new Target location:

Adequate Coverage

Modern man a wimp says anthropologist

Excerpt:

Some Tutsi men in Rwanda exceeded the current world high jump record of 2.45 metres during initiation ceremonies in which they had to jump at least their own height to progress to manhood.

Any Neanderthal woman could have beaten former bodybuilder and current California governor Arnold Schwarzenegger in an arm wrestle.

These and other eye-catching claims are detailed in a book by Australian anthropologist Peter McAllister entitled ‘Manthropology’ and provocatively sub-titled ‘The Science of the Inadequate Modern Male.’

McAllister sets out his stall in the opening sentence of the prologue.

‘If you’re reading this then you — or the male you have bought it for — are the worst man in history.

----
Perhaps but evolution doth hath its advantages.

Another Late Party Arrival

This one is a hoot. It's like the last 3 years never happened.

Modest 1/2 acre golf course house. Nice if dated. Purchased 05/08/2008: $855,000. Across the street from a recent comp 10% less. So, what do you do when you overpay? Go pergraniteel wild of course.

Here's a before shot:


And after:


Can you say over-improved? The first flip strategy was to "rent." For some reason there was a dearth of applications at $4500/month. Oh well, those months empty only served to add to the appreciation of the investment. Right?

Thus the new wishing price: $1,899,000
Yup, tack a 1 to the front and let's go fishing. I mean if you don't want to rent for $4500 then you can buy for only $400,000 down and $8,000 per month instead.

Late to the Party

Gee, did I miss anything? you know, like the biggest bubble in modern history?

Wait, I've got a couple of circa 2005 attitude beauties that need sellin':
Anacapa:

rm and gracious home of over 4230 sq. ft. with vaulted wood ceilings throughout combine with expansive lighting to enhance the wood tones of the glowing maple flooring. Open floor plan with 5 bedrooms, 5 1/2 baths, antique wall fixtures blend with the inviting comfort of the home's decor. Interior activities flow to the exterior activities and multiple patios, including the unusual BBQ pit which allows seating around the perimeter with moving tractor seats. A prime grove of avocados with good well water for irrigation + Ventura County Waterworks for domestic use. A steel arena, custom stalls, 3 covered feed areas, Round pen + deck, oversize tack room, custom built wash rack, trails, enclosed dog runs, workshop, fencing, 2-400 Amp electic panels, landscaped areas with mature trees, 32 x 30 Breezeway, 7 X 80 front porch, Guest house approximately 540 sq. ft. , a workers residence of approx. 1500 sq, ft. Flat area + knoll with viewing deck to enjoy the valley and ocean views.

OCEAN EFFIN' Views? The curvature of the earthe takes care of that. Jeez.
And this poor sod:
Apple Ave.
Beautiful newer home in Wrightwood. Home built in 2008, this home features 3 bedrooms with two full bathrooms. The home has a large living room with fireplace for cozy winter nights with an open kitchen area. There are two inside laundry rooms and a large 2 car garage. The exterior features a wrap around deck with views of the mountains. This home is a must see.

See the similarities? Ouch.

Wrightwood Burning

ABC 7 here.

Rim of the World coverage here.

LA Times.

Ghoulish comment. Mmmmm, smells like cheap houses.

Blog O' Note

One of the places I watch for inside news:
American Banker
and some cheesecake:

Just for Cobradriver

Kunstler's Eyesore of the month is a Seminole Gaming project.

"Located 30 miles east of glitzy Naples, Immokalee is one of the most economically depressed areas in the US. It's home mostly to recent immigrants who work the nearby fields. The city is notorious for crime and general destitution. Its decaying buildings are seemingly held together only by the bars visible on every window. Many newer structures don't have windows. It's that kind of place.
"For decades Immokalee has been a blemish on the repute of nearby Naples, both located in Collier County. And for just as long, residents of Naples have attempted to create a newer, better, cleaner Immokalee, but with little success. The latest proposal calls for a massive addition to the existing Seminole Casino, a dingy outpost of video poker and 28-deck-shoe blackjack that occupies a pimped out ex-aircraft hanger on the skirts of town. This, of course, is being sold as What Immokalee Needs.
"Curious is the artist's representation of a south Florida hotel with hills in the background."

Desperate and Dangerous

AMAZING BRAND NEW STAINLESS STEAL KITCHENAID OVEN!!!!!! Never been used....needed to upgrade our elecrtical through out the house but ended up moving before we did. Doesn't fit in the new house.....SOOOO SAD. Our loss is DEFINITELY your GAIN. EXcellent oven, $3300.00 in stores.
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Sad. The last desperate acts of tre FBs.

Firm

Check out these two craigslist posts. The thin veneer of civility is cracking.

Pair 2006 Yamaha FX Cruisers + Trailer - $13700 (Simi Valley)
Pair of 2006 Yamaha FX Cruisers High Output with Dual Zieman Trailer

I have a pair of High performance Yamaha 3-seater Waverunners. These are the top of the line Waverunner.They are 2006 but My husband bought them new for my Birthday in March of 2007 and we have only taken them on 2 trips. They have been sitting next to my house for over a year unused.They have very very low hours of use. BlueBook value for the waverunners and the Double Zieman trailer is almost 18,000. These are a bargain at 13,700. I own them outright and have the certificate of title in hand. Don't buy new ones when these are identical and a steal at this price!!Please call

Please do not even bother calling or e-mailing if you expect me to fall for some Western Union or money Order Scam. It's not gonna happen. Thanks, Gina
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Okay, Gina. And this sweet dealz:

MUST SELL - $3500 (ventura county)

2007 YZ450F new engine,great condition, $3000
2008 crf 250 25 hours like new $3500
2008 crf 450 50 hours,new transmission,new top end,runs great $3500

these are priced very cheap,we need to move them in order to pay some bills.
Prices are not negotiable,these are very well maintained machines that you will
enjoy riding.
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Gen-X and their toys. Such a sad marriage. I'd give Gina $6k for her $18k package. Maybe $$3500 for the entire second package.

Somebody Get A Rope

LATimes story:

"For a business to allow this to happen in today's ethically charged climate is quite suicidal," he said. And because Madoff's fraud was the root cause of the situation, he added, "it's like rubbing salt into the wounds of a national tragedy."

The home's former owners, Lawrence and Linda Elins, didn't respond to requests for an interview.

Their real estate agent, Irene Dazzan-Palmer, said she had tried to lease the home for the couple last spring after they were "devastated" by Madoff losses. But before she could find a renter, the couple signed over the property to Wells Fargo to help satisfy a larger debt, she said.

Wells Fargo subsequently denied requests to show the house to prospective buyers, said Dazzan-Palmer, a Coldwell Banker specialist in Malibu Colony properties.

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I don't even know how Casey got the sex change operation nevermind the new job.

I'm Tan, I'm Rested

Hat tip to Property Flopper although I was typing up the post when he sent the tip.

SacBee has the story:
Republican Assemblyman Mike Duvall resigned from office today after revelations that he described lewd details of two sexual affairs at a televised committee hearing.
...
"So, I am getting into spanking her. Yeah, I like it. I like spanking her. She goes, 'I know you like spanking me.' I said, 'Yeah! Because you're such a bad girl!" he says in the recording.

This is like arresting Casey for spitting on the sidewalk compared to the plethora of criminality that is the California Legislature.

Buy Buy Buy

I know this sounds strange but stick with me. I want everyone reading this to invest in California. Dive in the deep end. I mean giving the Golden State every penny you can find in the seat cushions. All in, double down, pedal to the metal Casey Serin type reckless abandon. Here's the deal via the LATimes:

California sets short-term debt sale for Sept. 21-23 September 1, 2009 | 2:24 pm
California’s planned sale of up to $10.5 billion in short-term notes is scheduled for the week of Sept. 21, Treasurer Bill Lockyer’s office said today.

The debt, known as revenue anticipation notes, or RANs, will bridge the gap between near-term state spending and tax revenue expected later in the fiscal year.

The money raised also will repay a $1.5-billion loan that JPMorgan Chase & Co. made to the state last week.
...

Why do I want to help California? Easy. There's an out. Here it is:

If individual investors don’t like the final yield, they can rescind their orders.

You’ll have to have a brokerage account to buy the notes. The investment banks handling the sale will be led by JPMorgan, Citigroup Global Markets and De La Rosa & Co.

----

So there's the plan. We sandbag the b@st@rds. They are predicting 1-3% rates? Complete bullshit. Similar recent offerings are commanding 5% easy. But that doesn't matter because we are all going to reject the loan via the terms outlined above. We leave them with a very public vote of no confidence.

Cap Rate? What Cap Rate?

Welcome investors. $244,950. Yup, 19x annual rent (or 223x monthly). That is if you can rent them. Vacant for months and otice the recent rent drop on the sign. What is the seller smoking asking $250/sf?

Told Ya So

Some of the tax changes and other ideas under consideration by the Commission on the 21st Century Economy:

• Reduce personal income tax rates for all taxpayers. The plan would retain the current standard deduction, as well as deductions for mortgage interest, charitable giving and property taxes.

• Eliminate state general fund sales tax (base is 5 percent, although state has imposed a 1 percent temporary increase through June 2011).

• Eliminate corporate tax.

• Establish a business net receipts tax (value-added).

• Impose 18-cent per gallon excise tax increase on fuel to pay for roads, transit and "smart growth." Includes rebate for low-income drivers.

• Impose tax on oil drilling in California.

• Create tax resolution forum.

• Establish a strong rainy-day fund (would need voter OK).

• Impose "split-roll" concept that removes property tax protections for commercial and industrial property (would have to go to voters).

Of course all we'll get out of the commission and into law will be the VAT and weakened Prop 13 on businesses. SacBee has a story.

Commission web site.

Here's why what they are proposing won't work:

Fire Watch