John's Blog

To continue with the good news, California, along with Indiana, has received the most benefit of all the states of “transportation stimulus projects”.  California stands alone as the largest benefactor of “transportation stimulus spending”.  The stimulus funding has created the largest number of jobs for California of any other state; unfortunately, our state unemployment rate is still one of the 4^th highest in the nation (according to CNNMoney.com).

Well, Sonoma County is experiencing some changing of the colors of leaves on the trees, indicative of Fall weather.  A fun up-coming event in our area is the Canine Companions for Independence, 2^ndAnnual Bone Appétit on Sunday, Sept. 12^th from 2 to 7 pm; for more information call 800-572-2275.

The private money finance industry is and has been a challenge the last few years.  Since our focus is mostly on commercial property, we are not as affected as others.  We do see a little light at the end of the tunnel – and it’s not a train coming at us.

Since I’m a little busy right now and haven’t been able to keep up on my Blog, there will be a “ghost-writer” taking over for a while.  The Ghost is more available than I am right now since I’m finding little time to talk about the economy, trends and where we might end up.

The good news for those of us who are lucky enough to live in Sonoma County, it is beautiful this time of year.  We finally have seen some warm to hot weather; we are even seeing more commercial loans of very good quality to consider recommending to our private money clients.  Please check our Loan Opportunity Section on our website for current investment opportuities and give us a call.  So, you see, even in tough times, there are good things to be grateful for.

Today is the longest day of the year, 14.5 hours of sunshine from sun-up to sun-down and with it, the official beginning of summer.

It has been interesting to observe the commericals for travel on TV this year versus the last couple of years. Travel is up and the industry is promoting travel, stay-cations may be a thing of the past.

I understand airfares are up but vacationing in Europe this year may be the best bargain in the past several years with the Euro trading at 1.23 +/- today.

Since the start of the slow motion morgage melt down in 2007, I have not taken more than 5 days off in succession but his year, if all goes well, I will be gone for 2 full weeks in July. Maybe it is a sign that things are getting better or I am just getting accustom to the ride.

Either way, when I return, the second half of this year will be under way. I believe it will be the watershed period for the economy whether it’s the big “U” slow recovery, double-dip or “V” recovery, we will know by year-end.

I may get one more blog in before my vacation, stay tuned…

The June primaries are over and ballot initiatives with single interest group sponsors, (PG&E & Mercury Insurance), lost; as most single interest group initiatives have in the past.

The initiative on open primaries, which passed, will be another California election experiment in democracy; hopefully, it will be better than the unexpected consequence of the voter passed term limits. This initiative was the Governor’s way to open elections for less ideological candidates to get elected, resulting in getting Sacramento off ideology and on to good governance. We will see how this will work and what unintended consequences it fosters.

Fully expect the fall campaigns for governor and senator to be long, expensive and ugly. If you thought Whitman spending almost $80 per vote this time was obscene, that was only a warm-up for the November main event.

Finally, the Democratic candidates for all the high offices, Governor, Lt. Governor, Attorney General, and Senator all have their roots in San Francisco with strong ties to John Burton and Willie Brown.

The Republicans my have a field day painting the Democratic candidates as San Francisco progressive insiders promoting taxes, spending, gay marriage, abortion, and pro-illegal immigrants.

If the Republicans make their case and the voters agree, a major shift in the politcal landscape of California politics will occur. If it does, expect both parties to cloak themselves in ideology and nothing will change in Sacramento.

November, politically, is a long way off so stay tuned.

Like it or not, a U.S. double dip recession or a slowdown in the feeble economic growth is a real possibility. But the crazy culprit is not the markets that have the potential to foster a double dip but the inability of state governments to manage to the new normal of lower revenues.

California needs to cut $20 billion of state spending. The legislature, so far, has been unwilling to cut program spending or raise taxes. If this continues, then real layoffs cannot be far behind. Local governments too are going to suffer the consequenses of the State’s actions or non-action with further local lay-offs.

The only thing for certain is individual citizens, whether liberal or conservative, are going to pay the price directly or indirectly and kicking the can down the road is not the answer.

The residential market is doing okay with entry level homes now in short supply, as future foreclosures occur, they will be snapped up as long as they are below replacement cost.

Higher end homes are suffering from both a lack of demand and financing. It is expected that both will improve as the year progresses.

The interesting part is the commercial market. Banks are beginning to unload their troubled portfolios to Wall Street; Check out Debtx.com as one of several sites offering up troubled bank assets for auction.

We expect the commercial real estate issues will be cleaned-up and out by the end of 2012 with the residue cleared by 2013. After the S&L meltdown in the 1980’s/90 the Banks, FDIC and Wall Street know how to clear out troubled assets.

…and to my first attempt at a “blog.” While everyone here in the office seems to understand that “blog” is short for Weblog, in other words, an online diary of sorts, the concept was new to me and I suspect will be new to some of our customers. So, let me offer a brief explanation as to why I would add my voice to millions of other online diarists.

In future postings, I will share with you news about our local and regional market, observations on the impact of local, state and national policies on our investors, and an anecdote or two on our experiences as an entrepreneurial investment company that seeks to serve the independent and resourceful investor.