Daily Intent

As the markets continue on the path of irrational daily swings, I offer a story of “Adaptability”.

This one goes back to my high school days when the colors of Black and Gold ruled over the seas of greater Seattle.   A time when wigs were a Friday night staple, Saved By the Bell offered post class entertainment, and Ken Griffey Jr.’s rookie baseball card valued more than $100.

It was a brisk Friday night.  Thousands of fans eagerly awaited the thunderous arrival of their pride and joy, the Inglemoor High School football team.  The Inglemoor Vikings.

This would have been like any other energized football under the lights, however an exceptional rumble was brewing amongst seven avid male fans.  Bare chests covered in Black and Gold paint awaited the night air. 

Slow clap…Energy building…Whap!  The ball end over end sailing into the air.  Seven shirts torn off!  Seven scrawny male fans boast their painted chest and school spirit.  Spirit at it’s most elementary level.

Quickly administration is notified of this Barbaric act!

To the principal’s office.  The verdict: “No nipples are allowed to be showing”.

Seven fall days fall off the calendar.

Slow clap…Energy building…Whap! The ball end over end sailing into the air. Seven shirts torn off!  Seven scrawny male fans boast SUSPENDERS covering their nipples! Ha ha!

Administration radios in from all corners.  “Boo!”

To the principal’s office.  The verdict: “No chest is allowed to be showing.”

168 hrs later.

Slow clap…Energy building…Whap!  The ball end over end sailing into the air. Seven shirts torn off!  Seven scrawny male fans boast shirts CUTOFF just below the chest, entire midriffs showing.

Administration holds their ground.  Baffled.  Shocked.  Speechless.

Outcome: Battle won via Adaptability.  Seniors start a trend that lasts a decade.  School spirit elevates to levels never witnessed.  Thousands are mobilized. Local newspapers clue in.  National coverage is received.

During these times of change, might you have the adaptability, creativity and energy of a Naked Viking?
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An astute reader of the Market Street Report requested some foreclosure numbers.

8500 foreclosures per week nationwide.  53% increase in foreclosures year over year.  Six out of every 1000 homes.  Nearly a half million homes have gone into foreclosure so far this year.  It’s expected 1 million homes will go into foreclosure by years end.

Santa Barbara - one or two per week.

Action steps taken by the government recently:
- Waged “war against shady home loans”.  New laws against subprime loans will take affect Oct. 1, 2008.   …www.cnnmoney.com
    If the government is able to balance governance with allowance of free markets to operate economically, these new laws will be excellent for the general public.   Limited prepayment penalties.  No more coercion of appraisers.  Good Faith Estimates required by brokers.  Deceptive advertising practices banned.

Word of the week: Casino Finance

“Any investment strategy that is classified as extremely high risk.

For example, using borrowed money (margin) to invest is riskier because leverage results in amplified gains and losses “  -Investopedia

Related phrase - “Winner, Winner, Chicken Dinner!”

  Five points to ponder:

   1.  George Bush’s brilliance - “When will the economy turn around? I’m not an economist.  …But I do believe we’re growing.  I’m an optimist, and there are a lot of positive things about our economy.”
   2.   US government is going to back Fannie and Freddie.
   3.   Inflationary worries are real.  CPI jumps 5% in the past year.
   4.   The markets have battled back the last two days.  The Dow elevated more than 450pts.  Financial companies mixed on earnings.  Oil falls below $130!
   5.   Texas Rangers star Hamilton is a freak of nature.  28 homeruns in first round of the homerun derby.  All Star game ends in 15 innings.

Positives:

    * Our president is full of hard facts supporting his optimism.
    * The back bone of the conforming loan industry will be upheld.  Fannie and Freddie, were they too fall, would be truly disastrous to our economy.
    * Investors see positives and opportunity amongst the undulations.   Microsoft and Google post strong profits.  JP Morgan Chase and Wells Fargo also had stronger than expected earnings.  Might oil continue falling?  This would be good for inflation, good for stock values, good for your pocket book. 

Negatives:

    *  Merrill Lynch took charges and write-offs of $9.4 billion while it solidified a deal to sell Bloomberg for $4.4 billion. 
    * Foreclosures continue to batter many markets across the country.

Rate Guide:

Conforming Jumbo loans aka  “Gumbos” ($417K - $729K) have better aligned themselves with those loans below $417,000.

$1.2M Sales Value, 25% Down:
The ranges of interest rates are quite dramatic depending on your situation.  Call me for more specifics.

$417K Conforming Loan Amount:
•    30 Yr Fixed = 6.50% $2635/month APR 6.537%
•     15 Yr Fixed = 6.125% $3547/month APR 6.186%
-     5/1 IO = 6.25% $2171/month APR 6.20%
Quick Disclosure: These rates are subject to change…

Services: Financial Resume

When considering a home loan, it’s necessary to prepare your “financial resume”.  The “credit crunch” has exacerbated this reality.  Your past financial successes and failures, and your current debts, income, and reserves all are strong determinants of your ability to repay a future loan.  Yes, it’s true, no longer is your pulse the sole determinant.  If you aren’t feeling prepared today, feel free to call me.  I will help you plan out and prepare your financial resume in a way that the bank would confidently lend you money.

Focused Office Hours:

-Open Door Policy- You are welcome anytime to drop into my office.  21 E Victoria #300

Local:

California Wine Festival - Santa Barbara
Where: Chase Palm Park
When: 12 - 4pm.  Saturday July 19th.
Fee: $60 in advance / $75 at the gate
Why:  Unlimited wine tasting, food sampling.  Live Blues and Jazz.
Hint: You may even consider the Rare wine tasting Friday night.  $135 for the weekend pass.  Friday would be great for networking.  Saturday great for fun.

Live and Be Well,

Jeff Bochsler

The material reflects the views of Jeff Bochsler and is for your general information.  Opinions expressed herein are current opinions only as of the date indicated, and are subject to change without notice.  Past rates are no guarantee of future rates.