patrick.net

Oh, I apologize.

I forget - and probably will again - that something which happened twelve or seventeen years ago isn't "recently". Never mind.

BTW, IIRC MM funds are investment products and they are not guaranteed against losses.

I think we are quibbeling over definitions. What the banks used to call a savings account are now called money-market accounts, and are insured to $100K by FDIC. Credit unions call savings accounts MM accounts too, and are insured by state or fed. CU insurance. MM accounts through a brokerage are a different animal.

How safe are CD's at Patelco (a credit union) ?

Peter P Says:
If I were rich, I would live in…
Spring: Sedona
Summer: Côte d’Azur or British Columbia
Autumn: New England
Winter: Florida, Hawaii, or Gold Coast

I would rather live some place where it didn't matter if I was rich...

btw, Corsica is just as nice (and much less touristy) than the Côte d’Azur. It is also inexpensive enough to make it a decent year round domicile,
SP

I would rather live some place where it didn’t matter if I was rich…

Well, so long as there is good food. It is not possible to have good restaurants without the presence of the rich.

It is also inexpensive enough to make it a decent year round domicile

But won't you get bored with a place?

From Patelco site:
"Patelco Credit Union is privately insured by American Share Insurance up to $250,000 per account.
This institution is not federally insured, and if the institution fails, the federal government does not guarantee that depositors will get back their money.
Accounts with this institution are not insured by any state government. "

That's odd. My accounts with Star One CU (formerly Lockheed CU) and Idaho Central CU are federally insured by NCUA.

For NCUA information see http://ncua.gov/Publications/brochures/insured_funds/funds.pdf

I use Patelco as my main bank, too, and I think it is cute and friendly and all, but I would not really want to hold substantial assets there. I am not really sure who "American Share Insurance" is, but an institution that touts that touts on its home page that it has "hired three new employees in the audit department" does not have that reassuring ring of solidarity about it that I really want in my financial institutions.

All my real money is with "Too Big To Fail" Citibank.

You know, I have been harboring this suspicion for a long time that most of these hedge funds must really be extremely elaborate Ponzi Schemes in disguise. Perhaps so elaborate that even their managers are not fully aware of this. This explains why they are so hush-hush about their techniques. The recent run on them just confirms this suspicion.

"praise Allah…
them people down south."

And lets give a shout-out to Applewhite and his Heaven's Gate cult as well......

(With honorable mention going out to the People's Temple...of course)

Peter P,

I disagree that it is not possible to have good restaurants without the presence of the rich. There's nothing I love better than finding an actual great local casual restaurant when I'm traveling, and I've found lots of them, particularly in Italy, France, and Mexico. A perfect, fresh meal made out of local whatever in some little restaurant I discover is more exciting to me than going to whatever is the haut cuisine temple du jour to me.

Unfortunately, in the past 20 years (basically since I've been an adult) the great little local places in the US have been increasingly replaced by ghastly chains such as Applebees (which has to have the most horrid food that has ever existed) and its ilk. Driving north on I5 to Oregon and it's a culinary wasteland.

SFWoman,

You might want to check out

http://roadfood.com

It's dedicated to reviewing and recommending good local eats across the US. Their rating system even includes a rating for how much out of the way you should be willing to drive to get to each place.

We've found a few good places from this site, including our recent favorite, Red's Eats in Maine, a little lobster roll shack on the side of the road that has some of the best lobster rolls I've ever had.

skibum,

Thank you. I will try it. I'm just amazed at how when you get off the freeway to eat you can drive all over a lot of towns (Red Bluff, Medford, etc) and not see anyplace that isn't a chain.

skibum,

I just looked at the California and Oregon listings, there is only one restaurant listed between SF and Ashland, Oregon. It's in Winters, I guess I'll try it next drive up.

I can't believe all this talk about money market accounts. If you are that worried, why not just open a treasurydirect account--it is a bit of a hassle if you need to access the money, but at least you know if will be there.

Unless you are nearing retirement, I don't know why anybody would have more than 10-20% in cash anyways.

In some ways, it seems to me that stocks are safer than cash. If a company owns valuable assets and the Fed allows rampant inflation, then those assets should increase in value.

WalMart stock, for example, can be purchased for around $44 (or .5 x sales). If inflation doubles the cost of everything over the next decade, then WalMart's nominal sales and profits will double even with zero "real" growth. If WalMart can continue to make a 3.5% profit margin and their nominal sales double, then that is a 7% return for shareholders--ignoring any non-inflationary (real) growth. So the stock should be worth $88 in ten years. Plus you get a 2% dividend. Plus, if you tack on 3% real growth, then the stock would be at $114 (assuming no PE expansion or contraction) and you would have received over 10 in dividends.

Meanwhile, even if you assume that: (1) money market yields stay at 5% over the next 10 years (big "if" since we will likely have another "down" cycle in rates and a less competitive market in MMFs, led by large, trusted institutions) AND (2) that your MMF doesn't blow up, your $44 would be worth less than $72 (or $36 in 2007 purchasing power) in ten years.

Glen,

Long term I think you are correct that stocks in solid firms/industries will be a better place for cash. However, in the short term, I think equities will take a major hit (a la 2000) as folks scramble for cash given the credit crunch.

I disagree that it is not possible to have good restaurants without the presence of the rich. There’s nothing I love better than finding an actual great local casual restaurant when I’m traveling, and I’ve found lots of them, particularly in Italy, France, and Mexico.

They may exist, but merely as anomalies. Once in a while, it is possible to encounter a few families who are willing to provide good food regardless of profit. I do not know if that is sustainable over the long term.

It is very difficult to maintain quality without pricing power. In areas with mostly price-sensitive consumers, this is very difficult.

Italy has some great cheap restaurants in out of the way places that the rich don't seem to frequent.

Holland has lots of rich people, but is not the place to go for food. French fries and canned peas.

Patrick

I have to agree Italy has a lot of cheap, good food. But they were still using LIRA when I visited. :(

Back then, you may get a discount if you pay US _DOLLAR_. :(

I can’t believe all this talk about money market accounts. If you are that worried, why not just open a treasurydirect account–it is a bit of a hassle if you need to access the money, but at least you know if will be there.

Yeah, you and every other damn investor these days. Have you seen the yields on the 3month T-Bill at the latest auction? Yikes!

I just looked at the California and Oregon listings, there is only one restaurant listed between SF and Ashland, Oregon. It’s in Winters, I guess I’ll try it next drive up.

I guess the question is, are there no good local eats on that stretch, or have the folks at roadfood not checked the area out yet?

And here I thought Gross was one of the grown-ups....
http://biz.yahoo.com/cnnm/070823/082307_gross_homeowners.html?.v=1

He's now calling for a massive bail-out for the FBs.

There's not much in Roadfood. Only two entries for the whole state of Idaho. I know from personal experience there's a lot more here.

I can't add anything to the roadfood entries for that stretch of highway. So far the best meal I've had on that stretch has been at a Chevy's. (Which I actually don't mind. It's edible.)

“praise Allah…
them people down south.”

(With honorable mention going out to the People’s Temple…of course)

What in heavens name are you talking about?

Let's just hope Peter P doesn't go out for fish in Thailand any time soon.
http://news.yahoo.com/s/ap/20070823/ap_on_bi_ge/thailand_puffer_fish_deaths;_ylt=Auzo4VqieOSO31GmfkIcKpCs0NUE

Let’s just hope Peter P doesn’t go out for fish in Thailand any time soon.

Thailand is too hot for me.

I do like eating puffer fish though.

Who else is severly pissed that people are crying that CFC sold them terrible loans, and it's not their fault that they can't pay their mortgages?

Okay, so some might have been misled, but really, I can't believe that when they signed on the dotted line that they didn't realize that they couldn't afford the mortgage, and let's face it, some of them couldn't even afford the mortgages before the resets in their interest rates.

Long term I think you are correct that stocks in solid firms/industries will be a better place for cash. However, in the short term, I think equities will take a major hit (a la 2000) as folks scramble for cash given the credit crunch.

Maybe so, but isn't it possible that the mortgage panic has already been priced in? When cooler heads prevail, I predict that a lot of quality stocks will get a nice move up.

Maybe the "scramble for cash" will replace the scramble for real estate, which replaced the scramble for stocks. If so, a tidal shift will have occurred and it could be a good time to invest for the long term (as everyone else goes short).

DennisN,

No, Gross has totally lost it! You wonder if it's one of those things written in a fit of rage he wishes he could take back? "We bailed out Chrysler?" WTF? Where's the logic there?

Claire,

Overall I agree (after all... this IS 2007?) Where I think more folks might have a case is if the loan was sold to them under the premise that;

A. RE only goes up!

B. You should be getting your hands on every borrowed $ you can!

C. We can always re-finance you later after your equity has accumulated!

Of course all of this was done by MB verbally so it will be tough to prove but I maintain that is exactly how a number of otherwise intelligent people got caught up in this.

Do I think the mortgage panic has been priced in? No! that is why all these rebels are on a housing bubble blog. The denial out there is rampant.

The scramble for cash is underway as evidenced by the brutal T-bill yield decline on Monday. Supply and Demand....

Glen,

Couldn't agree more!

SFWoman,

Barbara Ehrenreich's point was this may well be a case where the middle, lower middle and lower class will inadvertantly "stick it to the rich" as much of the MBS schlock was marketed to the very wealthy. Not that it's a particular advantage to anyone.

@PeterP && @astrid
I posted some photo-geekery you may be interested in on the previous thread. Didn't want to drag it here.
SP

DinOR said:
...a number of otherwise intelligent people got caught up in this.

"Otherwise intelligent people". If they are not intelligent enough to PAY ATTENTION to what the terms of a loan are before they sign, and to educate themselves about their obligations under those terms, then I am sorry - they are NOT intelligent people.

SP

Glen

The problem of cash is very closely related to the topic of this blog: housing. For many people the largest amount of investment they have outside of their retirement (which are mostly in mutual funds of equities + bonds) is cash or cash equivalents being saved/banked for down payment. This time frame rules out equities as an efficient investment vehicle in terms of risk. It is also a liquidity problem. Even if stocks are very liquid, that doesn't mean they're favorably liquid. Money markets have the distinct attribute of knowing that $1=$1. Because house prices are so high, 1st time buyers often exceed the FDIC limit and bubble-sitters like me often exceed the SIPC limit. Yet none of us wants to put that in sub-inflation treasuries.

Stirring up things on Zillow's new discussion groups.

If you haven't seen, Zillow has message boards. The unique thing is they allow realtors to register themselves, insert a mugshot, and they get a little nifty tag that says "Agent".

But there are a ton of folks like us out there, and it makes for a raucous mix. It's worth a gander if you haven't already.

I'll leave you with one of the realtor-posted topics. She received quite a tongue lashing in the responses. Not what I think many of these realtors expected on Zillow.

OK..you people..why are YOU waiting? I watched for years as buyers fell all over themselves to bid the prices up in the last market. They waived appraisals and home inspections. Now comes a market where you can REALLY strike a deal...and you're WAITING???

Interest rates are STILL low, sellers will pay settlement fees foro the most part. You can get a home inspection AND an appraisal. What gives??? There is SO much inventory AND there are short sales and foreclosures. It's like being a kid in a candy store. So..give me a call. Let's go strike the deal of the decade.

SP,

LOL! Yeah, I know... I KEEP "straddling" this but I've seen more than a few people I just assumed were at least as smart as me(?) get s-e-d-u-c-e-d by sexy rates and sure profits. I strongly suspect they knew (or should well have known) these "2nd/vacation" bets were "out there" but I also suspect, they just didn't WANT to know!

Since a lot of these "deals" were done "sight unseen" and b/c "You've got to ACT NOW!" petty details like this were swept under the carpet. If the "client" balked in the slightest they were assured that they'd be selling at a profit long before the short comings of the loan even came up!

From the DennisN Gross link:

"Write some checks, bail 'em out, prevent a destructive housing deflation that (Fed Chairman) Ben Bernanke is unable to do. After all 'W', you're 'the Decider,' aren't you?" Gross wrote."

How would a housing "deflation" be destructive? This deflation should be welcome, since it would be the true path to long term housing affordability. The bailout would just keep houses priced out of the reach of savers, and back into the realm of the thriftless, short-sighted masterbatards who are willing to mortgage their ass and ours to pay whatever price the house has inflated to.

RE: Bill Gross,

He's clearly a smart guy. His commentary IMO comes from self-interest. He's a bond guy after all, and with a continued credit crunch that was in large part triggered by the subprime mess, his business will suffer.