patrick.net

If I were a rich European, particularly in the North, I’d be seriously considering a nice house on the sunny West Coast of CA.

That would probably mean Santa Barbara... or perhaps Newport Beach...

The best parts of the Bay Area rain a lot.

The Bay Area is attractive only to those who think humans live to work... and that Monta Vista is the Holy Grail of success.

Yeah, I saw that Allah, and also Chuck Schumer's effort to bail out mortgage owners.

http://www.senate.gov/~schumer/

It's a crime. Let the free market work, dammit. If the economy implodes because Americans can't make their mortgage payments, so be it. No amount of money in the US coffers is going to save us anyway. We need China for that. We've made our bed, and now we have lie in it.

Or emmigrate.

The number of "insane" legislative initiatives across the political spectrum of the US w.r.t. mortgage bailouts is leaning me toward that latter option (among other factors).

I would say yes to a new thread on crazy bills to 'help' the poor mortgage owners. I'd also say, write your representatives.

SP

What do you mean by majors? Let us say hypothetically, despite spreading things around a bit, I have in excess of the FDIC limit in a couple of places. What would you consider a ‘major’, something like BofA? At the moment, I don’t feel comfortable handing my money to merrill lynch to manage either.

Money markets at large, national banks will not be allowed to fail. I doubt money markets at large brokers will either. The consequences of even a tiny failure in this regard results in the following news report:

"Mary Smith went into her local Wells Fargo to tap into her savings account to help pay her rent for the month. She lost her job, like hundreds of thousands of others, due to the current recession. But when the teller told her she would only get $80 for every $100 she deposited, and for the rest she'd have to fill out a form to submit to the government, she began to cry uncontrollably."

"Like millions of other hard working Americans, Mary found out that up to 20% of her money was simply 'gone'. And, though the government guarantees this money through FDIC insurance, Mary will be unable to pay her rent in the coming months unless someone gives her money back quickly."

This report would be followed by scattered reports of massive lines at closed bank doors, sporadic violence, and appeals for calm.

Instead the government will just make sure that money market funds are redeemable. It hasn't been long enough since the Great Depression yet for the government to let the banks *be perceived* as failing. Not yet anyway. Maybe in 20-30 years, but not today.

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 hear ya Peter P. It takes only a few days in Europe to realize how much we work to live here in the good ole US of A.

Not yet anyway. Maybe in 20-30 years, but not today.

So long as the Boomers are alive and voting, the electronic printing press is going to run 24/7.

You really shouldn't be spending Winters in Florida if you want to avoid the Boomers. Plus, the bugs are still as big as your head in Winter as they are any other time of the year. I grew up there and still appreciate a healthy respect for the Palmetto bug.

Go for Hawaii, where you will encounter only one of those pests.

I am afraid of bugs. :(

Me too, especially big ones that FLY! Oh the horrors...

OK, no Florida... back to the good old Bay Area. :)

About Europeans coming to America, I think they really did between 1990 and 1995. And not a few of them bought vacation homes, though I don't think many kept them for more than a few years.

Were there Asians aplenty in the BA at that time?

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).