The Historic Holbrooke Hotel, Grass Valley, CA

March 20, 2009 jd

Photo courtesy of the Grass Valley Downtown Association

A gem in the beautiful City of Grass Valley is the Holbrooke Hotel. Perhaps better said, the Holbrooke Hotel is a nugget of gold, since Grass Valley is a City born of the gold rush of the 1800’s.

The history of the building of the Holbrooke Hotel started with Stephen and Clara Smith being among the first to invest in the then boom town of Grass Valley. They built the Adams Express Office and the Golden Gate Saloon which sadly, were destroyed by fire in 1855 along with most of Grass Valley. The Smiths rebuilt the popular saloon as a one story fieldstone building with a brick façade, making it safer from the threat of another fire. The Golden Gate Saloon, an integral part of the Holbrooke Hotel, is the oldest, continuously operated saloon west of the Mississippi River.

In 1862 a relative, Charles Smith, built the current structure and named it the Exchange Hotel. It was noted for its convenience to the local Gold Exchange. When the Gold Exchange was closed, 18 ounces of pure gold was found. In 1879 the hotel was purchased by Ellen and Daniel Holbrooke who gave the hotel its present name.

Over the years, the Hotel has hosted many famous guests that included Presidents Ulysses S. Grant, Grover Cleveland, Benjamin Harrison, James Garfield and prize fighters, “Gentleman Jim” Corbett and Bob Fitzismmons. Famous authors Mark Twain and Bret Harte were also guests of the Holbrooke Hotel. The hotel was also frequented by entertainers Lola Montez, Lotta Crabtre and Emma Nevada. Some say that the infamous highwayman, Black Bart was also a guest of the hotel.

In 1974 the Holbrooke Hotel was declared a California State Landmark and proudly displays a plaque at the entrance to hotel commemorating that declaration.

The hotel is now under new management and will continue to provide top notch service. They have a splendid dining room; the Golden Gate Saloon is there much like it was in the 1800’s. You have a choice of staying in Victorian appointed rooms or suites. If you would like to relive a little of the past, with fine food and service, I recommend the Holbrooke Hotel to you.
For reservations, go to this link Holbrooke Hotel

Real Estate

Fannie Mae Eases Credit To Aid Mortgage Lending

March 18, 2009 jd

foreclosuresign
Fannie Mae announced that in order to help ownership rates among minorities and low-income consumers, they are going to ease the credit requirements on loans it purchases from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Quoting the New York Times:

“In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

OH, BY THE WAY, THE DATE OF THIS PUBLICATION WAS SEPTEMBER 30, 1999
Read the article at New York Times

Real Estate

AIG, Bad Management Gets Rewarded

March 17, 2009 jd

company
So what do you think of AIG receiving $160 million dollars in bonuses? AIG (American International Group) is an international insurance and financial services organization. You may know that’s only part of a larger package of $450 million of bonuses that are due by contractual agreement with upper management. Who is running AIG anyway? How can a company that was facing bankruptcy ever come up with a contract that awards money to executives that can’t manage?

AIG received $170 billion in bailout funds and may need more. Some pundits are saying so what, that the bonus payout only amounts to .0097 of one percent of the total bailout monies given to AIG. Are we missing the point here? You reward bad management because it’s only a pittance of the company’s bailout or earnings?

I think that executives that receive large salaries and bonuses lose touch with what’s going on in their company. Receiving large amounts of money, private jets, all kinds of perks, places the CEO’s and managers in their own separate world, far removed from day to day operations. You only have to look at Merrill Lynch’s CEO, John Thain, remodeling his office in the amount of $1.2 million dollars along with giving a couple of billion dollars in bonus as the company failed and had to be taken over by Bank of America. Hey, if you’re going to get that kind of money win or lose, what’s the incentive to make sure your company is going to make money? Whatever happened to the concept that your earnings are tied to the earnings of the company you’re running?

Here’s a comment from Jessie M. Fried:

“If the government were to go in now and try to renege on these contracts, people would just leave the company and the company would collapse,” said Jesse M. Fried, a University of California, Berkeley law professor and co-director of the Berkeley Center Law, Business and the Economy.

Excuse me, in this job market, if the managers don’t get a bonus, where are they going to go? In fact, I understand that some have gotten their bonus and then quit. Finally, here’s a little more detail of what American International Group bonus payouts were.

Fox News reports “New York Attorney General Andrew Cuomo says 73 employees at American International Group received bonuses of $1 million or more, with one receiving more than $6 million.

In a breakdown of the figures, Cuomo reported that the top recipient at AIG got more than $6.4 million and the top seven received more than $4 million each.

“These payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout,” Cuomo wrote. “Something is deeply wrong with this outcome.”

Yes, there is something wrong with this outcome and with a lot of the upper management of our large companies.

Travel

Buenos Aires, March, Friday the Thirteen

March 16, 2009 jd

The smaller building on the right is the Metropolitan Cathedral accross the street from The Plaza de Mayo

I decided to go to the Museo de la Polica Federal on Friday the 13^th . My trustee handbook of Buenos Aires (three years old) said that the museum was open Tuesday through Friday. Therefore, of course, it was closed. Do not carry a three year old guide book with you, spend the money and buy an up to date tour book when you travel. I already found a couple of night clubs that were permanently closed that were mentioned in the book as a good place to go.Anyhow, the museum focuses on uniforms, badges and weapons over the ages. According to the guide book, it also has a truly gruesome room dedicated to forensic medicine, which includes dismembered bodies and other unpleasant sights. Not mentioned in the museum is the sadistic role the Federal Police had in the Dirty Wars of the 1970’s. Maybe it’s just as well that the museum was closed. The museum is located at San Martin 353 if you are in Buenos Aires and care to visit it.San Martin Street is near the Plaza de Mayo.

The Plaza is the exact location that the Mothers of the Plaza De Mayo marched for many years, during and after the dirty wars of the 1970’s. The mothers were women who had had their children kidnapped by the military to be tortured, murdered and never heard from again. The women marched to bring public awareness of what atrocities the military government was committing during the 1970’s Dirty War. This was a period when the military overthrew the government and took control of Argentina. They were responsible for up to 30,000 people disappearing. The mothers’ bravery finally put enough pressure on the military government to restore the country back to an elected civilian government.So leaving the closed Mueso de lan Polica, I walked over to the nearby Plaza de Mayo. Across one of the streets of the Plaza de Mayo is the Metropolitan Cathedral. The present building’s construction started in 1752 and built under the direction of Antonio Masella. The design is that of a Latin cross basilica. It was finished in 1822 (And you say your contractor is slow?) In 1827 a portico was built in a French neoclassical style. This is a wonderful building which is really a piece of art, I highly recommend a visit to the Cathedral if you are in Buenos Aires.

Inside the Cathedral. Notice the huge columns.

Leaving the Cathedral I walked over to the nearby National Historical Museum. The location that houses this museum was originally built in a location chosen by Juan de Garay when founding the city in 1580. It was remodeled in 1621, however in 1632 it was abandoned due to the threat of collapse.In 1731 the building was totally reconstructed and remains now almost as it was originally designed. The museum is a curious mixture of different things, as are many of the Buenos Aires museums are that I’ve gone to. There is an exhibit of lighting throughout the ages, such as candles, candle molds all the way to the present day florescent energy saver lights. Then there are portraits of famous Argentineans, pictures of jail scenes, a reconstruction of an old jail cell (The original structure had a small jail) and stocks. What I mean by stocks are those wooden blocks of wood with hinges and holes in them so you could stick a person’s head or legs through them as punishment. (I’m sure some of the people who had their money stolen by Bernard Madoff would like to see stocks make a comeback)

Real Estate

Jon Stewart vs Jim Cramer

March 14, 2009 jd

dragon
It seems bad enough that as I wrote in my blog yesterday, when subprime mortgage loans were showing signs that they were toxic, Wall Street simply re-packaged subprime mortgages into a new costume and called the loans Al-A mortgages. In other words, they took the subprime loans and called it by a different name. Both subprime and Alt-A loans were sold across the financial industry as funds called securitisatins. Insurance firms who bought the re-dressed Alt A securitisatins will be forced sellers since they cannot hold securities below investment grade.

Now, watching Jon Stewart weight into Jim Cramer, it’s obvious that Wall Street has been playing with our 401K and retirement funds. Cramer admitted under stress, that Wall Street is taking our funds and playing the stock market with it by short selling. He also admitted that he did short selling and at one time advised people that it was OK to do so. But now he says that it should be stopped!

I’m the last one to believe in Government intervening in the public sector, but the boys on Wall Street are playing with your money and mine. So where was the oversight of Bernard Madoff, Sir Allen Steward, the repackaging of the subprime loans, the large intuitional short sellers that can sway the market? Are we asking the fox to guard the hen house?

Many people are being forced into foreclosure because they are losing their jobs and can’t afford to make their mortgage payments. You know, people who are saying that the Government should not help people who are defaulting on their mortgage may be right. Maybe Wall Street and the banks should be the ones bailing out the homeowners that have lost their jobs because of their greed.

If you missed the show here is the link

Real Estate

Subprime Foreclosures, Move Over for Alt-A Foreclosures!

March 13, 2009 jd

pick1
Gone are the days when subprime loans were what kept bankers up at night, thanks to explosions in other corners of finance. But, In terms of toxicity, subprime loans had no equal. That is until now. The loans of better heeled people are now beginning to go bad at an alarming rate.Alt-A troubled loans have already brought down some banks, including IndyMac, a California bank. Mooney’s, a rating agency, has recently quadrupled its loss projections on bonds backed by Alt-A loans. It now projects losses for 2006-2007Alt-A securities to top 20%, compared to a historical average of under 1%.

The problem is that much of the Alt-A lending came at the tail-end of the credit boom in late 2006 and 2007. By then subprime was already getting a bad name. So Wall Street hit on a ruse. What it did was to take borrowers who in normal times would have been subprime and dressed them up as mid-prime! Many of these loans were doomed from the start. According to the Bank for International Settlements, a staggering 40% of these American mortgages originated in the first quarter of 2007 were interest only or negative amortization loans.

Alt-A mortgages, were offered to borrowers sandwiched between subprime and prime. These loans were supposed to be for people who had reasonable credit standing but unsteady income, such as the self-employed. The lending institutions had very low standards for these loans, using scant documentation and any way to make a loan, such as exotic negative-amortization mortgages, which allow borrowers to pay less than the accrued interest, with the difference added to the loan balance. Like I said before, the main requirements were to put a mirror in front of your face, if the mirror steamed, it meant you were breathing and you had a loan.

Analysts at Goldman Sachs put possible write downs on the $1.3 trillion of total Alt-A debt, including both securitized and un-securitized loans, at $600 billion, almost as much as expected subprime losses.

So, prepare yourself for another wave of foreclosures, this time the Alt-A mortgages, due to poor lending practices by banks and Wall Street.

Real Estate

Octo- Mom Gets New House and Other Revelant Real Estate News

March 11, 2009 jd

Large building in back is Puget Automaker's Office Building in Buenos Aires (Possibe quarters for Octo-Mom?)

Nadya Suleman’s the gal that just had eight more children, along with the six she already had, is going to have to move. Seems like the house she is living in is owned by her mom, which is being foreclosed on. The news is that the family is about $20.000 behind in their mortgage payments.

So what is she to do, well, don’t worry, her father is buying her a bigger and better house. Seems like Nadya’s father is buying her a home in La Habra, south of Los Angeles for $564,000, that’s right over half of a million dollars. The home is around 2,500 square feet and features four bedrooms, three baths and a large fenced in backyard. Well one house foreclosed, another taken off the market, have to look at the bright side of things.

Let’s see, if Nadya sleeps on the couch, and you take 14 kids and divide it by four bedrooms, that’s 3.5 kids per bedroom. If she has two more, then it would be a better fit, 4 kids per bedroom. (Don’t tell her that)

Nadya gave birth to eight children in January when she already had six.

I’m not going to go into the fact that some homeowners are thinking of letting their house foreclose or just walk away because their house is worth less than their mortgage. I hear this more and more recently. So what are you going to do if you let your house foreclose? You can’t buy another house for five years, and if history is any clue, the value of the house you left behind will be more then the mortgage you walked away from. Well, I guess I did rant a little?

Real Estate, Travel

Refinancing? Be Careful

March 10, 2009 jd

Tile mural in subway at station Plaza Italia, Buenos Aires (I'm still here)

Along with scams to help you avoid foreclosure, which I talked about in the past, there are others out there trying to take money away from home owners in distress who need to refinance because they are facing foreclosure or those whom are just refinancing to get a lower interest rate on their mortgage.

Rule number one is that you never pay in advance to have someone help you get a loan. Some banks or lenders may require that you pay upfront for an appraisal, which can run between $300 to $450 at the most. However, my experience is that you are better off using your local bank, mortgage broker or credit unions before you pay for anything, which at the most would be an appraisal. Companies outside your home area are not familiar with local real estate conditions and you may spend several weeks or months until you find out they can’t make the loan. I was surfing the net, looking for some information to bring you that might be of help if you are considering refinancing and the pitfalls that I was talking about.I happened to come across Attorney General’s website, Jerry Brown, and he has prosecuted some scam artists. These scammers were taking advantage of people trying to refinance by charging upfront fees of between $1,500 to $2,500 and doing nothing. Here is part of his press release:“In November 2008, Attorney General Brown announced the break up of the First Gov scam ring. First Gov, — which also operated under such misleading names such as Foreclosure Prevention Services; Resolution Department; Reinstatement Department; and Reinstatement Processing — solicited hundreds of homeowners, offering to help them stop the foreclosure of their homes.Ring members promised victims they would renegotiate their mortgages and reduce monthly payments. They demanded an up-front fee, ranging from $1,500 to $5,000, to participate in the loan-modification program.

Victims were told to stop making mortgage payments and communicating with their lender because this would interfere with the loan modification process. After collecting their fee, ring members pocketed the money and did nothing to help victims.”

The full text of his press release is at Office of Attorney General

By the way, talk to your mortgage company if you can, but so far they have been dumb and want you to stop making payments before they will talk to you!

Real Estate, Travel

Jon Stewart Blasts CNBC

March 9, 2009 jd 1 Comment

: Another picture of a professional dog walker. Possible new occupation for some of the people on CNBC (I’m still in Buenos Aires and I love dogs)

I love comedy. Comedy takes a complex situation and makes it so easy to understand. This was so much so with the Comedy Central’s skid by Jon Stewart taking on the high and mighty prognosticators of stock market trends on CNBC. Those advisors on CNBC are always full of advice of which stocks to buy, interviewing CEO’s of large companies and glowing about their potential outcome. Jon Stewart shows several of these interviews by them. He then shows the outcome shortly afterwards where for all of their wisdom the companies fail. I love the interview shown of Sir Allen Stanford, a billionaire at the time of the interview on CNBC. Shortly after the interview, the FBI stated that they think Sir Stanford is running a Ponzi scheme.

But the most telling part of the program was when they showed Rick Santelli ranting and raving at the Obama Administration for giving a small portion of the bailout money to homeowners facing foreclosure. Wow, what a rant. (By the way, Santelli was supposed to appear on the show, but didn’t show) But Jon Stewart puts it all in perspective when he proceeded to show that these icons of prognosticators had no problem with the present and past Administrations giving billions of bailout funds to banks, General Motors, Chrysler, AGI and other large companies.

You know it’s easy to place the blame on people facing foreclosure because they should have known what they were getting into when they took out a loan to buy a house. But who set the standards for these loans? It wasn’t the Realtors or the mortgage brokers or the homeowners. Yep, it was the banks setting the lending standards, enticing people into buying a home with low interest rates. Once people bought a home, the loan was set to trigger into a higher interest rate. Don’t you think the banks knew some people could not afford the mortgage? In the old days they called that bait and switch. Now who is getting the majority of the bailout funds, hummm, of course, the banks.

I don’t know what CNBC’s qualifications are to hire Rick Stanletlli or any of the other interviewers. Is it that they are highly educated to help people lose their money, or are they poorly trained psychics? So Rick and his cohorts are hired by CNBC to advise people of the best stocks to buy, and they are almost always 100 percent wrong, so why are they picking on people who are losing their homes? Is it because the homeowners are not as educated in financial matters as they are and should have never bought a home? (Or their stock recommendations)

Like Jon Stewart said, “If I had listened to them, I would be a millionaire, that is, if I had started out with $100 million.” Their coding is screwed up so here’s the best i could do here’s the link to the video.

Real Estate, Travel

Trip to a Museum & Bits & Pieces in Buenos Aires

March 7, 2009 jd

Friday I went to the Museo Nacional De Arte Decorativo or National Museum of Decorative Art. First an update of what’s happening here. The peso was propped up Thursday by the Central Bank and state run banks as they heavily intervened in the market to stop the peso from further weakening. The US gained two cents on the peso Friday, its highest value since 2002. When the banks offered $100 million dollars of its reserves, the peso settled at 3.622 pesos to one dollar. It’s the pesos lowest level since November of last year.

If you think that your credit card interest rate is high, how about the interest rate for commercial construction in Argentina? Argentine President Christina Ferandez complained about “the usurious interest rates” banks are charging private companies for infrastructure works. “Local banks have offered rates of up to 40 or 41 percent” she blasted. Of course Argentina is presently having a 20 percent inflation rate and real estate in Argentina is bought for cash, no low down payment and 30 year mortgage.

Back to the museum, the original structure was built by Mr. Matias Erazyriz and his wife Mrs. Josefina De Alvear. They resided in this huge palace with their two children. The palace was the hub of many major social events until Mrs. Alvear passed away in 1935. The remaining family sold the palace along with the art collection to the Argentine Government shortly thereafter.

The museum is huge, with four floors and a basement that was used for servants, boilers and garage. The museum holds over 4,000 exhibits, some dating back to the 15^th century. It is well worth going to this museum if you happen to be in Buenos Aires. Just the workmanship of the building itself is worth the trip. The museum is located at Av. Del Libertador 1902 in Buenos Aires. Their website is Nacional De Arte Decorativo

So I called the bank again, after paying to rent a computer to get all the information the previous agent wanted. I gave a new agent my card number, social security number and said, now do you want my mother’s name, my address and she cut me off and said “Oh, no you’ve given me enough information.” (Grrr!) She got off the phone for a few minutes, came back and said they were upgrading my card, which was the problem, they were taking care of the problem now and I should be able to use my card in a few hours. So today, I was able to use my card, its fun dealing with a bank, NOT!

Professional Dog Walkers, There are many of Them in Buenos Aires

Prior to traveling abroad, I advised my bank that I was traveling to Buenos Aires. What a surprise when I went to draw out some money and my card was rejected! Calling the international toll free number listed on the back of my card, (which does not work here in Buenos Aires), I was asked for my card number, my social security number, my address, my mother’s name, and then what was the last deposit or what was the last expenditure or my account number. After 10 minutes, having none of that information, I gave up, went on line and got all the information that the agent for the bank requested.