Always right...never wrong...

Former Bakersfield Realtor set to accept plea deal 11/04/2013 03:14 PM11/04/2013 03:20 PM Carl Cole plea agreement (749 KB) BAKERSFIELD, CA -- Former Bakersfield realtor Carl Cole is set to accept a plea deal in Fresno federal court Thursday. Cole tells 17 News he will plead guilty to one count of mail, wire and bank fraud. He says he's not entirely nervous and that his family has been very supportive. "Well I am not afraid of it. Everything happens for a reason, I know that sounds cliché, everything happens for a purpose," Cole told 17 News Monday morning. Cole said with all things in life, you have to take the good and the bad. As part of the deal, Cole will serve at least 8 years in prison plus five years of supervised release. David Crisp, Carl Cole and eight of their family members and associates face federal fraud charges. They were indicted and accused of operating a mortgage fraud scheme that bilked investors out of millions of dollars. As part of his plea, Cole is being asked to forfeit $30 million that the U.S. Attorney's office says is a reasonable reflection of the money he obtained through the scheme. Cole said he plans to use his time in prison wisely. He said he has been doing some research on different prisons and hopes to go to one that offers continuing education. He said he'd like to earn another degree while incarcerated. Cole's son, Caleb, is also set to enter a guilty plea on Thursday. A former Crisp and Cole employee, Jayson Costa, made tentative plans to enter a plea agreement on Thursday as well. A second former employee, Sneha Mohammadi, is set to enter her plea in court Tuesday. Copyright 2013 kget.com Nexstar Broadcasting, All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. http://www.kerngoldenempire.com/news/local/story/former-bakersfield-realtor-set-to-accept-plea-deal/d/news/local/story/nh0Qficj-EukSZVyLV3Vbg

BAKERSFIELD BUBBLE MARKET CALL - The bottom is in!

Former housing bubble BEAR and the man (ME) whole predicted this financial mess says the following:

I am officially calling a bottom in the local housing market and saying its a good time to buy a house, IF you can afford the payments (no more than 30% of monthly income), put down at least 10%, have good credit to afford a low FIXED RATE interest loan and have 6 months of cash reserves (to cushion the blow of the unexpected, job loss, medical bills, etc..).

Will the house prices continue to drop...probably another 5-10%. But if you put down 10% you will be able to cushion the blow.

Right now median house prices are less than 2.6 times median income..during the boom we were at 8.1 times, clearly unsustainable

Final post

Thanks to all the visitors who come to this site daily.

I have decided to do something else with my free time. I have enjoyed posting on the collapse of our local bubble economy on this site and on the bubble blogs for nearly 4 years. Its time to move on. The economy will suck for sometime and so will the housing market.

I especially want to thank those who emailed me with comments thanking me for saving them hundreds of thousands of dollars (by not purchasing a home) and saving them from financial ruin (I truly appreciate those comments!!).

Good luck and best to all!

Gottchalks to file for bankruptcy?

Gottchalks update:

Gottschalks employees have been told to quickly cash pending paychecks and to expect a bankruptcy filing as soon as today, the Business Journal has learned.

Employees say the department store chain may also announce the closing of about 15 stores.

Meanwhile, Gottschalks executives have also made contact with at least one major liquidation firm that specializes in going out of business sales for distressed retail operations.

On a more hopeful note, Women’s Wear Daily, a retail trade publication, reported on its website today that Gottschalks has been in negotiations with Everbright and El Cortes Ingles that would call for both to put up $25 million for a $50-million infusion into the company and that a vote on the proposed investment could come as early as today.

El Cortes Ingles is Spain’s largest department store chain and owns about 16 percent of Gottschalks through the Fresno-based retailer’s 2000 acquisition of Harris Co.

Valley dairy industry in bad shape

Let me be the first to say I have no sympathy for these greedy dairyman!

They are partly responsible for driving up our land and home prices during the boom with their 1031 money. In addition they receive massive goverment subsidies and most of them are very wealthy because of it. Finally, they are horrible polluters of our air and water. I hope 100% of them go out of business and leave town!

Local Bloggers comments:

Comment by takingbets
2009-01-08 07:48:05
my husband talked to a local dairyman yesterday. He said in the 40 years he’s been in business he’s never seen anything like what’s happening now. His pricing for milk and cheese is the lowest he’s ever charged and yet the grocery stores are not passing the lower prices down to their customers. Business has virtually stopped, he is not able to move his products because the end users are not buying like they used to.

Ny Times.com:

FOWLER, Calif. — The long economic boom, fueled by easy credit that allowed people to spend money they did not have, led to a huge oversupply of cars, houses and shopping malls, as recent months have made clear. Now, add one more item to the list: an oversupply of cows.

And it turns out that shutting down the milk supply is not as easy as closing an automobile assembly line.

As a breakneck expansion in the global dairy industry turns to bust, Roger Van Groningen must deal with the consequences. In a warehouse that his company runs here, 8 to 20 trucks pull up every day to unload milk powder. Bags of the stuff — surplus that nobody will buy, at least not at a price the dairy industry regards as acceptable — are unloaded and stacked into towering rows that nearly fill the warehouse.

Mr. Van Groningen’s company does not own the surplus milk powder, but merely stores it for the new owners: the taxpayers of the United States. To date, the government has agreed to buy about $91 million worth of milk powder.

Dairy scum in a dispute:

The Borba cousins — Kern’s leading dairy luminaries — are suing each other over fallout from a $42 million-plus deal they made last year.

In brief, cousins George Jr. and James each seek roughly $3.5 million from the other and lob some nasty allegations along the way, court documents show. The dispute concerns a lease agreement for land used to grow feed.

Dick Cheney is a blind idiot!

Bush and Cheney start re-writing history:

WASHINGTON – Vice President Dick Cheney says that his boss, President George W. Bush, has no need to apologize to the American people for not doing more to head off the financial calamity, saying no one saw the crisis coming.

During an interview Thursday with The Associated Press in his West Wing office, Cheney defended the administration's performance on an economy that is growing weaker daily and which recently collapsed in spectacular fashion. Cheney said that "nobody anywhere was smart enough to figure it out."

He said Bush doesn't need to apologize because he has taken "bold, aggressive action."

Notices of default set a new record.

County of Kern Link

1,553 NOD's for December. The highest ever!


I recall one of our posters saying that the bottom was in for NOD's. Not sure if we should have believed him...just saying!

Former real estate moguls luxury HQ sold...blogger (me) nails the FMV!

The former HQ for the Twin Towers project was sold in late December 2008. The price was $1 million dollars. See the comments from the orginal listing in May 2007:

Bakersfield Bubble said...
10,000 sq ft x 2.00 x 12 = $240,000 expected gross rent. Since the project is not improved and has no tenants I will use a cap rate of 12% = $2,000,000. Then discount 50% = $1,000,000 MAX!

Here are a few stories on this building:

Crisp HQ listed for $4.5 million (5-1-07)

Crisp defaults on HQ (8-28-07)

Crisp building foreclosed (12-27-07)

Padre Hotel Partnership Launches $18M Renovation

Globe St.com:

BAKERSFIELD, CA-A group called Padre Hotel Partners LP has launched an $18 million renovation of the Padre Hotel. The renovation of the 10-story, 80-year-old hotel at 1813 H St. will rehab the interior in a plan designed to restore the property to its previous popularity.

Graham Downes, principal of San Diego-based Graham Downes Architecture, has partnered with Brett Miller, CEO of Eat Drink and Sleep, also based in San Diego, to form Padre Hotel Partners. Located in the historic area of Bakersfield, the hotel has been redesigned by Graham Downes to “bring life back to this once-popular attraction,” according to the architects. Built in 1928, the Padre was long known as one of the most popular gathering places in Downtown Bakersfield. Elements of the hotel’s 1928 origins will be incorporated into the redevelopment to blend past and present and reestablish the Padre Hotel as a landmark, the developers say.

The completed project will feature 112 guest rooms and suites, a restaurant, a bar, nightclub lounge and a 24-hour café. The renovation will include meeting rooms and event space, fitness and business centers, and other amenities to position the hotel as a business and leisure destination.

CONservative republicans get bailed out and Flying J update

Ceberus and GMAC get bailed out. Cerberus is run by Dan Potatoe Qualye, John Snow (former Bush Treasury Sec) and about 10 other CONservative republican lobbyists.:

WASHINGTON (Reuters) - The Bush administration on Monday expanded its bailout of the U.S. auto industry, saying it was buying $5 billion in equity in auto and mortgage finance company GMAC and increasing a loan to General Motors by $1 billion.

The action was the latest in a lengthy series of emergency government moves aimed at easing the worst credit crisis since the 1930s and limiting the severity of a year-long recession.

The Treasury Department said it would buy $5 billion in senior preferred equity with an 8 percent dividend from GMAC as part of an effort to ensure the solvency of a company considered crucial to GM's survival.

Flying J Update (& Berry Petroleum):

Flying J's bankruptcy has prompted at least one of Kern's large oil companies to scale back production here and other local suppliers to seek out new customers for crude.

The Big West refinery on Rosedale Highway may even have stopped refining oil -- at least temporarily -- as a result of the Dec. 22 Chapter 11 bankruptcy filing of owner Flying J Inc.

But questions remain as to what the company is doing now that some local oil producers are so worried about being paid that they won't sell crude to Big West.

On Monday, one of Flying J's biggest creditors, Denver-based Berry Petroleum Co., said in a federal filing that Big West last week turned away its oil shipments because of "interruptions in (Big West's) other
relationships."

"They're not refining right now," Berry Chief Financial Officer David Wolf said in an interview. He added that Big West may have shifted to plant maintenance.

For its part, Berry has cut way back on Kern oil production because of Big West's dilemma. On Sunday, Berry's filing said, the company was producing 5,000 barrels a day in Kern instead of the normal 17,000.

Another bubble bursts...another prediction comes true

Recall my post from Sep 2007 regarding the bubble in Almonds. Keep in mind that 80% of the worlds almonds are grown in the Valley. I sure hope John Madden doesn't lose too much money...


Bakersfield.com:

That said, more than a few growers are sweating over a recent dip in the price of almonds, which had previously risen enough to fuel explosive growth in plantings.

Almonds were Kern County’s fourth largest agricultural commodity last year, according to the Kern County Agricultural Crop Report.

Tejon Ranch Co., the Lebec ranching and real estate development company, said in a quarterly report filed with the Securities and Exchange Commission that it received $1.78 per pound for almonds in September. That’s down from a peak of $3.80 in the last three years.

Today, almonds are going for $1 to $1.25 a pound, said Mike Young, an almond grower and president of the Kern County Farm Bureau.

Unable to find sufficient buyers, Young has been reduced to warehousing nuts, which keep for about a year.

“We’re just experiencing the global economic downturn like everybody else,” he said. “Nobody’s buying anything right now.”

San Joaquin Bank update

Recent SEC filing by SJB:

On December 19, 2008, San Joaquin Bank (Bank), a wholly owned subsidiary of the Registrant, entered into a consulting agreement with Melvin D. Atkinson (Agreement), who has been an outside director of the Bank since 2005 and a director of the Registrant since its formation in 2006.

The Agreement engages Atkinson to analyze and review the Bank's impaired real estate loans and to negotiate with the obligors under such loans to reduce amounts outstanding. Atkinson will be compensated at the rate of $175 an hour for his services and he will also receive an additional fee equal to 1% of the first $3.0 million received by the Bank and 0.75% of amounts received in excess of $3.0 million. The Agreement is subject to compliance with applicable law and terminable by either party at any time upon written notice.

Recall one of my previous posts where they actually lowered their loan loss reserves at the end of 2007.

Prices now down 50% from the peak

November 2008 numbers are out. We are now down 50% from the peak. The year-over-year decline is 40%; anyone who told you to buy last year was dead wrong and should be sued...look in the archives for the list of crooks.

Nov 2008 yoy:

Bakersfield -40.2%

Fresno economy is so bad it can't support a crappy minor league sports team

Minor league hockey team (Chicago Blackhawks affiliate and Bakersfield rival) folds like a cheap suit:

"The board of governors advised us Friday that for financial reasons the Falcons were ceasing operations," McKenna said. "That's a violation of league bylaws, which results in automatic termination. Fresno's ownership came to the determination that it couldn't move forward and decided to fold."

McKenna said Falcons players have been declared free agents and can sign with any of the ECHL's remaining 21 teams.

The Fresno Falcons ice hockey team will cease operations at 5 p.m. today, the club's managment announced.

"These losses have been beyond our expectations," Managing General Partner Chris Cummings said in a statement released by the team. "The horrific economy and the resulting decrease in revenue from season tickets, corporate sponsorships and overall attendance has created a situation this year which is not sustainable and we simply cannot continue to operate."

$68.83 per square foot.

Prices continue to decline. Here is a little gem for $68.83 per square foot.

KSFCU Foreclosure:

2115 Butterfield, Bakersfield, Ca 93304
3 Bedrooms
2-1/2 Baths
2
Story
2 Car Garage
1,729 Square feet
Sale Price: $119,000

Crude crash claims first major victim

(UPDATE)Bakersfield.com:

A $200 million revolving line of credit to the Big West subsidiaries from Bank of America, originally set to mature in 2010, was called in Dec. 19, Adams said in court filings, causing Big West to default.

Wasteful ad spender (propoganda spinner) refiner files for bankruptcy protection:

Flying J Inc., an oil company whose operations include the Big West refinery on Rosedale Highway, filed for reorganization bankruptcy Monday.

Operations included in the filing cover about 250 travel plazas, the Big West refining arm and the company’s Longhorn Pipeline unit.

The fuel stops remain open, company officials said in a release, adding the reorganization might be completed without layoffs.

Initial hearings will be held Tuesday afternoon in Delaware district bankruptcy court, where the various companies filed voluntary Chapter 11 petitions.

The largest unsecured creditor of Flying J, which operates out of Utah, is Zion Bank, owed $85.8 million.

Most of the 30 others listed in court documents are oil companies, including Conoco Philips, BP & Oil Co., Valero, Occidental Energy Marketing and others.

Berry Petroleum, which moved headquarters from Bakersfield to Denver in June, is the third largest unsecured creditor, owed $26 million.

Flying J details:

...it faced near-term liquidity pressure from an unprecedented combination of
factors: the precipitous drop in the price of oil and the lack of available
financing from our traditional sources due to disrupted credit markets, said
Flying J President and CEO J. Phillip Adams in the news release. Adams says the
company's employees, customers and suppliers will continue to be paid in the
usual manner.

Flying J Inc. is among the 20 largest private companies in America,
employing more than 16,000 people in the U.S. and Canada.

Fresno California nearing depression.

Fresno Unemployment Explodes:

Fresno County's unemployment rate climbed in November to 12.1% as a gain in health and teaching jobs failed to offset losses in agriculture, trade, government and construction, the state Employment Development Department reported today.

The jobless rate increased from 11.3% in October and 8.9% in November 2007. Officials noted that agriculture lost 4,500 jobs between October and November, and construction employment declined by 1,300 jobs in the year-over-year period. government also lost 1,000 jobs in that period.

Freno RV dealer throws in the towel:

RV king Dan Gamel, struggling with a lousy economy, closed all but one of his dealerships Friday and laid off 150 employees for three months while he sells motor coaches online and by appointment.

The Camp America store on Shaw Avenue and dealerships on Highway 99 in south Fresno, in Modesto and in Rocklin are closing until spring, Gamel said. The Redding outlet is staying open because the store is profitable, he said.

All the real estate -- totaling 85 acres with much of it on prime frontage -- is for sale.

"It doesn't make sense to be in business the way we are in this economy," Gamel said. "I thought we could make it and hang on, but every month brought a
more dire situation."

Gottchalks update:

Gottschalks Inc. announced this afternoon that it remains in negotiations with a Chinese company to keep the Fresno-based department store chain afloat.

Earlier this week, Everbright Development Overseas Ltd. terminated a deal it had reached in November to provide a $30 million investment in Gottschalks in exchange for a majority stake in the 104-year-old company. In a filing Thursday with the U.S. Securities and Exchange Commission, Gottschalks officials reported that Everbright had terminated the agreement following a due-diligence period that expired Monday.

Retail industry analysts say the cancellation of the November deal is an ominous sign for Gottschalks unless another arrangement can be made very quickly.

Gottchalks update

Bakersfield.com:

FRESNO — Officials with department-store chain Gottschalks Inc. say a company based in the British Virgin Islands has severed plans to invest $30 million to help them develop a wholesale business and implement direct sourcing and consignment product sales.

Paperwork filed Thursday with the Securities and Exchange Commission shows Everbright backed out of the deal with the Fresno-based chain of 59 department stores.

Tulare Business Journal (no link):

Gottschalks (Pink Sheets: GOTT) tumbled deeper into penny-stock territory Friday morning after a Chinese company backed out of an agreement that would have given the troubled retailer a cash infusion of up to $30 million.Gottschalks traded as low as 14 cents per share Friday morning, down 69 percent from Thursday’s close of 45 cents. That broke below its previous all-time low of 22 cents per share set Nov. 21.

The latest selloff gave the company, which has annual sales of almost $600 million, a market valuation of less than $2 million.Gottschalks, which operates 59 department stores and three specialty stores in California and five other Western states, has lost $32 million in the past seven quarters, including almost $20 million in the first three quarters of this year, as a result of the tough economy and questionable strategic moves.

Industry analysts are now pondering the immediate future of the retailer. If suppliers who were bolstered by the deal's prospects cut Gottschalks off, it could be forced to begin a liquidation with closure sometime next year, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York.

"Gottschalks needs divine intervention," Davidowitz said. "They are in a very tough place."

Sr Employee sells some shares earlier this month.

Boycott GM and Chrysler!

BOYCOTT GM AND CHRYSLER!

$17 billion dollar loan with no provisions:

NEW YORK (MarketWatch) -- The White House announced plans Friday to extend $13.4 billion in loans to troubled Detroit auto makers, with another $4 billion likely available in February, citing the need to avoid "disorderly liquidation" during an already troubled economic period.

$23 BBL. The oil bubble.

7 year chart...clearly a bubble!

One year chart

Kern River Crude hits $25 bbl

The price of Kern River crude continues to tumble, hitting $25 bbl today.

I have heard of some oil service companies starting layoffs as they think the price will continue to decline.

How much lower will prices go? Anything under $20 per bbl and the shit starts to hit the fan.

California getting closer to bankruptcy

California freezes $3.8 of projects:

The state's top three financial officials voted unanimously today to freeze $3.8 billion in financing on road, levee, school and housing construction projects throughout California in the most drastic fallout yet from the state's cash crisis.

Among the efforts that will be idled or postponed are a carpool lane on the 405 Freeway between the 10 and 101 freeways and $373 million in repairs and overcrowding relief for Southern California schools, including emergency repairs at nine Los Angeles Unified School District high schools and five Compton schools, according to lists compiled by state agencies.

Cal Pers loses 103% on real estate investments:

At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America.

Partly because of these investments, California Public Employees' Retirement System is struggling to avoid one of its worst annual declines since its 1932 inception. Calpers has lost almost a quarter of its assets since July 1, the start of the current fiscal year.

Adios.

Bakersfield.com:

El Mexicalo, a weekly bilingual newspaper published in Bakersfield since 1980, has closed due to concerns about the slowing economy

Manzano said she chose to cease publication following the Nov. 13 issue because advertisers are cutting back on spending

Bank Failure Friday...Texas Bank:

On Friday, December 12, 2008, Sanderson State Bank, Sanderson, TX was closed by the Texas Department of Banking and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this
institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should answer many of your questions.

Bank failure Friday...Georgia Bank:

On December 12, 2008, Haven Trust Bank, Duluth, GA was closed by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should answer many of your questions.

Carl Cole, Racetrack in default and other news

Carl Cole Update:

As the clock ticks down on former Bakersfield real estate broker Carl Cole’s deadline to legally challenge his license revocation, Cole continues to work at a real estate agency in Thousand Oaks under the name of one of his defunct companies, Points West Group

But Points West, which has one active listing for a house in Oxnard, is not properly registered with the state Department of Real Estate, said spokesman Tom Pool.

When asked if the department was looking into the matter, Pool said he “cannot comment on that.”

As of Wednesday, Cole, 61, is described as an “administrative assistant” on his Web site, http://www.yourecoteam.com./

The supervising broker is a former employee of Crisp & Cole Real Estate, the flamed-out partnership of Cole and former sales agent David Crisp, 29. The Department of Real Estate revoked Cole’s license Nov. 14. Points West Group also entered “revoked” status then, where it officially remains.

College degrees not worth the money?:

Lisa Pinson, 23, earned her communications and media studies degree from Azusa Pacific University in Los Angeles in May, but moved back in with her parents in southwest Bakersfield after she was unable to find employment in her field.

The media are among industries hardest hit by the recession. Publications and broadcasters across the nation are cutting staff.

Pinson is trying to be optimistic, and keeping an open mind about applying for jobs unrelated to her major. She doesn’t regret the field of study she chose.

“I know a lot of people who are art majors and film majors who haven’t got a chance,” she said.

“Even the supposedly safe majors aren’t as safe as they used to be. I know some business majors who are working in telemarketing, so it could be worse.”

Would you buy a car from a dealer when the company is bankrupt?:

General Motors Corp. has hired lawyers and bankers to consider whether to file for bankruptcy protection, said several people familiar with the matter, while Senate lawmakers embarked on a last-ditch effort to break an impasse on Congress's auto-bailout package.

GM management recently tapped bankruptcy veteran Harvey Miller of the New York law firm, Weil Gotshal & Manges LP, to handle what would be one of the largest and most controversial filings in U.S. history. Others involved in the matter include restructuring veterans Jay Alix, Evercore Partners' William Repko and Blackstone Group's Arthur Newman.

Racetrack in default:

A $4.5 million loan taken out against the future Kern River Raceway property last March has defaulted, county records filed last week show. A default is the first legal step in a possible foreclosure.

The project has already drawn numerous lawsuits and liens from construction companies seeking payment for work at the site.

Debt from those is more than $2 million, records show.

The half-mile, paved track broke ground in February 2007. But the sagging housing market blindsided the project when financial backer Alan Destefani, a Bakersfield farmer, had a large sale of ag land fall through that spring.

Since then, racetrack partners have been scouring leads to find financing as the economy has gone south.

California finances get much worse

The bankers in the previous post said we were at the bottom...:

California’s budget crisis has gotten worse while the Legislature has dithered and taken time off, Governor Arnold Schwarzenegger says.

The state will now be $14.8 billion in the red by the end of the fiscal year in June if nothing is done, the governor says.

The number is new. The last estimate had the red ink measured at $11.2 billion.

“No one should leave town,” the governor says of the Legislature, now in special session but with few lawmakers actually in Sacramento. “I urge the Legislature to solve this financial crisis immediately.”

Mr. Schwarzenegger says lack of action by the lawmakers, who set spending and taxation levels is making the fiscal crisis worse by the day. “I’m frustrated,” he says. “I cannot make them stay here. I cannot lock them into the building. I do not have those kinds of powers.”

35 years in banking and he has no clue

There was an economic meeting in town yesterday and I have a few comments on what was said.

Asleep for 35 years:

A banker with 35 years of experience shared his views on the economy Tuesday with local finance industry professionals and accountants

James Lokey is Rabobank N.A.’s president of community banking and the chairman of the California Bankers Association.

In remarks he prefaced as personal, Lokey said consumer confidence needs to improve and the financial industry is on sound footing.

“Eighty percent of the banks, primarily the commercial banks, had nothing to do with the subprime mess,” he said, speaking to a gathering at Seven Oaks Country Club.

My comments - This has never been a subprime problem. This is a massive credit bubble. Credit in all forms...Residential mortgages, Commercial mortgages, credit cards, CDS, CDO's, SIV's, etc... To say that 80% of the banks are ok because they didn't do subprime only goes to show this guys is asleep and I think he represents a lot of bankers. Many could not see this crisis coming and they still have no idea why it happend.

The banking industry in general is well capitalized, Lokey said, and consumer confidence would be much stronger had the majority of commercial banks told
Uncle Sam, “Thank you very much, we do not need your money.”The economy
is in trouble, in part, because consumers aren’t spending.

My Comments - The banking industry is in no way well capitalized. They (Bush/Paulson) thought the TARP would solve this problem...sorry, didn't work. When these banks need more capital next year, this guy will need to eat his words! Consumers can't spend as much because banks are tightening credit as they are hoarding their capital! Credit is tight for car loans, home loans (non-GSE) and business loans...just look at the Fed's loan officer survey.

Cheerleading?:

“Bakersfield is in great shape,” banker Bart Hill said. “The economy’s coming back.”

My Comment - Then why did you just take a significant charge to earnings for loan loss reserves?

“I think we have a ways to go before we turn the corner,” said meeting attendee Floyd Cogdill, director of student services at National University’s Bakersfield campus.

My Comment - Agree.

High end homedebtors are still dreaming!

Here are a few examples:




This first home is at 2615 EAGLE CREST DR, Bakersfield, CA 93311. It has been on the market for 629 days.

Listing details:

Price Reduced: 05/11/07 -- $1,950,000 to $1,800,000
Price Reduced: 12/03/07 -- $1,800,000 to $1,650,000
Price Increased: 04/14/08 -- $1,650,000 to $1,850,000
Price Reduced: 10/30/08 -- $1,850,000 to $1,650,000

ESTIMATED VALUE PER ZIP REALTY $945,500




House number #2 is located at 11418 HARRINGTON ST, Bakersfield, CA 93311. It has been on the market for 677 days!

Listing details:

Price Reduced: 10/23/07 -- $1,195,000 to $1,095,000
Price Reduced: 02/21/08 -- $1,095,000 to $995,000

ESTIMATED PRICE PER ZIPREALTY $550,000

Old media has died!

LA Times owner may file for bankruptcy:

Tribune Co. is preparing for a possible filing for bankruptcy-court protection as soon as this week, according to people familiar with the matter, in another sign of trouble for the newspaper industry.

In recent days, as Tribune continued talks with lenders to restructure its debt, the newspaper-and-television concern hired Lazard Ltd. as its financial adviser, as well as legal counsel for a possible trip through bankruptcy court, according to people familiar with the matter.

A Tribune spokesman said the company doesn't comment on rumors or speculation. Tribune owns eight major daily newspapers, including the Los Angeles Times, Chicago Tribune and ...

Kern River Crude (Midway-Sunset) now below $30bbl

The price of Kern River Crude dropped to $29bbl today. Are we headed to the teens?

It the price continues to drop, I would expect home prices and the rest of our local economy to get even worse.

I have talked to several local well established businesses that are on the brink of going under. I feel bad for their employees, most of them have no idea they are about to lose their jobs. All of the actions by the government have failed (as expected) and going forward will only make things worse.

It's official...recession began December 2007

NBER website:


Determination of the December 2007 Peak in Economic Activity

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.
Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity.

The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment. This series reached a peak in December 2007 and has declined every month since then.