The LJL Secured High Yield Income

The LJL Secured High Yield Income Fund I, LLC

annualized return to investors as of 12/31/2008 was 9.55%

Diversification

Fully Invested

Compound Interest

Quick

Links

President's Summary

Investor News

Interest Rates

Real Estate

Stock Market

Economic

Indicators

International

Thought for

the Week

Fixing Finance

Treasuries Plunge, Led by 30-Year Bonds, as Debt Auctions Loom

J.P. Morgan Expands Loan Effort

Shares Mixed, Closing a See-Saw Week

'Bad Bank' Regains Favor As Solution for Toxic Debt

Global productivity set to continue slump

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President's Summary

In November the Dow made a low around 7,500 and then rallied into the opening days of 2009. Now it is drifting back to the 7,500 level, with renewed doom and gloom. Unfortunately a successful test of the November lows is required before we can pronounce at least an interim bottom. Even with the lowest home building starts since 1959 the index of home builders seem to be following the same “test of the lows” as the Dow. To date investors fear has fueled the Treasury Bubble by investing at negative returns – this week fear will be tested when the large scale Treasury auctions commence. Higher and a rising trend in government debt interest rates could be the beginning of the deflating bubble that could signal a stronger dollar, a decline in the trade deficit, and quite possibly a return of some confidence in the economic future of the US alerting investors to the great investment opportunities at these low levels. Unfortunately investor psyche is so fragile it may cast doubt on the government’s ability to finance any large scale economic relief package.

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Investor News

“STARTING today,” President Barack Obama declared in his inaugural address from the Capitol, “we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.” In fact his first, urgent task is to remake finance. As Mr Obama spoke in Washington, DC, the markets in New York were sinking under the weight of failing banks despite the promise of a plan from his economic team. Scale is important in this crisis. As the recession rips through the economy, banks are bound to face further losses. Shareholders worry that these losses will continue to eat away at the banks’ reserves. Back in October governments’ promises to save the banks stabilised markets. But in this topsy-turvy crisis these promises are now pressing down on banks’ share prices. If a bank looks about to suffer large losses, investors fear nationalisation is imminent—and head for the exit. This crisis is so huge that seeing beyond it is hard. Yet even now policymakers need to plan for the future of finance—partly to convince voters that today’s rescue is preparing for a better system; partly because finance’s shortcomings and the taxpayers’ guarantees make an overhaul of regulation necessary; and partly because sensible reforms are hard to devise. Having seen finance wreak havoc, the temptation will be to bind it in a regulatory straitjacket. Some tighter regulation is in order, especially if it is aimed at making the system more transparent. But this crisis was born of economic excess as well as financial folly; given the torrent of capital flowing into America, Britain, Spain and so on, almost any financial system would have gone wrong. Financial re-regulation is not the only reform—it may not even be the most important. Yet finance makes the rest of the economy work. Mr Obama’s prize for remaking finance will be measured in prosperity and jobs. The work should begin now.

For the entire article from THE ECONOMIST click here:

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Interest Rates

Treasuries fell, with 30-year bonds losing the most this week in 22 years, as the U.S. readied $78 billion in debt sales over the next five days to finance fiscal stimulus spending projected to swell the deficit to $1 trillion. Yields rose as Federal Reserve policy makers prepared to meet on Jan. 28 to decide the next monetary step aimed at lifting the economy from recession. A government report due next week is expected to show the economy contracted last quarter for the second straight three-month period. Thirty-year yields climbed 43 basis points on the week to 3.32 percent in New York, according to BGCantor Market Data. The gain was the most since bond yields increased 49 basis points in the five days ended April 24, 1987. The price of the 4.5 percent security maturing in May 2038 tumbled 9 25/32, or $97.81 per $1,000 face amount, to 122. The two-year note yield was up seven basis points on the week to 0.80 percent. The benchmark 10-year note yield, used to set corporate borrowing costs and mortgage rates, rose 30 basis points, the most since increasing 35 basis points in the week ended June 13, 2008, to 2.62 percent. Copyright © 2008 Mortgage-X.com Source: www.mortgage-x.com Reprinted with permission

For the entire article from BLOOMBERG NEWS click here:

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Real Estate

One of nation's biggest lenders has embarked on the most ambitious effort to date to lower monthly mortgage payments for borrowers whose loans aren't owned by the bank. J.P. Morgan Chase & Co. is expanding its two-month-old program to modify mortgages to include not only mortgages the bank owns but also more than $1 trillion of loans the bank sold to investors. Faced with political pressure and ballooning losses, banks are racing to modify million of loans by reducing interest rates or lengthening terms. The banks are trying to keep borrowers in their homes and limit their own losses associated with foreclosures. In formulating the plan, J.P. Morgan said it held discussions with about a dozen major trustees that represent investors of securitized mortgages. In some cases, J.P. Morgan needs the approval of trustees before it can modify the mortgages. The bank said it believes it can legally modify the "vast majority" of investor-owned mortgages and will seek investor approval in other cases. "The trustees and investors have been extraordinarily cooperative in getting to the point where we are allowed to do these modifications," Mr. Scharf said. Investors' resistance could stem from concern that they would earn a smaller return than expected and that they shouldn't bear the brunt of poor underwriting decisions made by the bank. J.P. Morgan, however, is betting that investors would rather see that the bank overhaul terms of the mortgages rather than see them slide into foreclosure or have a bankruptcy judge revise the terms.

For the entire article from the WALL STREET JOURNAL click here:

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Stock Market

For Wall Street, a quiet end to a white-knuckled week did little to erase nagging fears about the stability of the financial system and the painful yearlong recession. After lurching between sharp gains and losses for three days, stock markets made few big moves on Friday as investors grappled with more troubling corporate earnings reports. The major indexes recovered from steep early losses to finish mixed for the day, but were down about 2 percent for the week. The Dow Jones industrial average ended 45.24 points, or 0.56 percent, lower at 8,077.56, pulled lower by a 10.8 percent loss by General Electric, which reported that its fourth-quarter profits had fallen more than 40 percent and cut its outlook for 2009. But the broader Standard & Poor’s 500-stock index was 4.45 points, or 0.54 percent, higher at 831.95, and the Nasdaq composite index was up 11.8 points, or 0.81 percent, to 1,477.29 as its roster of technology stocks, including the search engine Google, showed some resilience. Despite Friday’s gains, three punishing weeks have blotted much of the optimism that greeted the start of 2009. The major indexes finished about 2 percent lower for the week, their third week of losses. The Dow, which lost 33.8 percent in 2008, is now down an additional 8 percent since the start of the year. The S.& P. 500, which fell 39.5 percent last year, has also fallen 8 percent this year. As the Federal Reserve’s Open Market Committee meets next week, investors will look for some clues on how the Fed plans to address one of the worst economic downturns since the Depression. The Fed has already slashed its target overnight interest rate to a range of 0 to 0.25 percent and cannot cut deeper than zero, so investors will pay attention to the statement the Fed releases at the end of the two-day meeting. “There’s nothing to do with rates,” Mr. Bittles said. “The statement will be everything.” In credit markets, yields on long-term Treasury debt rose to their highest point in more than a month. Investors prepared for a flood of new debt as the federal government and countries across the world try to spend their way out of the recession. Analysts said that markets were still rattled by a comment from Treasury Secretary-designate Timothy F. Geithner that China manipulated its currency. Investors worried that China might buy less debt from the United States if it was pushed to revalue the yuan.

For the entire article from the NEW YORK TIMES click here:

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Economic Indicators

Bad bank. Good idea. Done deal? Analysts say both Wall Street and Washington are largely resolved to creating a government-run entity to buy troubled assets from banks and other struggling financial institutions. It's just a matter of how and when—and some say, the sooner the better. "Get on with the process of putting a value on these assets and lifting them off the banks' balance sheets," says Robert Glauber, who supervised the Treasury Department's role in the rescue of the savings and loan industry, which included a version of the bad bank concept, the Resolution Trust Corporation. Momentum for the so-called aggregate bad bank asset-purchase plan has built quickly since Fed Chairman Ben Benrnake mentioned the idea in a wide-ranging speech last week. FDIC Chairwoman Sheila Bair referred on Wednesday to the financial-aid options Bernanke outlined, telling CNBC the aggregate bad bank option "might have an advantage in the sense that it actually moves the assets off the balance sheets, freeing up lending capacity."

For the entire article from CNBC click here:

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International Corner

Productivity growth across the world dropped sharply last year and is likely to slump in 2009 as companies retain employees even as their sales and output fall, according to a report on Thursday from the Conference Board, the international business organisation. However, while the trend across the world is for sharply falling productivity because companies are hoarding labour in the hope that a recovery will arrive soon, the experience of different countries is extremely varied. By contrast, in the US, the productivity growth rate rose slightly, from 1.5 per cent in 2007 to 1.7 per cent in 2008. The increase was attributed to the global recession hitting the US earlier and its companies being much more aggressive in firing people than those in other advanced economies.

For the entire article from the FINANCIAL TIMES click here:

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Thought for the Week

If you would know the value of money, go and try to borrow some. ~ Benjamin Franklin

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Contact Us

LJL Funding, LLC the investment manager of the LJL Secured High Yield Income Fund I, LLC, offers you (the investor) an opportunity to invest in (a pool of) real estate secured trust deeds through the LJL Secured High Yield Income Fund I, LLC.

The LJL Secured High Yield Income Fund offers you a high-performance investment, managed by seasoned professionals in a fund with assets that are secured by real estate at loan-to value ratios not exceeding 60% at the date of the loan (based upon the lower of the appraised value or the 30-day sale value as determined by a Broker Price Opinion).

The benefits of investing in our fund include:

Diversification - Your investment risk is spread over multiple loans.
Investment Performance - Anticipated high yields (10% +, but past performance does not guarantee future results)
Fully Invested - Your investment remains fully invested at all times.
Compound Interest - You have the ability to reinvest some or all of your monthly interest thus taking advantage of the benefits of compounding the return.

Investor Qualifications:

Investors have to be bona fide California residents or foreign nationals living abroad.
Investors must have a net worth (excluding home and automobiles) of at least $250,000 and an annual income of at least $65,000 or a net worth of $500,000 excluding home and automobiles)

If you are interested in adding a high yield mortgage fund to your portfolio, or if you are looking to turn your 401k or pension funds into high yield investments, please contact us today and we can help get you on your way to higher returns.

Jim Chung

Senior Vice President
(West Coast)

(949) 351-8747 Mobile
JChung@LJLFunding.com

LJL Funding, LLC

8880 Rio San Diego Dr #500

San Diego, CA 92108

888-456-0246

www.LJLFunding.com

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