The LJL Secured High Yield Income

The LJL Secured High Yield Income Fund I, LLC

annualized return to investors as of 4/30/2009 was 9.16%

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

For Mother's Day, Give Her Reins to the Portfolio

The greater of two evils - Inflation is bad, but deflation is worse

Move by General Growth Rattles Malls' Investors

Market Insider: Wall Street's Bull Is Tired but Not Out

Shift From Spending to Saving May Be Slump’s Lasting Impact

US belatedly learns lesson from Japan

↑ Back to Top

President's Summary

The woes of investors were primarily caused by the frozen credit markets when banks and financial institutions on a global scale lost confidence in each other and resulting in a total freeze of the system. As we have often discussed – the TED spread (difference between the risk free 3-month Treasury Bill and the 3-month LIBOR) clearly reflects the state of the credit markets and the willingness of banks to lend at least to each other. In normal times the spread is lower than 50 basis points; during the height of the crisis it approached 500 basis points and in recent weeks have traded around 100 basis points. During the week under review the spread was in the 70 basis point area. Clearly the results of the banks stress tests have moved the debate from a bottomless pit to a floor with realistic required capital targets. Investors should be breathing easier as we face a more normal market were volatility will still be at the order of the day, but profit taking will not indicate the end of the world.

↑ Back to Top

Investor News

Fess up, fellows: The masters of the universe have turned out to be masters of disaster. No matter which aspect of the financial crisis you consider, there is a man behind it. So, it is worth pointing out, this Mother's Day weekend, how different things might be if the financial world were female. Finance professors Brad Barber and Terrance Odean have found that women's risk-adjusted returns beat those of men by an average of about one percentage point annually. In short, women trade less frequently, hold less volatile portfolios and expect lower returns than men do. On the other hand, in the testosterone-poisoned sandbox of the male investor, the most important thing is beating the other guy; the second most important: bragging about it. The long term is somebody else's problem, and asking for advice is an admission of inferiority. Worrying about risk is for sissies. Leverage is good, since it raises returns -- while the market goes up. Is it any wonder the male-dominated world of Wall Street has boomed and busted every few years for more than two centuries? Women, by contrast, put safety first. Even after controlling for age, income and marital status, women are more inclined than men to wear seat belts, avoid cigarette smoking, floss and brush their teeth and get their blood pressure checked. They even have been shown to be 40% less prone than men to run yellow traffic lights. Women are less afflicted than men by overconfidence, or the delusion that they know more than they really do. And they're more likely than men to attribute success to factors outside themselves, like luck or fate. In 2001, a survey of financial analysts and investment advisers found that women felt it was much more important than men did to avoid incurring large losses, falling below a target rate of return and acting on incomplete information. In short, women are more risk-averse than men. Memo to men: Your household's investment portfolio will be less risky and more diversified if your wife helps manage it. She will share in what comes out of that portfolio down the road; shouldn't she share in what goes into it? Chances are, her ideas and emotions will complement yours, and you will both end up wealthier. At least one of you will end up wiser.

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

↑ Back to Top

Interest Rates

MERLE HAZARD, an unusually satirical country and western crooner, has captured monetary confusion better than anyone else. “Inflation or deflation,” he warbles, “tell me if you can: will we become Zimbabwe or will we be Japan?” How do you guard against both the deflationary forces of America’s worst recession since the 1930s and the vigorous response of the Federal Reserve, which has in effect cut interest rates to zero and rapidly expanded its balance-sheet? There is something to both fears. But inflation is distant and containable, while deflation is at hand and pernicious. So far, expectations of inflation remain stable: that sentiment is itself a welcome bulwark against deflation. If prices are falling because of advancing productivity, as at the end of the 19th century, it is a sign of progress, not economic collapse. Today, though, deflation is more likely to resemble the malign 1930s sort than that earlier benign variety, because demand is weak and households and firms are burdened by debt. In deflation the nominal value of debts remains fixed even as nominal wages, prices and profits fall. Real debt burdens therefore rise, causing borrowers to cut spending to service their debts or to default. That undermines the financial system and deepens the recession. There is a legitimate concern that when the time comes to raise interest rates, the Fed may hold back because of political pressure or fear of fracturing financial markets. The Fed was too slow to raise interest rates after its deflation scare in 2003. Affirming the Fed’s political independence and equipping it with better tools would help the central bank combat inflation when the time comes. It would also lessen the risk that it tightens prematurely just to demonstrate its resolve.

For the entire article from THE ECONOMIST click here:

↑ Back to Top

Real Estate

When General Growth Properties Inc. sought Chapter 11 protection last month, it took a step its biggest debt holders had believed was impossible: It took 166 of its malls into bankruptcy with it. The surprised debt holders had believed the malls would be insulated from the parent's bankruptcy because of the way General Growth had structured the assets. General Growth's action has rattled investors throughout the $700 billion market for securities backed by commercial mortgages, or CMBS. Investors in other deals had also figured their investment was insulated from a parent company's bankruptcy. Now they're worried that General Growth's move will set a precedent that could affect them. "The filing for so many of these well-capitalized, performing malls is an outrage," says Richard Jones, a lawyer at Dechert LLP, which represents some secured creditors in the General Growth bankruptcy case. "The company is doing something that would damage the entire CMBS industry." General Growth's goal in taking the malls with it into Chapter 11 was to improve its bargaining position with lenders down the line. In past years, to get the malls' mortgages, General Growth had set up 166 "special purpose entities" whose sole purpose was to borrow money. SPEs are attractive to lenders because, according to legal experts, they are "bankruptcy remote," meaning their cash flows are dedicated to paying debt service. The lenders issued securities backed by the SPEs. Holders of securities expect the structure would ensure they'd be paid even if the parent company went bust.

For the entire article fromTHE WALLSTREET JOURNAL click here:

↑ Back to Top

Stock Market

The stock market's two-month-old bull run is getting tired, but it still may not be ready to pause. In the coming week, investors will have plenty of data to mull over, but none as pivotal as Friday's better-than-expected April jobs report. Retail sales data Wednesday should provide a good look at how the economy is faring, as will weekly jobless claims and inventory data. Fed Chairman Ben Bernanke speaks at a conference Monday night, and there are just a few earnings, including Wall-Mart and several retailers. Traders are closely watching the behavior of the financial sector, which has been a market leader, doubling since stocks started moving higher in early March. In the past week, the group made double digit gains as the government released results of its stress tests for 19 major institutions. Traders say the reports, which contained few surprises, drew buyers into the group but also forced shorts to cover, driving prices higher. The government's announcement, and subsequent comments from banks on their capital raising plans, also lifted a cloud from the group and made their stocks more "investable." "We're now talking about valuations, not just whether they'll survive," said one trader of the banks.

For the entire article from CNBC click here:

↑ Back to Top

Economic Indicators

The economic downturn is forcing a return to a culture of thrift that many economists say could last well beyond the inevitable recovery. This is not because Americans have suddenly become more financially virtuous or have learned the error of their free-spending ways. Instead, these experts say, Americans may have no choice but to continue pinching pennies. This shift back to thrift may seem to be a healthy change for a consumer class known for spending more than it earns, but there is a downside: American businesses have become so dependent on consumer spending that any pullback sends ripples through the economy. Fearful of job losses and anxious over housing and stock declines, Americans are squirreling away more of their paychecks than they were before the recession. In the last year, the savings rate — the percentage of after-tax income that people do not spend — has risen to above 4 percent, from virtually zero. This happens in nearly every recession, and the effect is usually fleeting. Once the economy recovers, Americans revert to more spending and less saving. This time is expected to be different, because the forces that enabled and even egged on consumers to save less and spend more — easy credit and skyrocketing asset values — could be permanently altered by the financial crisis that spun the economy into recession.

For the entire artcile from THE NEW YORK TIMES click here:

↑ Back to Top

International Corner

In recent months, Japan’s sorry banking history has provided the world with plenty of reasons to worry about America. Now, however, it might offer a crumb of comfort, too. The reason? In part, it lies with those stress tests that Washington has just conducted on its largest 19 banks. During most of the past two years, the American leadership has been in a state of procrastination and denial in relation to its banking woes: first it tried to pretend that the financial woes were not too serious, since they were “contained”. Then it insisted that free market pressures would be enough to force the banks to come clean about their mess – without the need for the government to act. In reality, the Americans were not at all unusual in taking that stance: when Japan’s banks first became plagued with bad loans in the early 1990s, the government in Tokyo took an identical stance – and continued denying the scale of woes for almost a decade. But precisely because the Japanese were such past masters of procrastination – and learnt the hard way what that can do – they have been quietly dubious about much of what Washington has said about the banking woes in the past two years. As long ago as the autumn of 2007, for example, Daisuke Kotegawa, a canny former financial bureaucrat who was central to Japan’s own banking clean up, pointed out to me that what was missing from the American debate was any effort to conduct an audit of Western banks. For Kotegawa is convinced that it was only when the Japanese government finally went into its banks and did a thorough, independent review of their operations – and then published the collective bad loan estimate and forced the banks to plug any capital gaps – that the Tokyo financial dramas started to heal. You can argue at length about whether the stress tests are completely “correct” or not. But what is undisputable is that they have taken place in a fairly thorough manner. In a world that has been marked by cognitive fog, in other words, investors now have something tangible to cling to. At last, there is a sense that someone is in charge – and a bottomless pit might not be so bottomless after all.

For the entire article fromTHE FINANCIAL TIMES click here:

↑ Back to Top

Thought for the Week

From Glenn McCoy

↑ Back to Top

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

Download our FREE Report

"7 Things You Should Know About Trust Deed Investing Through a Mortgage Pool."

Please be sure to add JdeVilliers@LJLFunding.com to your "Safe Sender's" list so that you can continue to receive this information without disruption.

Please click here for instructions on how to do this.