The LJL Secured High Yield Income

The LJL Secured High Yield Income Fund I, LLC

annualized return to investors as of 6/30/2009 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

Expect a Dull Recovery if Jobs Picture Fails to Brighten

Disappointing jobs data and the beginning of corporate earnings season send investors to bonds, pushing yields lower.

Home prices fall, but the trend is easing

Bulls Get Summertime Blues, But It's Hot Fun for Bears

On Wall Street: Credit crisis is far from over

The dollar’s role as the world’s main reserve currency is being challenged

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President's Summary

As we enjoy the summer and experience the common summer doldrums in the market, the realization that we may well be past the worst of this economic crisis, but that the bounce back may not be as robust as hoped for, is now becoming a reality to most investors. The chances of a quick retake of the hill of lost value is diminishing daily as the economic realities of the stimulus plan, unemployment and a myriad of required structural changes to our economy surfaces. As we have discussed in previous weeks we may very well be in a protracted sideways economic period that ostensibly started with the collapse of the dot com bubble in 2001. Previous economic sideway moves have lasted 15 to 20 years before a new economic theme provided an impetus for an expanding economy. At this stage it is difficult to see the new economic theme emerging although the BRIC nations would like us to believe that it would be based upon the growth in their economies. At this stage probably unlikely because of the instability in their political, financial and social systems that would undermine any sustained global economic leadership. If they are correct however, investors could be challenged in finding lucrative investment opportunities in those countries. Our own economic engine will be fueled when investors face the reality that “super make up returns” are not forthcoming on a consistent basis and that we are indeed past the worst stage in the recession, and investors quit accepting negative inflation adjusted returns from the US Government and invest using fundamentally sound investment principles.

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Investor News

The risk of another Great Depression has diminished, and the end of the U.S. recession that began in December 2007 may be only a couple of months away, if forecasters are right. But hold off on the champagne. All signs point to a recovery so painful that many Americans may not realize when it finally arrives. First, the good news. Auto sales and housing starts have fallen so low that they are unlikely to fall further, hence the talk of "stabilization" in those big, beleaguered industries. The mountain of unsold goods in factories, warehouses and stores, though still large, is shrinking. That eventually will lead manufacturers to stop reducing production and laying off workers. U.S. exports perked up in May. Credit markets are beginning to heal. Big companies are selling bonds. Even banks are selling new shares of stock. But the job market remains awful. In December 2008, forecasters surveyed by The Wall Street Journal predicted the jobless rate would hit what then seemed a very high 8.1% at the end of 2009. Surveyed again this past week, forecasters now anticipate year-end unemployment of 10%. That suggests 775,000 more Americans will join the ranks of the jobless in the next six months. Because most Americans depend on their paychecks for their shopping, a weak job market and lousy wage growth have cast an ominous shadow over consumer spending and the overall economy. For now, government is driving the economy with tax cuts and spending increases, low interest rates and aggressive Fed purchases of long-term securities. But the Fed appears reluctant to do more. It has cut interest rates to zero. It has purchased so many mortgage-backed securities that it fears that buying more would destroy whatever market for them remains. And it's reluctant to go beyond its announced $300-billion purchases of long-term Treasury securities for fear of unsettling markets and complicating the eventual exit from this extraordinary policy. That leaves fiscal stimulus. The economic case for more is that the economy looks even weaker than it did when President Barack Obama signed the $787-billion package of tax cuts and spending increases in February. The economic case against is, one, the bulk of the fiscal-stimulus spending hasn't hit yet and what's coming could jolt the economy back to life and, two, the government's debt load is getting awfully big.

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

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Interest Rates

Home mortgage rates fell for the third time in four weeks, with the 30-year fixed slipping to 5.59% from 5.7% the prior week, according to a report released Thursday. The average 15-year mortgage rate also fell, dropping to 4.93% from 5.07%, according to the weekly national survey from Bankrate.com. As a result of those factors investors have flocked to the safety of government and mortgage-backed bonds, the report added, sending mortgage rates back down to levels last seen on Memorial Day. Mortgage rates are closely related to yields on long-term government debt. A report released last week said home prices fell 18.1% from a year earlier, but the change from March narrowed sharply in a possible sign that housing markets may be starting to turn. Current rates remain much lower than last year's levels, when the average 30-year fixed mortgage rate was 6.48%, according to Bankrate.com.

For the entire article from CNNMoney click here:

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Real Estate

There is a clear trend home prices declines are moderating — another sign the beleaguered housing market is stabilizing. While the Standard & Poor’s/Case-Shiller index of 20 major cities tumbled by 18.1 percent in April from the year before, it marked the third straight month the decline was not a record. And yearly losses in 13 metros improved compared to March. But rising foreclosures fueled by layoffs could derail a meaningful turnaround. The number of homeowners at least two months behind or in foreclosure jumped in the first quarter from the previous quarter, a Treasury Department report said. Eight of the 20 metros posted price gains from March, with Dallas recording the largest increase at 1.7 percent, the index showed. And every city except Charlotte showed some kind of improvement month-over-month. The 20-city index is off almost 33 percent from its peak in the second quarter of 2006, which means home values are now around 2003-levels.

For the entire article from MSNBC click here:

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Stock Market

Stock market bulls have been mostly lazy and hazy this summer, but the bears have been having a picnic. There has been no direct correlation between high-volume days and moves lower in the market, but traders say they're seeing a momentum shift that features more conviction from sellers than buyers. Stocks are down about 5 percent since the official start of summer, even though the ratio between down days and up days is about even. The difference is that the decreases have been sharper while the gains have been mostly muted. Weakness in the economy, as evidenced primarily through a dour employment outlook, has many on Wall Street convinced that the market is headed lower following its 40 percent rally from mid-March to mid-June. Talk of improvement in the economy, market experts say, has abated now that investors are looking for tangible signs of real recovery rather than just beating weak expectations.

For the entire article from CNBC click here:

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Economic Indicators

Looking for a souvenir of the credit crisis? The Museum of American Finance, located on Wall Street, sells a set of five posters from its credit crisis exhibit. “Depicts key events from February 2007 through early March 2009 and also features an overview of the crisis, important terms and explanations of key moments.” At just $12, it is an affordable gift, too. The problem with such posters is that they suggest the crisis is over. But it is not, a fact that is starting to dawn on many investors. Until recently the market tone was being set by talk of “green shoots” and economic recovery. Now, there is more talk of weeds – or even manure when the state of the US economy is described. So, what could make things worse? Well, they are the same culprits that caused the problems in the first place: continued falls in house prices and the rapidly accelerating drop in commercial real estate values. Another crucial element is unemployment. The hundreds of billions of dollars of losses notched up in the banking system due to the property price collapses have come before households start to really feel the effects of job losses. As problems like these continue, so do the requests for more government backing and money. In the case of commercial real estate, the inability to get new commercial mortgages could make losses even bigger. For example, properties whose owners default cannot be sold on to new investors if they cannot get financing.

For the entire article fromTHE FINANCIAL TIMES click here:

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International Corner

In the build-up to the annual summit of G8 countries, which began on July 8th in the Italian city of L’Aquila, officials in China, Russia and India all called for an end to the dollar’s dominance in the international monetary system. Dmitry Medvedev, Russia’s president, declared on July 5th that the dollar system is “flawed”; his central bank has been reducing its dollar holdings. The People’s Bank of China (PBOC), China’s central bank, repeated its call for a new global reserve currency in June and is now taking the first steps towards turning the yuan into a global currency. So China has particular cause to worry that America’s massive printing of money in response to the financial crisis will undermine the value of its dollar reserves. There is much domestic anger about the potential losses China may face as a result of its lending to rich Americans. The government would like to diversify out of dollars: its new purchases of Treasury securities have fallen sharply this year. But any attempt to dump its stock of dollars would risk triggering a plunge in the currency. Instead, officials are mulling two ways out of the “dollar trap”: persuading the world to adopt a new global currency and encouraging the international use of the yuan. Even if China immediately scrapped capital controls the yuan would be unlikely to challenge the dollar as a reserve currency for years. The dollar did not replace sterling until half a century after America’s economy had overtaken Britain’s. America’s GDP is around three times as big as China’s, and its total trade is still larger. Both the SDR plan and measures to internationalise the yuan also seem to assume that China’s problem is simply that too many of its reserves are in dollars. But China’s real problem is that it is running a persistent current-account surplus; in order to keep the yuan closely tied to the dollar it has to keep buying more dollar assets. If China really wants to reduce its exposure to the greenback it must allow the yuan to rise. It would incur a loss on its existing reserves but stem future losses. But so long as China maintains its current exchange-rate policy, it is, ironically, helping keep the dollar dominant.

For the entire article from the ECONOMIST click here:

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Thought for the Week

FROM DESPAIR INC

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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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