Uh Oh! II

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There is also an interesting debate going on amongst economists that might affect each of us. At this year's American Economics Association meeting the consensus (there were some who strongly disagreed, naturally - economics is hardly a science let alone an exact science) was:

Up until this past summer central bankers seemed to be concerned about inflation. But the financial market collapse, beginning in mid-September and still continuing, changed the outlook. Now the concern is about deflation.

There are some radical effects of deflation. Consumers delay purchases in order to wait for better bargains, and that suppresses consumer demand. Certainly that seems the case now - most businesses have big markdowns on their products. But, a more serious concern, is that it magnifies the burden of household debt - credit card, mortgage, and other debts. And Americans have high indebtedness - both in our governments and in our personal finances.

Japan has been in a deflation cycle for years that has reduced their economic growth rate to a crawl. The majority of economists at the meeting had this as their major concern regarding the 'recovery' of our economy.

This is an ongoing and unfolding concern (inflation or deflation?) and will have a major impact on us all in the near future. Good to keep an eye on the data as they become available.

Here's an interesting quote:

"The WEALTHY hate deflation -- there is little they can MANIPULATE -- however with inflation they just HOLD assets and WAIT it OUT.

The WORKING MAN Hates inflation -- because he has NO assets and HIS salary CANNOT keep up! "

- jackhach
 
I think we all know these are pretty serious times economically, and the road ahead is definitely uncertain. If you dwell on the negative, it can be very scary indeed. There are so many things happening with disturbing and very negative outcomes. Life in America is changing. What's next?

As always, there's a huge amount of statistical data of various types to choose from , so that which is chosen will largely determine to predicted outcomes of the crisis. Half full, or half empty? Optimist or pessimist?

I'm no economist, but more of an interested casual student of politics, history, and a concerned consumer and retiree. But the times are intriguing as well as intimidating. A Black Swan for now. What will it look like in retrospect?

I'm going to take a secure, cautious, wait and see position for myself in all of this, protecting my own economic interests while at the same time curiously waiting to see what happens in this very precipitous period.

A head-in-the-sand approach only invites getting blind-sided, so there's no point in just ignoring it hopes it'll go away or simply solve itself for the better.

I don't mean to provoke controversy with my posts on this thread, nor turn it into a political or economic debate, but I'm simply interested in seeing beyond the dollar signs and where they, alone, are going.

I definitely do appreciate all of your input on is important topic!

Joe. :teeth :thup
 
El and Bill":1s7hnv7k said:
There is also an interesting debate going on amongst economists that might affect each of us. At this year's American Economics Association meeting the consensus (there were some who strongly disagreed, naturally - economics is hardly a science let alone an exact science) was:

Up until this past summer central bankers seemed to be concerned about inflation. But the financial market collapse, beginning in mid-September and still continuing, changed the outlook. Now the concern is about deflation.

There are some radical effects of deflation. Consumers delay purchases in order to wait for better bargains, and that suppresses consumer demand. Certainly that seems the case now - most businesses have big markdowns on their products. But, a more serious concern, is that it magnifies the burden of household debt - credit card, mortgage, and other debts. And Americans have high indebtedness - both in our governments and in our personal finances.

Japan has been in a deflation cycle for years that has reduced their economic growth rate to a crawl. The majority of economists at the meeting had this as their major concern regarding the 'recovery' of our economy.

This is an ongoing and unfolding concern (inflation or deflation?) and will have a major impact on us all in the near future. Good to keep an eye on the data as they become available.

Here's an interesting quote:

"The WEALTHY hate deflation -- there is little they can MANIPULATE -- however with inflation they just HOLD assets and WAIT it OUT.

The WORKING MAN Hates inflation -- because he has NO assets and HIS salary CANNOT keep up! "

- jackhach
Click to expand...

Deflation is in for the foreseeable future as it's impossible for the Fed to make up for $15 trillion of US wealth destroyed in bad loans, real estate and stocks losses. The total bailout only comes to $8.5 trillion, so far, while there are still some $2 trillion of financial institutions losses that are yet to be recognized and the housing market is not even half way to the bottom. In addition, the bailout money is being kept as capital by the banks and not circulated in the economy...

One of the clearest economic forecasting minds is 'Mish' and it's worth following his daily blog entries...

http://globaleconomicanalysis.blogspot. ... ental.html

Denninger is also right on the ball....

http://market-ticker.denninger.net/

iTulip is a good Website to keep in mind, due to the high level of contributions...

http://itulip.com/

...and for those who like videos, it's hard to ignore Peter Schiff and Gerald Celente...

http://www.youtube.com/watch?v=YZJepA_S ... xt_from=PL

http://www.youtube.com/watch?v=kg0oOAiv ... 7B&index=1
 
Like Joe, I'm no economist, am a interested casual student of politics, history and a concerned consumer and hope to join his ranks as a retiree next year. Wished I had his ability to put what he thinks into the written word. All that time in the class room learning and teaching has paid off and due to the vocation he chose has already made a huge contribution to keeping this country headed in the direction that would benefit us all. Have a son who is now in a Masters of Education program that intends to teach High School science and I couldn't be more proud of him.

And yes this working man who is soon to retire would love to have the economy in the deflationary cycle, but as that son I just mentioned chided me that isn't good to the working man and others wanting to start careers and need jobs to do so.

Personally, even if the majority of the economist think the present economy highway is leading more to deflation I think that road is more just a dip before maybe climbing the Pikes Peak road to inflation. The items that Seagem mentioned along with most of the rest of the worlds economy's being even worse then ours has I believe led to this short deflationary cycle, but it now looks like the money printing press is going to opening full bore and not just a reasonable amount of borrowed money put into our instrastructure that could stimulate and slowly bring us back into a cycle that would neither promote inflation or deflation, so I'm preparing for a short deflationary period followed by inflation and I think its anybodies guess how high that will go.

Of course there is so much more involved in this that I don't understand and I believe a lot that say they do only think they do that could turn my views and preparations inside out, (the mess we're in well demonstrates that as a fact) but we can only individually prepare the best we can for what we reason out to be coming.

Jay
 
From the prespective of Byrdman.... I will say this....about ALL...of that...the first two pages of this/that.

I will do my part....by flying up to Buffalo NY(Tuesday, 5Jan09) get in the RV with Terry/LAST DANCE.... and drive to FL.

Nothing like spending a little time together with another C-Brat and talk about our boats and stuff.

And thats the rest of the story....

Byrdman
 
BUSTED.... :mrgreen: :xnaughty :xseek

Well, there were no pics....not much at all about boats... and really, what can I do as an individual to fix all that stuff?....but, live within my means, help others when I can, be Thankful that I am overblessed... and born a FREE AMERICAN.

Busted Byrdman....
 
Sea Wolf":22qc32ne said:
(Slightly modified and abridged)

I'm going to take a secure, cautious, wait and see position for myself in all of this, protecting my own economic interests while at the same time curiously waiting to see what happens in this very precipitous period.

A head-in-the-sand approach only invites getting blind-sided, so there's no point in just ignoring it hopes it'll go away or simply solve itself for the better.

I don't mean to provoke controversy with my posts on this thread, nor turn it into a political or economic debate.

I definitely do appreciate all of your input on is important topic!

Joe. :teeth :thup
Click to expand...

Spot on, Joe. Totally agree. Good to get different viewpoints so as to avoid being "blind-sided", and this can be done (and is being done) by 'just being nice' in our discussions. For those who don't wish to read any of this, simply don't click on the thread (enjoy your time in Florida, Byrdman, and say "hi" to Terry for us [if you even read this] :lol: ). For the rest of us, differing views help keep things in balance (Thanks for the suggestions of other sites to read, Seagem).
 
US boat retail sales fall nearly 30 per cent in November

By Intern'l Boat Industry Magazine (7 January 2009):

Year-over-year boat retail sales were off by nearly 30 per cent in November in leading "bellwether" states, which comprise about 60 per cent of all US sales. Info-Link, which compiles unit retail sales of new boats through registrations in US states, reported that from December 2007-November 2008, unit sales fell by 28.2 per cent compared to the same period a year earlier.

In specific categories, unit sales of sterndrive/jetboat sales were down by about 39 per cent for the 12-month period compared to the same period a year earlier, while sales of personal watercraft were off by about 28 per cent.

Sales of outboard-powered boats over 15 feet LOA fell by 24 per cent from December 2007-November 2008 compared to the same period a year ago. Sales of sportfishing boats fell by nearly 40 per cent in the rolling 12-month comparison.
Click to expand...

Certainly sounds like a buyers market, now. Those interested in new or used boats should be in a good position to negotiate a good price.

Tough time for boat manufacturers and dealers :( and, for that matter, for many of us. Is the glass half full or half empty? The number one question for managing our personal finances.
 
Folks - Some random thoughts to add to the weighty discussion unfolding.

My father came to America in 1914 from Greece speaking no English as a twenty year old. After what was consider equivalent to a high school education in those days, and after being expelled from a Greek monastary for reading Plato, he shoveled coal on the Athens /Buenos Aries steamship run for several years before he earned enough passage to come to our promised land.

Working as a migrant laborer, gandy dancer, waiter and dish washer in Greek restaurants, he managed to learn enough English to graduate from night high school at age 25. Attending three different universities over the next eleven years he graduated from the U. of Wisconsin in 1931 with a degree in ancient history. My mother and he married that same year and by 1935, the year I was born, the family now had four children. With no jobs available and living on the welfare of the day, my parents divorced, my mother returning to live with her parents minus two children, my twin sister & I who were parked in an orphanage in Milwaukee for several years.

When World War II came along, my father managed to work for the government teaching Americanism to Greek refugees. He was not an example of the great American immigrant success story from a financial standpoint. But he did contribute to the American way of life. He returned to Greece in 1960 where he died in 1964. I only saw him four times in my life, the last time as a 21 year old former Marine now attending college. I mention this short biography because in our last conversation in 1956, he described what it was like to be a stranger in a new land. He was not bitter at all but considered himself privileged to be an American. The only right he could remember after arriving was the right to try and find a job.

Fast forward to the immigrant of today, legal or illegal. Food stamps, rental assistance, medical care, free education, and a galaxy of lawyers waiting to sue some hapless employer who denies the immigrant his rights.

I'm hardly opposed to to legal immigration How could I be. But when we discuss the economic pressures facing our society today, how about analyzing our prison population and the costs per inmate.

The facts show that 20% of our prison population is comprised of illegal immigrants. Here in Montana each inmate cost is annually $40,000. Now the average Montana family income is less than $40,000 per year.
We have national standards for our prisons but not for our public schools.
That we are willing to spend more on our criminals than what our familys earn suggest not the quality of our justice but the quality of our insanity.

I recall studying under an economics professor who held the opinion that human psychology was intertwined in our monetary system to the point that value was both tangible and intangible. He wasn't too worried about inflation, etc., as long as there was enough food to eat. He by the way was a Keynesian adherent. His favorite economic joke was this; if you laid all the economists end to end, they wouldn't reach a conclusion.

America is extraordinarily blessed when compared to most nations. Our wealth of natural resources, production ability, transportation systems and distribution systems are really solid. Aren't we as a nation somewhat disingenuous if we believe our ability to consume is infinite? That ever expanding consumption is the index of economic health?

I recently came across and interesting article written by one Dr. Walter Clay Loudermilk a soil scientists who wrote in the 1930s about how ancient civilizations came to grief because of their misuse of their lands.It is titled "Conquest of the land through 7,000 years." and is available free at your local NRCS (Natural Resources Conservation Service) office.
It is a sobering treatise to read.

Speaking of our Congress, why would the American people expect the same fools who led us into this economic mess help extract us from it? That suggests to me a form of triumph of hope over experience. One thing I believe I have learned over the years is that all forms of human organizations: democracies, republics, communist, fascist, dictatorships, socialistic, theocracies, et al. suffer from the same major problem. That is simply this: how do the people maintain control over their leaders?

We the sheeple have really no one to blame but ourselves. How about a 10 million man march to Washington, D.C.?

Send not for whom the bell tolls.....

John
 
Yes, Seagem has it right when he states that "deflation" will be the immediate course for the next several quarters. And when coupled with the HUGE impending influx of dollars (the presses are rolling) and a natural reduction of production there will soon be LOTS of US dollars competing for not enough products hence "HYPER INFLATION"! Study the history of the Weimar Republic...we're following the same path!

Yesterday our President Elect stated publicly that "only Government" has the ability to stop and turn around our national economy that has become a "run-away train". That is only true if "Government" owns the tools and means of production. As it stands in our country right now individual citizens and privately owned businesses own these tools...but I fear not for long! Oh you wicked business owners...why won't you spend $50,000 to hire a new employee so that you can earn the $3,000 tax credit? AARGH!!! WE CANNOT SPEND OUR WAY OUT OF THIS, NOR CAN WE SAVE OUR WAY OUT...WE MUST PRODUCE OUR WAY OUT!!!

But alas...I digress! As in the subject of my post I would like to remind all of my fellow "Brats" that we have conveniently forgotten a law that Pres. Richard Nixon signed way back in 1976 named the ARISA act of 1976. This is the law that created "Defined Contribution" retirement programs and made "Defined Benefit" retirements obsolete effectively letting big business and Unions off the hook for the long-term well being of their "Womb-to-tomb" empolyees.

401K's and Keough's are fine as long as (gasp) the market continues to go up! BUT, for the market to continue to go up there is a requirement that there is more demand than supply! The caveat is that at the age of 70 contributors to these plans are REQUIRED BY LAW to start taking their maditory dispersments from these plans. This reqires that holdings in their Mutual Funds be sold! Now consider how many of you "Boomers" out there turn 70 sometime between 2012 and 2016! The market will be flooded with product but there will be no purchasers that are willing let alone able to purchase!!! We have been HOODWINKED!!! Taught to leave our investment strategies in the hands of "Professional Investors" that make money on every transaction whether they earn money on these transactions or not! Lulled to sleep with the words of the lullabye, "Take the long view"! When these things happen in the market, and happen they MUST it will become appearent that it is a Ponzi Scheme to make Bernard Madoff seem like a rank amature.

I'm not the only one to tweak to this. Robert Kyosaki wrote an entire book about it called RICH DADS PROPHESY, a must read for anybody that is concerned with their retirement planning.

As for me, I'm still young enough to find a place (preferrably in Idaho or Montana) where I can plant seeds, raise a few cows, pigs and chickens and rest assured in the knowlege that when I pull the trigger something dies whether game or foe.

"Uh Oh" doesn't even come close! Ring the bells and make yourselves ready...a storm is coming!
 
We want to share a reference we found today (from a reference to Oprah's website) that we believe contains good advice during these difficult financial times. This is a 'free' online book by Suze Orman. She is offering it free so we don't feel she's been 'bought' by any company or financial interest. Much may not pertain to your financial situation, but much probably does. She provides a good background for the crisis and lots of good information for home owners, folks with kids going off to college in the next few years, investment advice - in short, a good set of recommendations for us in a time of Black Swan crisis for each of us.

As she says, "think hopefully but plan for the worst." Dave said those of us who own C-Dorys have a "full" glass. We sure agree, our boat gives a wonderful escape from grim news, hard times, and tough decisions - but, as prudent skippers, we know that we can enjoy the moment, look ahead with optimism and hope - but we know we must also look ahead, as best we can, to anticipate any rough waters in an attempt to smooth our future passage.

Here's the reference, you can read online:

http://media.oprah.com/sterm/action_plan_english.pdf
 
Interesting viewpoints, John and SGIRhino.

Not that I agree with them totally though. In graduate school back in the ‘70’s we used a computer model of our economy and were occasionally tasked with mitigating recessions and, less often, inflationary periods using most of the tools that are still used today. The point was that no matter what we did, our efforts never made more than a 3-5% difference in the result. The market is like a 600 lb. gorilla in Walmart and it’s gonna go where it wants to go. I don’t for a minute believe our present or the soon to be government will make a lick of difference, especially if history is any indicator. If they can screw it up they will but it only delays the inevitable.

Speaking of history, it’s really a well documented fact that by the time our government admits we’re in a recession it’s usually on or near the cusp of recovery. The only real change from the past is that the Real Estate bubble burst and the fallout from that will affect State and local governments for a long time. They run off of property taxes and sales taxes, and us SoCal guys are looking forward(?) to IOU’s from Arnold if we are eligible for income tax refunds. Personally I’m thinking of sending an IOU along with my CA return if I end up owing CA taxes!!!!

We have to realize that with population growth comes wider swings in the economy. We simply can’t become isolationists in this new world economy either and most investors are focused on mutual funds rather than individual stocks. Most mutual funds have tanked and rightly so. Their managers forgot about diversity, chased profits and profits were in financials, ergo they tanked when the financial institutions tanked.

No, I’m not afraid to invest – even now. Especially not now. I received an Annual Report from one of my fave investments. The company is diversified but mainly sticks to power , power control systems, huge pumps, and stuff everybody uses. Their stock price has dropped 30% yet their profits for 2008 were 12%. Consistent with all but one of the previous 60 years! Bargain basement prices AFAIC. Another retailer caters to do-it-yourselfers Since October when I jumped on the bandwagon it’s gained 13%. Not bad. Especially if you listen to the doom and gloomers.

Do your homework, trust your instincts, and invest in companies you’re personally familiar with. The companies that are failing? It didn’t take a rocket scientist to figure out Circuit City or Linens & Things were gonna crash. Just visit often and see how it’s run.

As for unemployment? Here in CA, they’re mostly new construction workers and retailers. No surprise – the housing boom has, to a large extent, fed on itself for decades. Construction workers move to CA because there are jobs and they gotta have places to live….

Nope, I have faith in the overall economy but do not believe we can spend our way out of this one and I will NOT simply “hope” for the best. A wise person once told me that hope is but a subtle illusion and I believe her. Eventually when everyone gets complacent again it’ll hit us one more time but like what Bill sez to do, I'm hunkered down and ready to weather the current storm. On the other hand, I've got a scope mounted on my stock finder and ain't afraid to snipe the truly great bargains out there. I'll leave the next recession/depression/stagflation/inflation period for the grandkids to worry about

Don
 
El & Bill's recommended reading of Suzie Ormand's ideas on financially surviving in 2009 is excellent. Quick read and full of useful dos & don'ts.

In Forbe's January issue, the king of bonds, Bill Gross, is quoted by columnist, Bernard Condon, "...Washington will be propping up companies for years to come. His advice: Buy what Uncle Sam buys." Follow the money trail, I guess. Kind of common sense for investors.

On a less serious note, investing in the manufacturing of jumbo M&Ms
might be good, too. (meant only for one C-Dory reader)

Four months ago, I finished reading Alan Greenspan's "Age of Turbulence." Then I thought he was the Messiah. I'm not so sure now.
Maybe something like Bill's black swan.

Response to Bill's original post, i.e., impact on the boating industry? Reiterating the quote of Bill of Suzie Ormand, plus thinking that the current owners of C-Dorys may find our niche boats truly affordable, more fun on the water and less expensive to operate. Our current manufacturer may have to trim back the number of models offered.
Right now gas here in Montana is $1.43 for regular, $2.15 for diesel. I believe our C-Dorys will maintain their value.

Ran into a young family man in Helena this summer with a 22' 1987 cruiser. It was still in good shape. He paid $20,000 for it and was happy as a clam. John
 
El and Bill":ecjmm9qy said:
US boat retail sales fall nearly 30 per cent in November

By Intern'l Boat Industry Magazine (7 January 2009):

Year-over-year boat retail sales were off by nearly 30 per cent in November in leading "bellwether" states, which comprise about 60 per cent of all US sales. Info-Link, which compiles unit retail sales of new boats through registrations in US states, reported that from December 2007-November 2008, unit sales fell by 28.2 per cent compared to the same period a year earlier.

In specific categories, unit sales of sterndrive/jetboat sales were down by about 39 per cent for the 12-month period compared to the same period a year earlier, while sales of personal watercraft were off by about 28 per cent.

Sales of outboard-powered boats over 15 feet LOA fell by 24 per cent from December 2007-November 2008 compared to the same period a year ago. Sales of sportfishing boats fell by nearly 40 per cent in the rolling 12-month comparison.
Click to expand...

Certainly sounds like a buyers market, now. Those interested in new or used boats should be in a good position to negotiate a good price.

Tough time for boat manufacturers and dealers :( and, for that matter, for many of us. Is the glass half full or half empty? The number one question for managing our personal finances.
Click to expand...

Do you have a link for this article?...

I have been researching published figures on the boat industry trend, which I expect to soon match the 60% drop in RV's sales, as I trade stocks, futures and options for a living and was recently shorting stocks, such as Brunswick (BC) and Winnebago (WGO)...

There is no question that all discretionary purchases are going to get hit very hard and that many boat builders and marine products manufacturers will have gone belly up by the end of 2009. Companies, like Brunswick (Mercury, Bayliners) and Bombardier (Etec engines) will have a hard time staying afloat, while Honda and Yamaha will most likely make it through: bear that in mind when selecting an engine...
 
Seagem:

Here is the reference to the International Boat Industry article that I quoted in my previous post:

http://www.ibinews.com/ibinews/newsdesk ... inews.html

You might also want to review data (if you haven't previously found this site) from the following source (you might need to 'register' to view the data):

http://www.boating-industry.com/reports ... md=current

It is interesting to view the earlier data (2005 on) and compare with the 2008 data (just released). The boating-industry article calls the current situation "the perfect storm."
 
El and Bill":md0ct82p said:
Seagem:

Here is the reference to the International Boat Industry article that I quoted in my previous post:

http://www.ibinews.com/ibinews/newsdesk ... inews.html

You might also want to review data (if you haven't previously found this site) from the following source (you might need to 'register' to view the data):

http://www.boating-industry.com/reports ... md=current

It is interesting to view the earlier data (2005 on) and compare with the 2008 data (just released). The boating-industry article calls the current situation "the perfect storm."
Click to expand...

New hybrid cruising C-Dory with full Size Flybridge, specifically designed to a price point where even rednecks can afford it during a Depression...

orig.jpg
 
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