Uh Oh III

E

El and Bill

New member
In January, 2008, we began a discussion of the state of the economy and the possibility of a recession. The thrust of the discussion was to stay non-political and examine the affect such a downturn might have on our boating lives. We had an interesting discussion and one helpful for us, and perhaps other Brats. We took protective steps (for us, financially) and perhaps others did as well.

http://www.c-brats.com/viewtopic.php?t=7851&postdays=

In January, 2009, we initiated several other discussions about the state of the economy, when we were in the economic meltdown, and one not seen since the 1930’s. One of the discussions had to be shut down due to political opinions posted by a non-C-Dory person. But, the second discussion was interesting and stayed focused on how the financial change had altered our boating and personal financial decisions.

http://www.c-brats.com/viewtopic.php?t=11364&start=0

Since we enjoyed and learned from those previous discussions in the pub, we thought it might be interesting to initiate another – almost two years from the first, that was warning of possible trouble, a year after the next posts discussing our choices and decisions after our economy (global, national, and perhaps personal) became immersed in the difficult times. The following is our ‘take’ on the present state of things (again – trying to avoid any judgment or political innuendo) – just the ‘facts’ and then our personal reaction to those facts, as it regards our boating decisions.

It seems most economists now see us returning to ‘normal,’ but those same individuals call it a “new normal.” Let’s go back and look at the ‘old’ normal, at least as El and I remember it (and we have been investors and had economics as an interest since the Paleozoic).

Back in the ‘50‘s and ‘60’s the US had balanced budgets, modest trade surpluses, and about 5% a year growth. Americans saved more than 8% of their incomes.

In the 21st century, Americans saved 2.7%. Many feel this was the result of the increase in average wealth due to a huge rise in the price of a house, and the ease of borrowing. Collective net worth rose from $42.1 trillion in 2001 to $63.9 trillion in 2007. “Why save if house values are rising fast and you can easily borrow against the new appraised value?” But it all came to an abrupt end. Pop – the bubble burst. By the end of the first quarter 2009, 27% of American mortgage holders owed more on their houses than they were now worth, and foreclosures continue.

Net worth plunged to $51.1 trillion in the first quarter this year as housing and investment values plunged. Result? A ‘behavioral convulsion.’ Family spending has been radically cut and savings has risen to an average of 5% in the second quarter of 2009. Since spending cuts and savings increases reduce consumer demand, such an abrupt change has cut annual spending by about $109 billion.

Some reputable economists are now predicting a savings rate in excess of 10% as folks unwind longer-term spending commitments.

What happened in the 1980’s to allow house prices to inflate so far? One factor was new laws that allowed easier refinancing of mortgages and easier credit for borrowing. One didn't have to save to acquire 'things' - credit was easy to get. A borrowing ‘shock’ hit the economy so that by 2007 household debt peaked at 138% of disposable income. Household net worth collapsed from 639% of disposable income in 2006 to today’s 487% of disposable income.

The tug-of-war between fear and greed is frightening to witness. Greed was in charge up until a few years ago – credit was easy and folks consumed madly with easy money to pay. Now fear has taken over – loss of investments, house value or a foreclosure, perhaps a job loss has caused deep anxiety and a feeling of creating a hedge against misfortune. Retirement is threatened or postponed.

So folks are saving and the result on the consumer-driven economy has been serious. We asked, almost two years ago, what the effect of a recession might be on us as boaters. Matt Gurnsey has posted an excellent summary of that effect on the industry (and thus on all of us) - and it has been profound.

http://www.c-brats.com/viewtopic.php?t=12741&highlight=

And the tale continues to unfold for each of us, as individuals, and all of us as boating enthusiasts. Most economists believe we will be living with this 'new normal' for many years to come. Comments? (non-political, please).
 
This morning I sent the following to the bankers who belong to the Nevada Bankers Association. HR 4173 is Barney Frank's fix for financial services -- it is a BAD bill! Not trying to make this political -- that's a bi-partisan assessment.

So here is the message I sent:

Subject: H.R. 4173 -- Stress Relief

During these troubled times my fellow state execs have resorted to writing Fairy Tales and Dragon’s Tales to relieve some of the stress of fighting Congress and the Administration while also having to deal with the Independent Community Bankers Association. As they are somewhat humorous I thought they were worth sharing.

Bill Uffelman

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Part of what bankers pay me for is to know when to keep my mouth shut. That's been the most challenging part of my job lately. I've taken to writing fairy tales to relieve stress. This one may sound familiar . . . and remind you that some fairy tales are too frightening for children.

A FAIRY TALE FROM THE DARK SIDE

Once upon a time, in a magical realm called Congressland, there lived two wizards named Bear Nanky, and Henry Phootball Fallsen. A terrible blight was coming upon the land, and Nanky and Fallsen were the Blight Fighters in Chief. They met to plan their strategery in secret, for their magic could not withstand the rude scrutiny of those who had not attained their level of wizardry.

The blight problem was not their fault, of course. Their world was magical in that way. Mistakes were made and bad things resulted, but no one was ever at fault in the magical realm called Congressland. For theirs was a world of magical thinking, of believing that wishing things so could make them so.

Such magical thinking was also strong in the gleaming towers of Academia, where the natural world of cause and effect was rarely permitted to intrude. There, a new kind of being had been forged, the academagician – and Bear Nanky was the greatest academagician in all the land.

In Congressland, the most magical of thinkers had long wished that all people owned a house - or two, whether or not they could pay for it. But, houses are things of the natural world, and the Magicians of Congressland needed many in the natural world to embrace the magic. So they had conjured up FatFannie and FatFreddie - who looked very real – to drape the powerful Cloak of Safety and Soundness around the magic. And so, new kinds of mortgages entered the natural world, seeming so safe and sound that those who guarded the Wall around the heart of natural world’s treasury opened wide its gates and invited the mortgages in. Soon, the unfettered ones of the natural world, those who knew not the Regulators of Safety and Soundness, were invited to share in the mortgage magic so that they could spread its insidious illusion into every corner of the world.

But, the magicians of Congressland had not known, or perhaps had forgotten after so many years in a magical land, that a few laws of economics still controlled the natural world. These laws were proclaimed by a small brotherhood called Fasbees, who spoke accounting truth that resounded even in the magical realm of Congressland. They had peaked beneath the magic Cloak, and they knew that the magic could not long survive in the natural world. They resisted the magic with Mark to Market Accounting, hastening the Day of Reckoning between the forces of magic and nature.

As that Day approached and the magic Cloak began to wear thin in places, those who had believed began to see that their coffers were filled with illusion, and the foundations of the Wall developed yawning cracks. Many were falling into the growing chasm. Those who stood at the edge could not even say if they were looking into a crater or a canyon. But all could see the Blight that was spreading from within the depths, infecting the brains of the people - especially the regions which control shopping and hiring.

And so, Bear Nanky, the greatest academagician of them all, and Phootball Fallsen, the seasoned warrior of the gridiron who knew well the Wall, were charged with fighting the Blight. Their secret meeting went something like this - which we know because there was a fly on the wall, a talking fly. (That describes most flies in their city, which by its very nature draws a lot of flies.)

“You’re the academagician, Bear Nanky. What do we do?” asked Phootball Fallsen.

“Well, Phootball, this isn’t the first time we’ve had such cracks in our Wall, and I drew this assignment because I know all about the Grand Chasm that opened up a few decades back. History shows, for I wrote a chunk of it,” Bear Nanky intoned, “that such manifestations of karstic activity in the marketplace requires an immediate, massive infusion of filthy lucre, which is to say, cash. We must replace the “illusion in the coffers” of the magic-friendly Big Banks with real cash, so that they can shovel the cash into the cracks.”

“Well, I remember back when I played football at Knowmorethan U,” responded Fallsen, warming to his favorite theme. “The really big guys were slow and clumsy and always getting tangled up on the field. I say we have to make some of the big slow guys take out some of the other big slow guys that can’t play anymore, and then we invent a huge fund of cash to help them pay for it. We can call it TACCY (Troubled Assets Created by Congress Y’all). Now, the little guys I played with were quick and agile. You loved to watch ‘em change direction and get out of trouble in a blink. Likewise, those little banks will be fast and nimble enough to skirt the crack altogether, unless someone pushes them in.”

“Well, I saw a football game once," answered Bear Nanky, "and I can follow that. Except, what happens when people find out only the bad banks got the cash? You could inadvertently create the suggestion of fault - and that’s a no-no in no-fault Congressland. We'd better make a lot of banks take the cash and make it look like everyone needs help. We’ll even create a stigma around not taking the cash, something like...oh, I don’t know...suggest they're not good enough to get the cash. And let us not forget who we are – we can even threaten future sanctions."

“Hmm . . . sounds like you might have had a real job at some point in your career, Bear Nanky!” mused Phootball Fallsen.

“No, and if we pull this off, I may never need to look for one. But, back to your quick and agile little guys, your idea about leaving them alone is shortsighted. Think: we've got a perfect partner in she who heads the Effdeeisee, Chm. Bearhousing. Her coffers have already been tapped by EnDeeMac and other highly magical banks. Yet, based on her audition of recent months to keep her job in the next administration, it sounds like she wants to shut down all the banks and replace them with real estate brokerages so she can make sure everyone has a home at below market prices. She’s even talking about penalizing banks for using the EffAchEllBee and CeeDARS!”

“Doesn’t she know that's how we got here?” sputtered Phootball Fallsen. “ Here we are trying to get cash into banks, and she's sucking it out faster than we can get it in! Well, until we can conjure up a hand to write the Effdeeisee mission statement* on her office wall, we'll have to let her do her thing.”

“Exactly, Phootball !” said Bear Nanky with a professorial nod. “Let her go her merry way. The tougher she makes life on banks, the more they will need our TACCY funds to pay their soaring Effdeeisee premiums. That's all the cover we need for those big banks that did bad things. To put it in terms you can understand, Phootball, it will be like one of those big, fat, slow guys not making a block and that little agile guy getting whacked in the backfield. The average fan doesn’t know who to blame, so they boo at all of them! I am beginning to appreciate some of the life lessons learned on the field of sport.”

“So," continued Bear Nanky with growing confidence, "we preserve the no-fault principle of Congressland by shutting down the brokerage houses that sold this magic and by giving lots of money to the big banks that bought the magic. We cover up the really big banks' lousy management by forcing the rescue cash on plenty of others. We fix the Effdeeisee’s cash problem by letting Chm. Bearhousing charge even the strongest best capitalized banks double premiums – we’re talking about someone who doesn’t know the meaning of the word ‘forbearance’ – and chances are, she'll get at least four more years to wreak havoc on the banking system. It's a stretch, but given the public's attention span, we can pull this off!”

Phootball Fallsen was at last impressed, “Don't know much about history, Bear Nanky, but I think we're going to look brilliant.”

Bear Nanke slanted him a wryly amused glance, “Perhaps I didn't mention the last part of the plan, Phootball Fallsen. You'll be the face in front the cameras selling all this. That way, when the TACCY ends up in the “crappy” and the economy gets “flushed”, they will remember you, not me. I can always go back to academia and write a book telling everyone that you and Congress didn’t give away enough money. I take all the money I make from my best seller and put it in a bank CD, which with the rampant inflation that is sure to follow, should be paying around 20% APR. History will say that I looked brilliant - for I intend to write it.”

Phootball Fallsen left the meeting wondering how he could become an academagician, too. And the talking fly on the wall went on to live happily ever after for the rest of his 30 day lifespan, during which he became an unnamed source for the last investigative reporter in Washington, D.C. who is currently in a secure, undisclosed location.

THE END


Don't worry too much, this is just a fairy tale.....I think!

*“The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress that maintains the stability and public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions, and managing receiverships.” An extended search failed to turn up any references to FDIC responsibility for consumer housing.









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A Dragon’s Tale
The Legend of Cifpa

Once upon a time in a land not too far away, a new king came to power. He was angry with his subjects because they did not behave as he desired.

So, the King decided to travel to another land and find a dragon to devour some of the people and force the rest to behave appropriately. He found a particularly nasty dragon with big teeth and fiery breath, named Cifpa.

When he arrived home with the dragon, he presented him to the people. Immediately, the people were frightened of the dragon because of his big teeth and fiery breath, and they began to fight against him.

The King turned the dragon over to the Prince for handling.

Now the Prince was crafty and decided to try to make the dragon more appealing, so he put some lipstick on the dragon. But the people still fought against him.

Next, the Prince had a particularly crafty idea and decided to ask the people how he could make Cifpa more appealing and less frightening. Some suggested jewelry, and some suggested fine clothes and shoes. Finally, the leader of a particular group of cities suggested to the Prince that he teach the dragon to dance. The King and the Prince were not afraid of these suggestions because they knew that the dragon with big teeth and fiery breath was still underneath all the fancy clothes and dance lessons.

The Prince dressed up the dragon and, yes, taught him to dance and once again brought him before the people. The leader that made the dancing suggestion loved the dancing so much that he decided to overlook the big teeth and fiery breath and welcome the dragon into his cities. But the rest of the people still mostly saw the dragon’s big teeth and fiery breath and continued to fight.

So, the Prince took Cifpa to the certain leader’s cities and brought him out to dance and the people loved the dancing at first, but soon the dragons teeth began to show and his breath started coming in fiery bursts and he destroyed many of the people and subdued the rest. And even though the dragon still danced, not very many people still loved the dancing. And since the country had been divided, the rest of the country could not defeat the dragon and submitted to the King’s will and behaved appropriately and some, especially the small and the weak, were devoured by Cifpa.

The moral of this story, if there is one, is to beware of dancing dragons!!!!
 
Endless wars paid for by credit cards, trade policies favoring outsourcing, a disappearing manufacturing base, Wall Street bailouts, 10%+ unemployment...to discuss this subject without involving politics, that's a tough one. But, I wish you luck.
 
With a small home equaling low taxes and insurance and all paid for, along with our other possessions we are still planning on retirement this coming spring. Our retirement income will not be much, but with a lifestyle that doesn't require much other then traveling and boating we don't need much.

Have little doubt that high inflation is just around the corner and with the dollar value dropping and fuel for cruising and land travel bound to eventually increase to a point that it restricts what we most enjoy doing. The plan is to travel to the far places first then gradually restrict our range as the cost increase until Yellowstone and the magic mountains around this little town in Wyoming where we live still lets us enjoy life to its max.

One thing that may somewhat interfere with the plan is the Forest Service proposal to reduce the Senior discount from 50% to 10% which I believe will spread to the Golden Age Passport and have a major effect on our planned future camping in Yellowstone Park. The government is going to be forced to eventually cut cost and I think the baby boomers are going to take a big hit compared to the advantages the seniors have enjoyed the past decade or so.

As Marty stated, think it will be tough to keep the politics out, but should make a very good thread if its kept to us C-Brats sharing their plans on dealing with this "new normal" era that's upon us.

Jay
 
I cant assist b/c politcs and government are part of equation.
I know I dont approve the bailout for GM, stock brokers, AIG, etc

I dont see the debt load decreasing.

I work with several folks who do not have credit cards, limited bank services only b/c all payroll is electronic transfers, no cell phones, no landline, no internet, no TV, no ipods, no newspapers, no mags, no pagers, no email just a car, camper, boat, etc and they are some of happiest people I know and spend time with family, volutneer work, assist at church, travel, have large gardens, camp, own horses, own chickens and livestock, run in marathons, active in schools, read books. They have little debt and rich lives
 
As far as investments go there is one factor that you left out which is significantly different than in the 50's, 60's or even 70's and that's the percentage of Americans that participate in the stock market through 401k's or similar vehicles. The percentage of americans with direct investment in the market is much higher than in the 50's. To some extent, I think that increased level of direct investment in the stock market has tempered the swings as there's some $'s always flowing in due to the increased number of retirement plans that are directly invested in the market. Without that, I think the market swings we saw the past few years would have been even larger. :shock:
 
These co-workers i mentioned didnt lost a penny in the IRAs 401k, 459 plans, etc received from employer provided benefits
Why?
They stayed in the guaranteed investments
 
rogerbum":1a8kp98a said:
... The percentage of americans with direct investment in the market is much higher than in the 50's....
Click to expand...

Back in the day (before my time) there were also pensions. My Dad worked for the same local TV station for 33 years. These days 3 years is a long time let alone 33! I'm sure there are some here that worked for many decades at the same company.

Hopefully the experience of the last few years will result in higher savings and reduced debt risks.
 
There are ample 'reasons' for the meltdown and blame enough for all. We are told fairy tales every day - and not just by bankers or politicians. We, as a culture, have spent more than we earned and borrowed more than we should have. When we blame we should also look in a mirror.

I'm not suggesting we write our ideas (or prejudices) about blame - that doesn't resolve anything, since there is little we can do about what caused the problems we now live with.

There are plenty of folks who make a living trying to figure out how to prevent a future 'meltdown.' Chatting on this site, there's not much we can do about that either. We all have our fairytales or viewpoints. (And I have written more than 100 emails to our representatives in Washington, just in November).

I'm suggesting we look at what is - and how that will alter boating and our boating lifestyles. Jay gave a good summary of what they are doing, looking at retirement in the near future.

It seems that year 2009 has been a good time (for those with the cash at hand) to buy an unused 'new' boat - a 2007 or 2008. What's ahead? Looks like prices will be much higher for 2010 new boats. As those prices rise, will the price of a good used boat also rise? If one is thinking of buying a boat in the near future, if the 'stock' of boats in dealer's storage yards is gone and the price of 2010'would is heading up, should we consider a good used boat soon?

Boating is a luxury - we know many who profess nothing would keep them from boating, but if it's a choice between boating and a roof over the head or food on the table, we know boating would be seen as an extra. So will the sale of boats (and use of boats) be reduced until such time as the economy recovers and folks have 'extra' (beyond the essentials) money in the bank?

Perhaps the 'new' normal will require many to reduce spending and place a new judgment on what they need and what they want. How does that equate for each of us as individuals? El and I now feel (more than ever, since we live on retired income) that we must make tradeoffs. What do we alter in our lifestyles if we must reduce spending? The concert?, a long boating trip to Alaska?, a new car?, the vacation trip to the mountains with the grandkids?.....? Boating is a choice, and now we must more carefully weigh that choice against others. This past year we decided to continue our boating time, but to reduce the number of miles cruised. Family vacation time together is encouraged to be on the boat.

Our lives now, and our financial decisions, seem more like that we knew back in the early years of our marriage. And those were happy times, so perhaps we are gaining, not sacrificing. Perhaps we simply need to reign in our financial lives, and follow the example that Brent speaks of.
 
Interesting idea Roger. Certainly more money (from most working folks) going into the stock market today. But, could it be that many of those folks are less experienced investors, and more prone to 'panic' and move money from stocks or mutual funds into money market funds - if so, wouldn't that magnify market swings (especially on the downside)?
 
My father had a pension until the company owner raided it and took all funds then bankrupt the company, hid behind a slew of legal manuevers, etc and got away free of long term hassles and ruined 100's of his former employees lives but he lived the good life in style
Pure Greed, The State of Greed or the United States of Greed
and when this topic was started, the first thing I started to post was the Greed Factor.
 
Bill F., another great thread . Bill U. ,you might have a future in modern fairy tales . I enjoyed that.
Anytime is a good time to buy a new or used boat. Especially if it brings you joy !
Marc
 
El and Bill":1l0cjayv said:
Interesting idea Roger. Certainly more money (from most working folks) going into the stock market today. But, could it be that many of those folks are less experienced investors, and more prone to 'panic' and move money from stocks or mutual funds into money market funds - if so, wouldn't that magnify market swings (especially on the downside)?
Click to expand...

I don't think so. I would agree that's the case for personal investing but much of the money nowadays is flowing in through retirement plans in fixed weekly and monthly amounts. Much of that is invested in mutual funds so the inexperienced investors are often not doing the direct investment themselves. I think a lot of people (who are not close to retirement) simply let their money flow in without much monkeying with it (at least that's what I do - with the exception of shifting increasing percentages of my allocation from stocks to annuities as I grow older).
 
matt_unique":3qye36np said:
rogerbum":3qye36np said:
... The percentage of americans with direct investment in the market is much higher than in the 50's....
Click to expand...

Back in the day (before my time) there were also pensions. My Dad worked for the same local TV station for 33 years. These days 3 years is a long time let alone 33! I'm sure there are some here that worked for many decades at the same company.

Hopefully the experience of the last few years will result in higher savings and reduced debt risks.
Click to expand...
Yes but many of the pension plans were not well invested - e.g. they weren't well diversified (some were all in company stock). Also, many state run retirement plans were controlled by the state and many have switched over to 401k/403b type plans. As far as the market goes, the risk is low over the long term but high over the short term. Hence, when one is far from retirement, it makes sense to have much of the investment in stock with reallocation of the percentages to annuities etc as one gets older. There are a variety of "rules of thumb" for this (such as subtract one's age from 100 and put that percentage in stock) but which rule one follows depends a lot on one's own risk tolerance. I personally am 2/3 in stock and 1/3 in annuities and I sure as heck am not changing that until we pull well out of this recession. However, when we do, my stock risk will go down and my percentage in safer investments will go up. Anyone who is retired or near retirement that had the majority of their retirement funds in the stock market got screwed. However, IMHO, that's their own fault for not reallocating over time.
 
Interesting this came up again...during these few days for me I mean ...Bill and others.

My Mom and I just had a great laugh yesterday. Ya see, we were talking about the economy and I had to thank her for a small box she gave me on my wedding night... 31 years ago tonight actually (as I wait for Sherryl to get home as to allow us to go to our 31st anniversary dinner)...... She (Mom...not Sherryl) gave me two items and a note.

The two items...a round, brown porcelain pot with a handle on the side of it like a large coffee mug, (but, it is actually an old bed pan from days gone bye for these cold nights prior to indoor plumbing), and a small window frame. In it a small note and advise....

Those of you who have met "Momma Byrd" can just hear her telling me this...

"Son, always help others when you can, always live withing your means, pay cash, and keep these two items always.... and never let anyone ever tell you that you do not have a pot to piss in or a window to toss it out of."

About a week ago, looking for one of my packed away boat gizmos I now need...I found the pot and the note. Wonderful advise and a good laugh between Mom and myself yesterday.

The economy and my boating, well.... yes, it has hit me. I am looking at selling one boat to be able to power up a new one I have built and am building...rather than going back into the multi-boat ownership gig. Why....cause Sherryl likes the new floor plan better. Simple. Just do what you are told. :mrgreen:

But, it is my boat...or boats, and the friends around them and the places I go that give value to my life. Not the many folks I worked with for close to 30 years...of which, only about 3 are true friends now after retirement, not this nice warm home (but I do have to have a place to come to between trips)...or the nice car, or nice truck...however I need it to make the tow trips with the boat...and some without....

So more than the economy, it is still old fashion depression days advice, a pot to piss in, a window to toss it out of, my boat(s)...and most importantly, the folks I boat with. That is all still today,......PRICELESS!!

Hope to enjoy some more time tomorrow on the waters in the "bad weather"...when others have their fair weather boats stored..... out on the Cumberland...with some other C-Brats...or...just all alone.

Thanks for the value each of my C-Brats have given me.

Blessed today with good health and doing better than I deserve.

Byrdman
 
Wow,

This is a pretty heavy thread. Brats have spent lots of time composing from their hearts for us all to take in. Maybe that's why I like this place and these people.

Byrdman says it all for me too, when he writes:

Thanks for the value each of my C-Brats have given me.

Blessed today with good health and doing better than I deserve.

Byrdman
Click to expand...

The very best of the holiday season to y'all.

Capt Dan
 
Goodness ... where to begin.

I'll get to the boating aspect in a moment, but permit me to begin with some economic observations of the situation we (collectively) are in, and what I believe is coming down the pike. First, America has enjoyed a decidedly higher lifestyle than much of the outside World, and will now witness a leveling. Nationally, our debt is beyond any reasonable expectation of repayment so we must rely on gimmickry to keep our National afloat. In that regard we are blessed. We have some of the most astute financial slicky-boys in the World in America, and after they've taken care of themselves they may find something to help this Country. Sounds a little sour? ...sorry 'bout that. I believe that a lot of the recession-recovery data we're seeing in the media is the Voice of Hope over Reality.

We may be beyond the point where the government can do much for the man on the street; they have bigger fish to fry (and banks to reward), so don't be waiting by the mailbox for Your stimulus check.

On the positive side, I believe an individual's most productive efforts at this point-in-time are directed toward their family and inner circle of friends and neighbors. Advise your representatives if you believe they're listening; at least one is. ...I'll leave other rant-like comments for another venue.

Personally, I think we may see the USD ridden into the ground. Although I'm not an economist, I am addicted to economic wonkishness and study. The bottomline: Debt brought us to this dance, but it's unlikely we can spend our way to Prosperity. Meanwhile, the government (both sides of the aisle) cannot seriously discuss spending controls. We're Screwed.

With the Fed's adoption of "Quantitative Easing" in Mar 2009, we may not need too many more nails for this economic coffin. Given the global nature of finance and inter-connected economies, were it not for the fact that the USD is(was?) the undisputed reserve currency for the world, we'd already see a crashed USD. Currently, most holders of USD (PRC, Japan, the House of Saud, etc) are trying to figure out a quiet way to divest of USD's in favor of something else. At the moment that "something else" is gold. At a certain point we may simply see a dollar crash or devaluation which will bring on a whole host of other issues (somewhat understated).

I have to wrap this up; my thoughts are wandering....

Suggestions: (1) Rid yourself of debt to the extent possible. (2) Reduce your market exposure by 50%, and put the funds into things tangible (gold/silver, land, stock your pantry, etc). There are several other ideas but they'll emerge in time.

Boating thoughts: Learn all you can about your fuel economy and how you can enjoy boating with the least amount of dollars (ie. learn to enjoy displacement cruising). Count your boat blessings by the hours and the days you spend afloat, not the miles traveled.

And remember, nights spent at-anchor count double!

Enjoy your C-Dory while you can.

Best,
Casey
 
Yep I have 3 homes all paid off and paid off credit cards monthly but doing this since I got my Sears and Marathon Oil cards when 18. When the stock market started to go cuckoo from the greed masters we took action to stop the bleeding and pay off the last 2 homes.

We bought a new to us boat on June 30 and paid with a cashiers check. No boat loans! Yahoo
Now more money for mods, upgrades, etc just wish I was retired. Patty retires Dec 18 but definitely more boating time starting Dec 19 and a box of new items to install and let the washing and waxing begin and have 3 old Penn reels to get back to action. So back to the first posting, yes, more boating in 2010 and looking at 10" or larger GPS/Chartplotters and keep the Garmin 545 as a secondary.
I just watched Florida Gold videos and already read David Pogue's tech columns on digital camcorders. One day, I might have something on YouTube

Oldest child is in college and no loans yet and I hope the same for the next one.

My father was severely burned and had skin grafts. He healed on the outside but not in the inside. The economy is healing but the scars remain

I need to buy some new cool looking shades.
 
First, for the most part the C Brats seem to be a conservative group of people (not politically, but in the way that they live their lives). Boating is paramont in our lives, and many of us will do what it takes to continue to boat. Two years ago, we talked about what to do with the fuel prices at a high point and we all adapted. Through this "crash" many of us were unsettled, but those of us who had been in the market made adjustments and rode it out, without panic. We continued to boat, but may have modifiedd where we went.

The C Dory line, can be bought for cash--from a used 16 @ low of about $8,000 to a new Tom Cat @ $120,000 or so--and a lot between. Also many of our members can do their own work, and there are other members here to help them restore or modify their boats. The C Dory can do it all, except cross oceans--and I suspect that if one wanted to, it would be fairly easy to ship one to Europe (a group of PDQ 34 catmarans were shipped to the Baltic and back a couple of years ago, for cruising).

The younger members can profit from the advice of the older members--but I suspect that these younger boaters are already putting money away for retirement at the maximum rate, as well as making solid investments in land etc. Actually the recession has given a number of investors a chance to catch up with real estate--where they had been priced out of the market for the preceeding years.

I have seen Calif. real estate rise every since I bought my first home in 1969. The doubling of the house value every 5 or so years financed a lot of my boating activity. It was real wealth because I sold property and then used the profit for adventures. If one were to just ride the wave, there was a "risk" that the precieved wealth was different than real net worth, as a bubble burst like the last few years.

What is important now (and in the past) for boating is discresssionary wealth or income. Right now I see this as being tight. Credit will remain tight for this type of discressionary spending on recreation. I also see inflation as being a real threat, as well as loss of the dollar as the prime currency of the world commerace. For that reason I see investments best diversified in other economies. Boat building will continue to be relitatively more expensive, because raw materials (especially petro chemical based products) will be priced on the world market--and this may not favor the dollar as much as it has in the past.

Now I am going to get a bit political--first boating: I forsee that there will be more boating regulation. If we have a security threat in a port, it will come down very hard on the recreational boater. Consider security like an airport in your local harbor!

Next tax: There will be increased taxes on all of our activities; carbon emissions tax of some sort, more entitlements and increased medical costs, taxes to repay the massive amount of spending and national debt. These taxes will hit all segments of the population. I got a shock last week. Our social security is reduced by $358 a month next year because our gross income on our income tax filing is above a certain level. We are in the same situation as many small businesses, where the gross income, not net income is being used for a tax base. (For example, you can have a gross of $XXXXX and expenses of XXXXX, and make zero profit--yet the gross is the basis of some fees and taxes--it is here now!) In fact with a farm and some other high "expense" investments, the profit margin is low, but with high gross and high expenses.

Although economists seem the recession as nearly over, that does not mean that people are back at work, or discressionary income has increased to the point that more people are involved in boating.
 
I don't have anything to add to the discussion on the macro level, but I have had what I consider some encouraging economic news within the last week.

We are a distributor of machinery that is used on production lines. I have heard from two of my manufacturers within the last week. They were both way down in the first three quarters of the year. In the fourth quarter they are having to ramp up production because sales have rebounded dramatically. It happened so abruptly that they are not able to increase production quickly enough to keep up with demand.

This is an indication to me that people are starting to buy some items again. With inventories and the pipeline empty, production is starting to come back to life. I don't disagree with some of the more negative assessments here, but we have to remember that we have a big, resilient economy. It will eventually rebound. I just hope that it doesn't lead to the excesses of the last bubble.
Lyle
 
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