Uh Oh!

E

El and Bill

New member
"Strong evidence is emerging that consumer spending, a bulwark against recession over the last year even as energy prices surged and the housing market sputtered, has begun to slow sharply at every level of the American economy, from the working class to the wealthy.

The abrupt pullback raises the possibility that the country may be experiencing a rare decline in personal consumption, not just a slower rate of growth. Such a decline would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year."

http://www.nytimes.com/2008/01/14/busin ... yt&emc=rss

The above tale from the NYTimes might herald a significant change in the boating world in the next few years. If indeed the economy slips into recession, and the price of fuel remains high, what will be the impact for us boaters? What do you think?
 
The New York Times lies. Constantly.

It's stock is falling steadily due to poor management and a liberal political bent which discourages readership. Editors and writers have been fired for making up stories.

Place little stock in what you read in the NYT, especially during an election year.
 
I don't know about the NYT but I do believe that the press affects our daily lives by printing stories that aren't always, nearly always at least, factual. I think they really change how the market reacts, and the "numbers" from reports aren't reflective on how things really are. The polls in NH are a good example.

It'd be a good drill to shut the news off for a month and see what happens but I know that's not realistic... :roll:

The stories don't affect how we spend, I simply don't listen to them, or at least react to them. I do have to watch the market though and make changes in our investments because they DO react and affect our "afterlife".
 
Regardless of the political slant of a particular newspaper, economic indicators are showing that consumer spending is being pulled back. Smart businesses have already moved towards a more streamlined model. The problem I see isn't just in consumer spending, it's the over-spending... people buying beyond their means (especially in the housing market) and are now strapped. This affects all their other buying decisions, especially those considered "discretionary" (like boating). Big ticket sellers (like automobiles, RV, boats), and especially those products that use gas, have already seen the downturn.

Here in south Texas, we've seen something very unusual: occupancy in the many RV parks in the Rio Grande Valley. One of our local newspaers did a Sunday feature on it. We see fewer boats out.

If you look at it historically, the economy is closely tied to fuel prices. When they take a big jump, the economy tanks. Some of it may be psychological, but the effect is very real.

The political candidates have changed their rhetoric from the war to the economy. Three straight weeks of losses in the stock market. It looks to me like the economy has already changed.

Jim
 
Working in Oil you get to see the other side of the coin. Our information comes not from the NYT but from other (possibly questionably) sources. In the past I would agree with the recession theory but these days there are so many other causal factors. Take for instance the large investors
who can change the day to day tide simply through manipulating via futures!
Economist can easily track this trend as their (investors) actions bear no evidence of being tied to supply or any other tangible reason for the price changes.
Big Oil is no longer to blame for the concerns you may have over pricing, but some of us are glad to see higher prices which are seen as a good thing.
I guess it's a glass half full / half empty thing?
Mike
 
Big Bad Ben":3q3fmtp9 said:
The New York Times lies. Constantly.
Click to expand...

Add the San Diego Union to your list of liars because this morning's paper carries the same refrain. Spending, especially by middle/upper class is down. Way down. On the other hand, there's been little drop in fuel consumption.

Nobody wants to hear the "R" word, especially in an election year. I think a number of us still remember a word that was truly terrifying:

Stagflation

We lived through it but it wasn't fun and it put a lot of people out of work. Yep, the judgemental among us will point fingers and wag tongues, but it doesn't change the facts and since it's been proven time and time again that we don't really learn from history's mistakes, I expect a wild and not so enjoyable time ahead. Hopefully brief, but bloody nevertheless....

Don
 
First, NYT is a total rag these days. They have been caught and are now paying the price. But the news is definitely a half full glass for those of us that went with C-Dory or other similar economical boats. I started to see it in 2002 when I sold my sailboat in seattle and moved back to oregon. The twin engine bayliners and others just aren't out there like they used to be. I am sure it is also hitting the RV industry, but they seem a little slow to react. C-Dory ought to think about dropping that 29 and maybe think about a sailboat or motorsailor for what is coming in the next few years. I will give up the handcrafted beers (sorry pat) and drink bud, the dog will have to get used to generic dogfood, and the wife will have to do her own nails, but I will be C-Dory'ing on no matter what.
 
just my two cents, as a business owner of 30+ years, regarding our current economy and how that might effect our bottom line over the next several years.
1. our 2007 production was 22% over 2006 and our total agency income has increased over the previous year for the past 25 years. however when you factor out bonus, which is never guaranteed, our actual income decreased over the previous year by 6%.
2. i believe my industry peaked in 2004 and has steadily decreased each year thereafter.
3. 2008 will most likely be the first year in the last 26 that agency income, including bonuses, will be less than the previous year.
4. i personally work with our commercial accounts, ie, contractors, business owners, both mid range as well as mom and pop businesses. they are all singing the blues. the trade contractors are withering on the vine, realtors are seeking other industry employment. and new car sales are down.
5. i am not going to make any big ticket purchases and instead will simply bank money. that's not going to help the economy, but thats the mentality going around at this time.
6. depending on your age, the stock market is not the place to be today, we're only one terrorist attack away from a market meltdown. good quality bonds and money market accounts should do ok. puts and calls, or shorts, if you have the nerve might make a risk taker wealthy or very poor.
7. my prediction is, we are in for challenging times and those who have saved money should fine good buys on housing, vehicles and boats, should they have an interest.
8. boat sales in general have trended down over the past 5+ years however small boat manufactures probably will do ok, and, two or more gallons per mile boats are going to be white elephants.

i'm a extremely positive type guy, but this is what i'm seeing today.

that's my story, whats yours?
 
Been thinking about this. Same is happening in Canada. Fuel is sky-high $6 GAL (hence a 4 stroke 40 HP limit). Loonie is sky high (at par or above US green back), depressed auto sector...

That aside, not to dwell on politics; a little story from my part relating to your NYT. Our newspaper (Ottawa Citizen) owned by the left leaning Liberal party loving Asper family, buddy with the ex-PM Chretien, fired it's editor because of a less than stellar Op-Ed. Talk about freedom of speech.

Anyhow I have bigger problems to worry about - like the trim colour on my 16' Cruiser !

Marc
 
Well, here's a little somethin' from my favorite paper, The New York Times. Hopefully it should help the economy between here and Everett. And, think of all those oil rich people from the Middle East vacationing and buying second homes in Alaska!


Gulf Air Signs $6 Billion Deal for Boeing Jets

By BLOOMBERG NEWS
Published: January 14, 2008
Gulf Air, Bahrain’s loss-making national carrier, signed a $6 billion agreement with Boeing for the delivery of 24 Dreamliner aircraft to begin in 2016, a spokesman for the airline, Adnan Malik, said on Sunday.

The deal includes a firm order for 16 of the 787-8 airliners worth $3.4 billion and options for an additional eight, Mr. Malik said by phone from Bahrain. The carrier is also considering alternatives from Boeing and its rival, Airbus, to fly short-haul routes and could order a total of 45 new planes including Sunday’s order, he said.

The Dreamliner is Boeing’s most successful new program in terms of sales, with more than 800 orders valued at more than $120 billion. It ranked second in commercial orders last year behind the 737 narrow-body model.

Middle Eastern carriers posted orders and options worth about $85 billion with Airbus and Boeing at the Dubai Air Show to meet surging travel demand.
 
The media has successfully predicted 12 of the last 4 recessions that we have had. Their economic picture is painted with a broad paintbrush, because gloom and doom makes for a great headline. (remember Y2K?) The economic picture of Detroit is much different than the economic picture of Seattle, which is different from the economic picture of Los Angeles, so these economic snapshots need to be viewed regionally.

There are several smaller trends that are being ignored. The baby boomers are approaching retirement age, and with retirement comes a focus on leisure. The baby boomers are inheriting the estates of their parents, and are willing to spend. Baby boomers are becoming empty-nesters and with the kids out of the house, have more discretionary income.

Even with the softening of the real estate market in many parts of the country, most people who have been in their homes for ten years or longer have equity that can be tapped for discretionary purposes.

If a person wants to be involved in boating, golfing, scuba diving, skiing, rving, or any other expensive hobby, they will adjust other areas of their budget so they can continue to enjoy their favorite leisure activity.

Best regards,
Leo
 
Thanks for providing a soap box Bill and El, I'll step up now. My take is that we're experiencing a time of correction and reckoning that was due to happen at some point. The sooner it happens the sooner we'll get through and the milder it will be. Stepping back from the immediate situation one can see time and time again that the old rules really do apply. It's very hard to feel much pity for individuals and financial institutions that borrowed/lent recklessly; the market is doing exactly what it's supposed to in these situations. This correction hurts everyone, but of average folks, those who've lived within their means, avoided debt, and practiced simplicity/delayed gratification will likely fare the best. Those who haven't would do well to pay attention and learn through the economic pain, and resolve to do things differently in the future. Those of you who've been responsible but are casualties of others' behavior or of circumstances (such as health problems, etc.), my heart goes out to you. Something's definitely wrong with our culture when credit card companies show TV commercials characterizing folks who try to pay with cash/checks as wierdos, and glorifying those who "lay down the plastic" as heroes. OK, time to cut myself off and let somebody else have a turn. Thanks, Mike. PS for anyone seeking a simple, effective program for winning with money, I'd recommend Dave Ramsey, accessible via DaveRamsey.com
 
westward":9si8absz said:
Thanks for providing a soap box Bill and El, I'll step up now. My take is that we're experiencing a time of correction and reckoning that was due to happen at some point. The sooner it happens the sooner we'll get through and the milder it will be. Stepping back from the immediate situation one can see time and time again that the old rules really do apply. It's very hard to feel much pity for individuals and financial institutions that borrowed/lent recklessly; the market is doing exactly what it's supposed to in these situations. This correction hurts everyone, but of average folks, those who've lived within their means, avoided debt, and practiced simplicity/delayed gratification will likely fare the best. Those who haven't would do well to pay attention and learn through the economic pain, and resolve to do things differently in the future. Those of you who've been responsible but are casualties of others' behavior or of circumstances (such as health problems, etc.), my heart goes out to you. Something's definitely wrong with our culture when credit card companies show TV commercials characterizing folks who try to pay with cash/checks as wierdos, and glorifying those who "lay down the plastic" as heroes. OK, time to cut myself off and let somebody else have a turn. Thanks, Mike. PS for anyone seeking a simple, effective program for winning with money, I'd recommend Dave Ramsey, accessible via DaveRamsey.com
Click to expand...

Dave Ramsey. Love listening to him but do question following his entire strategy. For example, when I remarried 4 years ago, my bride had some debt accrued from raising 4 kids on her own while putting herself through college. We've attacked that debt, reducing it by 2/3, but the rest remains on a 2.9% fixed credit card deal which I'm slowly paying off, our only credit card debt. Ramsey says to pay all credit card debt off before attacking any higher interest 1st or 2nd mortgage. I can't see the merits to that advice in my situation, so consequently we're attacking the 7.5% 2nd mtg. instead.

Bottom line. The amount of interest rate is what is relevent....not the source of the loan.

-Greg
 
It sounds to me like El & Bill had better step it up, abandon their minimalist ways and get the gen set and jumbo TV. :)

I think that folks that got into boating because they thought it was the cool thing to do, may be selling their boats. Hard core boaters that have salt in their blood will find a way to keep on boating. I hear you can get good money for a kidney
 
In the Dallas area, the only area that seems to be hurting is real estate. $100 a barrel oil has provided a great offset to the real estate problems... at least in the short run. The economy doesn't feel particularly sluggish from where I'm sitting.

I totally concur with the general sentiment that the folks responsible for reporting the news now prefer to manufacture the news. I predict this will be a fascinating election year and it's already apparent that the press would love nothing more than to become the kingmakers of our beloved country.

The major reason I purchased the R21-EC is fuel economy and I just ordered a Ford Escape Hybrid for commuting and extended travel. I figure folks just have to "think on their feet" and try to stay ahead of the game. An axiom in my business is that "Nobody plans to fail, but folks often fail to plan."

If you'll pardon a modest recommendation, I've moved a substantial portion of my money into life settlements... double digit returns with no connectivity to the stock market. Definitely worth looking into.

So much for my two cent's worth!
 
I get my financial news out of the Wall Street journal, which I read daily. I also read some of the financial magazines, such as Business Week. I also receive some of the boating industry magazines.

The chance of a recession is called at 50/50 today by most of the "experts"--meaning economonists and financial experts. I personally think we are already in the early stages of one.

We are told we have a low inflation rate, but the CPI does not measure all of the costs of living, and gives a false sense of security. In our local area real estate has really tanked. Our county is faced with less income and potential loss of county spending.

The unemployment numbers can be misleading, but so far they are low (remember that these are government provided numbers--and mostly rely on those who file for un-employement.)

In our trip to Cleveland this last Summer, there were large areas of forclosed houses and I would say that parts of that city were already in recession.

Another factor, to consider is the global economy and the lack of strength of the dollar. For example, the demise of PDQ Catamarans is at least partly due to the higher Canadian dollar and increased cost of raw materials. (There appeared to be other factors involving internal and city issues)

The marine industry is in for a perticularly rough time in the next year or so--but no more than it had several times in the past. I think that we will see more boat builders going out of business. The cost of fuel and materials will decrease new boat sales, and subsiquently used boat sales. Boaters will take shorter trips, and some boats may undergo forclosure on loans.

Baby boomers will probably postpone their retirement because their apparent wealth will decrease, as there is less value in real estate, the retirement accounts taking a hit as the stock market weakens and inflation continues due to costs of oil based products.

But just one person's opinion...I would love to hear others views.
 
Too bad about PDQ going out of business (I hadn't heard that until just now). Has anyone heard anything about Camamo Marine (makers of the Camano trawlers)? I've enjoyed viewing their website in the past and can't get anything recently. Perhaps a change of domain... or something else?
 
The New York Times (and all newspapers) are declining in curculation worldwide. They're expensive to produce -- (heavy =shipping costs, lots of trees ground up to make disposable garbage, ink into the water and bleach to recycle the paper), and most importantly, more and more young people don't have the attention span to read for a protracted amount of time anymore. The internet versions of the news are taking over. Newspapers are also already dated when they hit the doorstep. Even televison news greatly lags what is on the net. With the leveling of the publication field and increased competition for access to so many lcd sreeens, and with many of these sources lacking quality editorial boards, there comes the attendant trend of more and more poorly researched, mis-informed news & propaganda taken as "truth". As a teacher I struggle with this phenomenon daily with the teens and pre-teens who will be replacing us.

I went to China (Ghuangzhou and Bejiing) in 2001 when we adopted Ellie. There were more of those huge sky cranes on top of more skyscrapers under construction than I've ever seen in New York, Los Angeles, Seattle or Chicago. At any one place you could see twenty or more of them. That place's growth is on fire! As more and more Chinese and Indians become middle and upper class, they will want more and more cars, boats, want bigger homes and the materials to build them, need more factories and thirst for the fossil fuels to feed their impossilby large populations. Fuel is going up in price based on this massive growth in demand.

Everything I consider buying (beyond basic family needs) is put upon one side of the scale and on the other is boating + moorage + boat gas + fishing. That is why I don't have a cell phone or satellite or cable television. That is why we are selling our waterfront property.

Yeah, I'm an aquaholic.... (reference to one of my all time favorite posts here on C-Brats) and I will boat or die. C.W.
 
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