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Discussion Starter #1
The company I work is pretty much as non-flashy as you can imagine. We have very conservative finance people. They are usually very good about estimating things "to the low side".

Well, with the major snows that hit the East coast, the major COLD that is socking the the midwest, and the "threats of impending war" that is hitting the whole damned GLOBE our sales are off. The actual dollar amount is down only slightly, but the mix of low margin/commodity goods vs higher margin goods (including capital expenditures) is very very negative. Combined with COMPLETELY WHACKED increases in HEALTH CARE costs, horrible INVESTMENT RETURNS for company retirement plans, and zero room to raise prices, things are bleak.

Consequently, the company has announced NO RAISES, NO SCHEDULED PROMOTIONS, NO NEW PROJECT HIRING, and of course lay-offs. Fortunately lay-offs in IT will be very minimal, and do not effect me/any projects I'm on, but the queasiness I felt for the couple of hours from "official SEC press release" to "hearing it from my boss" were NOT PLEASANT!

Anyhow, given that a) the unemployment numbers for Feb were higher than expected b) more companies are getting on the layoff wagon c) no signs that things are going to be looking up -- I can't help bu think the bottom is going to drop for high priced vehicles.

Any body thing I'm wrong?

How are things in you neck of the woods?

Can anybody remember a "down turn" lasting LONGER THAN THIS ONE ALREADY HAS?
 

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renov8r,

I know exactly what you are talking about. I'm am (or was) in IT. In the Norteast as in mant other part of the country (I'm sure its not only in the Telecom industry) things have been bleak for a while with everyone guessing when things will turn around. Hang in there, things will get better (I hope).
 

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I know exactly what you mean, 2 brother-in-laws and 1 sister-in-law are unemployed right now and they are having difficulties getting a job. My mother-in-law is getting ready to sell her house due to unemployment.
 

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The economic picture sucks right now. I have so many friends looking for a job right now it's scary. All of the prospects and past clients I speak with are sitting tight and doing nothing! I didn't think it would be this bad and I thought we had turned the corner a few months ago.

Hopefully things will pick-up shortly, perhaps we should add a new forum to the board....job seekers?
 

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Typically, just when "everybody" is finally convinced things are going nowhere but down, nobody in their right mind will invest in stocks, etc., the bottom has been reached. But it has seemed kind of like that for a while now.

I don't think the war is even all that bad for the economy. After all, it does produce jobs, even if most of them are paid for in tax dollars, and money from those jobs starts recycling through the economy.
 

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Well the uneasiness due to the war and uncertainty about what lays ahead is really making people watch how they spend money on all levels it seems to me. It is amazing to me to see such abrupt stop in consumer spending since New Year. I just wish that war situation gets resolved rather sooner than later so that uncertainty is out of the way. I hope that after that spending picks up.

That leads me to the question: Did you guys hunker down and really watch what you buy? Do you defer the spending for everything but essential items?
 

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You're not kidding. I'm a Financial Advisor and I havent had a client buy a mutual fund in months. I used to think my job was safe, but lower producing stockbrokers are being laid off.

I don't think that prices on luxury cars are going down, especially where I live in New York City. Remember, Real Estate prices are high and this has offset most peoples losses in the stock market. Construction is booming and the health care sector couldnt be stronger.

I'm able to buy an X only because my house has appreciated so much and can use the home equity to buy it. There are many other people just like me.

Today Lexus released the price of the RX 330. The price is nearly identical to the X. More proof I dont see prices going down.
 

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From my end (labor and employment law), I've actually seen an increase in clientele. Of course, many of these new clients are victims of downsizing, suspicious termination (possibly age related).
 

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You know, people exaggerate. These so called "analysts" on TV and on the radio aren't worth listening to AT ALL sometimes. MOST of the time if you ask me.

I definitely hear you guys, and things are NOT as good as they can be, for sure, but the truth is, the economy is not sinking. It's stagnant, more than anything.

In fact, what's really going on now is that there is an overall slight DEFLATION going on. For economies, slight inflation/deflation (like a few percentage points) is actually HEALTHY. That's where you WANNA be at.

Now don't get me wrong here, I am describing a larger time period than what was mentioned in the earlier post of New Years until now.

The truth is this: The US economy is about 70% services-based. Take a guess what's going on in the services industry in terms of prices. Overall they are (lately) going UP! That's right, up. So is that a sign of peril? Hardly! And the economy's consituency will become more and more services-based, like 80% pretty soon perhaps.

Things are not as bad as other lead you to believe. This economy is VERY diverse, and believe me, the rest of the world's powerful economies are directly tied to its performance. There is a TON of money here, and it may not seem like it to many because relative to what the middle class lost (mostly due to poor decision making, no thanks to the STUPID dot-com craze, hyper-active hype of stuff that wasn't worth 10% of its selling price in many cases). The middle class in the USA is still in very good shape.

What I'm saying is, there is NO WHERE else on this planet where the economy is in much better shape than the US of A's right now. Maybe China if you wanna count that, but really, you all know what's going on in Japan, South East Asia, and Europe (don't believe those crazy reports about Europe's great performance or whatever, the EURO is strong now for complicated reasons, and the fact is, maybe the EURO *will* replace the dollar as the defacto world trading currency, but that will take a LOOOOOONG time (10 years minimum)).

People are people, we all tend to overreact, none of us likes to deal with bad times, in any shape, and we are just planning for the worst. This war with Iraq depression on the economy as well as peoples' minds would not be happening if it weren't for what happened just recently, namely 9/11.

But in the end, what I'm saying is, the "bad times" are exxagerated. YES we haven't seen such poor performance in some parts of the economy since the Depression in the 30s, but hold on to your horses, things will change to the better soon.

Now having said that, WTF is the deal with housing prices?! INSANE! SanFran?! Boston?! Elsewhere?! ARE YOU KIDDING ME?! Jeez. Rediculous. GREAT for home owners I guess, but come on! :cool:
 

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Hey, ndahbar, I was just about to create a post very similar to yours, but you saved me the effort!

I think a lot of what's going on is just "change." Some segments of the economy are getting weaker, and some stronger. Some of the problem is that we're still coming out of the "dot com" lunacy of a few years ago. If it were possible to ignore the "high-tech" stuff in the stock market, it's performance over the last 5 years wasn't nearly so "peaky." And the uncertainty of terrorism/war certainly isn't helping things along.

As far as the economy, there's still a lot of stuff that's doing very well, such as housing in a lot of markets. Look at the prices collectibles are getting, everything from rare coins to collector cars. Those markets are still off their highs of quite a few years back, but seem to be headed upward still.

Expensive vehicles like the MDX are still selling well, with or without incentives. If I visit my local Honda dealer, everything has a minimum $1,500 markup from MSRP, with the S2000 having a $6,000 markup. And I'm in Washington, not California.

Similar to what ndahbar was saying, the media are EXPERT at creating gloom and doom news segments. (Could some of that be because a Republican is in power?) They use words like "staggering" and "reeling" to describe what turn out to be sales EVEN with last year, or sometimes even up 2%. But I guess the problem is that stock prices are assuming 6% increases forever, and so are the corporate boardrooms.

There seem to be up areas and there seem to be down areas of the economy, as well as areas of the country. Some places are hit a lot harder by unemployment. It's hard to get a true, objective picture of where things really stand. If you or someone you know closely is unemployed, the economy looks very bad. If the employment picture is good, then its hard to tell the difference in the economy (except maybe from a declining 401k balance, and news reports).
 

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The California economy is poised for a huge rebound thanks to the stewardship of our fine governor. Because increased taxes always stimulate a down economy :rolleyes:
Vehicle tax likely to triple in state
Governor assures Assembly

The state Assembly cleared the way for Gov. Gray Davis to sign $3.3 billion in budget cuts Monday, after receiving reassurance that the vehicle license tax paid by California's 22 million drivers will probably triple.
 

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Discussion Starter #12
Strong sectors ? If "housing" --- who benefits

I'm not saying that Dale & ndahbar are wrong, but I just don't see ANY truly 'positive sectors'.

The numbers of housing starts are definitely going to be negative compared to 2002, mostly due to weather, but still down, The real "hurt" though is going to be in margins. The building products firms worked hard to add production capacity & upgrade for environmental factors -- they are making less profit then they have in any previous high-volume period.

As far as existing home sales, that is 100% driven by low interest rates, the finance companies are making decent money on fees and volume, but guess what 5% rates are going to do to long term return for the big mortgage holders -- hint, the costs of SERVICING mortgages is already about as low as it can get.

If you think deflation is a good thing, take a look at Japan's real estate market. Fortunately we don't have that kind of an over valued commercial real estate market, but it serves as a warning.

As I said, I feel fortunate to have "dodged a bullet", but I see nothing in the near term (or even one year out) to feel good about.

Even the "collectibles" market and such are NOT peaking so much as 'churning' as folks come to the gripes with how poorly their "real investments: are doing they look for something that at least is fun in itself (vs a purely financial instrument)...

As I also said, this is NOT a good time for luxury vehicles. Porsche has announced fairly significant production cut backs. Mercedes is running several "lease incentives". These things DO NOT happen if a "turn around" is just over the horizon.

Health care may be "the least sick" but as literally EVERY INDUSTRY/SECTOR is reeling under a HUGE increases in health care costs, one has to think that that party does not have too many tunes left to play...

Maybe I sound like "the voice of doom", believe me, I wish I did not. I really hope that things start to look up, but until the "Iraq War Part Deux" is done, and we get some sense of much it will really cost there is just too much "uncertainty" that equates to LEGITIMATE PESSIMISM...
 

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Back to your original topic, ren...

Everyone's been calling "the bottom" for the past 3 years.

I dunno what "services" industry is doing well. Maybe ndahbar can be more specific. Hospitality? No. Travel? No. Professional services (consulting, audit, tax, legal)? No. Medical? Certainly not (though that's not related to the general economic downturn, but its own insurance/healthcare issues).

I do know that for a fact that prof services (consulting, audit and tax) are absolutely languishing, especially IT consulting. Revenue is down, average rates are down and layoffs continue to occur quarterly.
 

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TheWorm said:
The California economy is poised for a huge rebound thanks to the stewardship of our fine governor . . .
I hope you're kidding . . .
 

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ndahbar said:
. . . What I'm saying is, there is NO WHERE else on this planet where the economy is in much better shape than the US of A's right now. . . . (don't believe those crazy reports about Europe's great performance or whatever, the EURO is strong now for complicated reasons, and the fact is, maybe the EURO *will* replace the dollar as the defacto world trading currency, but that will take a LOOOOOONG time (10 years minimum)).

Now having said that, WTF is the deal with housing prices?! INSANE! SanFran?! Boston?! Elsewhere?! ARE YOU KIDDING ME?! Jeez. Rediculous. GREAT for home owners I guess, but come on! :cool:
I agree with you here. The U.S. economy is in much better shape than elsewhere. That Euro thing is a joke. Last time I drove from the UK to the continent, they were still arguing about what the silly thing was going to look like. Then, in an effort to show "unity" they all placed their country's abbreviated letter on their license plates and encircled it with a ring of stars. The UK never went along with it, and I don't beleive they ever have (too steeped in tradition and won't use money that doesn't have the Queen on it, silly lot.) As William Wallace's friend said "they canna agree on the colour o' sh*te."

Housing costs here have gone through the roof. I was off sick last week when a Realtor came to the door asking if I was interested in selling. Housing is in such demand they are going door to door trying to find property for clients. I probably couldn't afford this house if I tried to buy it today, and I've only been in this one 5 years. DaleB just moved here, so I'm sure he can vouch for me when I say its outrageous, but then he moved from the Bay Area where I'm sure it's ridiculously higher.
 

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greatscot said:

I hope you're kidding . . .
Shoulda put an extra :rolleyes: in there, huh?

Yea, kidding.

Oh, Gray, if you're lurking here: :30:
 

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Whew!
:19:
 

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Speaking of weak economy and possible unemployment, those of us who financed their x and making monthy payment now for the next few years are specially anxious to know what will happen to our job status in the next few months or years. Some take home equity line credits or refinance their houses to pay for their Xs. We all hope that we can hold on to our jobs and continue enjoying the driving of the X. :rolleyes:
 

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Hi All:

___Interesting discussion.

___I am in the camp who believes that in a relatively stagnant but stable economy, housing prices can rise due to the ability of the home purchaser to afford the higher home price via lower interest rate. Demand is probably very similar to what it once was but the lower rates make it much easier for the average home buyer to afford an ever higher priced home with the same monthly payment or income. I know I am just repeating what most here have heard at one time or the other …

___That being said, the DOW at a hair above 5 yr. lows, S&P pushing new 6 yr lows, and the Nasdaq just a few percentage points higher than just recent and 5/6 yr. lows, this is real money irregardless if its going to be spent on a luxury SUV or to place food on the table. I am not talking about direct cash coming from the stock market for purchase of consumables but the perception of ones wealth when the markets are doing well and the ease at which we decide to make large or luxury purchases when the economy is running on all 8 cylinders. The problem? The DOW is at 5 yr. lows! Sure there was the boom on the front side but with the 5 yr. bust, people are not going to be retiring at 45 and 50 like they had once planned but more like 55 and 60 and they are just hoping to do so.

___An example of the above can come directly from my parents who are relatively well off thanks to a 25 yr. investment in the Pharmaceutical company my mother worked for. Over the last 4 years, that investment has declined (only 30 – 40% in comparison to much worse for many others) to the point where they are deciding to forgo vacations and are purchasing lower cost consumables. 4 Years ago, they wouldn’t have given a second thought to purchasing an HDTV or going out 3 + nights a week. Now they do and it’s extreme. I don’t believe they will ever be able to spend their assets down to 0 in their remaining lifetimes but with depression era upbringings and the current media mentality, they are not spending nearly like they could have just a few short years ago. This is real money in yours and my pockets and my parents have yet to spend a dime of their stock market holdings if that helps explain what I believe to be happening.

___On another note, I have never seen the economy so lackadaisical. I follow Computer HW and pricing very closely and the ability for a tech company to increase its prices on its latest offerings is and has been for quite some time, almost non-existent. With the inability to increase pricing, cuts have to be made in the employment or efficiency of said company to survive. Guess what happens when you are the employee of said company … You are worried to death that you may be the next in the unemployment line. You should see what happens when you try and raise your prices in the Landscaping business. My fuel costs have doubled in the last 5 years, my costs have gone up a much smaller amount but maybe 20%, and I am lucky to keep my rates the same as they were 7 years ago! The only item I have going for me in this small business is that I can take advantage of lower cost parts when they become available to me as shown here vs. the rest of the business that probably doesn’t know about such outlets and the fact that I live in the same sub most of my cutting is performed in. The other Landscapers are paying outrageous amounts on large transportation equipment and fuel that I am possibly paying only 30% of what they are.

___I am sure most have heard the term pushing on a string … Japanese rates are negative by most accountings and with only a point or so to play with in our own economy, what happens if we need stimulus? Your home mortgage going from 5 to 4% will help you out but will your bank offer you anything for holding your money in savings or checking? How much less are they making on a 4% loan vs. the current 5% +? Do the banks receive anything more for their own overnight floats? Eventually their bottom line gets hit as well once the refinancing fees top out …

___Finally, the Iraq decision/outcome is not going to change the above. Maybe if gasoline were to come down to give consumers more free cash to spend on goods and services that employ a lot more of the country, we may than all stand a better chance of longer term prosperity. From what I am seeing, it will be a very long road to recovery for many including myself in today’s day and age.

___After all is said and done, I need to get to bed as I am starting to ramble about issues so far above my head that I am only hoping to participate with some degree of intelligence. Not a bad post for #1000. It’s to bad it had nothing to due with our new X :(

___Good Luck to us all. We may need it …

___Wayne R. Gerdes
___Hunt Club Farms Landscaping Ltd.
___[email protected]
 

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The present administration is very much preoccupied with the Iraq issue and the economy is NOT being given the attention it should get and therefore the situation could very well get worse.
I have seen/known many people without work right now -- and they are hurting very badly. Even the low paying jobs are hard to comeby.
I work (IT) with one of the biggest local gov't. here in the MetroDC area and during our meeting last week we have been given some hint that the worse is yet to come. The percentage of compensation increases will be decreased or won't be implemented for this year to prevent layoffs. Hiring have been put on hold.
If this thing is happening in the gov't sector (which is non-profit) then you'd expect something much worse in the private sector.
The only safe jobs right now are in the health services sector (nurses, physical therapists, etc..).
The high cost of gas is draggin this economy down to a possible return to recession.
 
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