Economy, Hey Tom
Back in May, we talked a bit about anecdotes that business was picking up and data seemed to confirm.
All at once it appears to have stopped and trailing data also seems to be confirming.
What are you seeing?
Re: Economy, Hey Tom
PS Must be because Dems are going to raise taxes and all the productive folks are in their foxholes.
Or maybe it is just that all the productive folks already have all the money and don't have anybody to sell things to other than each other.
Re: Economy, Hey Tom
Hey nox, sorry it took so long to reply. The forum wouldn't let me sign in, and am pretty busy too. Things are kind of goofy right now, earlier this year it was starting to come out of the funk the economy is in and was looking good. Right now though things have tightened up quite a bit. I have two commercial bids where the bank has shut down the money flow. There seems to be some interest or will to remodel/expand/update but the banks won't cut loose the money. The usual gossip says they are hoarding it to make the Nov. elections swing towards republicans, and it seems to have a little merit because I've heard the same things from the Ch. of Comm. folks, and various contractor associations.
But residential work wise, things are red hot. A lot of houses are moving right now to downsize their inventory, and investors are scooping them up pretty fast. The higher priced ones(from a couple of years ago) are moving but at a somewhat slower pace, mainly due to property taxes and a bigger mortgage, some have been looted of their fixtures and plumbing/wiring, but NOBODY wants that "mcmansion" anymore.......unless of course it's dirt cheap. A lot of those same houses that are under 5 years old need new floor covering, repairs and such, almost like it's a 20 year old house. The smaller "investment properties" are in big demand...........everybody is looking for a deal, and some long term income. Case in point, one of the most recent properties that I picked up sold for 89,500 in Oct. '07, the owner tried to sell for 102,000, bank got it, then HUD had someone preapproved and had the place sold for 61,500, and they backed out, and I got it for 47,500. It has a 2nd floor, which doesn't rent well, but 2 car gage and decent fenced in yard, I just couldn't pass it up.
My main client that is about 80% of my business, and the 2nd one really want to ramp up the buying and renovations. Between those two, they are buying 99% of the properties that I find for them. Houses are going cheap too, and quite a few elderly are wanting to sell to move somewhere else, or move in with their kids.
It's been a weird year, I surely didn't expect things to shake loose like this until sometime next year, or at the first of next year at best. Out of 6 years, this will definitely be my best.
I had my monthly after-work party/mixer yeaterday afternoon. A friend that is the G.M. for a ready mix said they are barely hanging on, and heard the same thing from a lumber company owner. Both are really good companies with good mgmt and good employees, but ther just isn't enough volume to maintain. The big 3 consumer lumberplaces( if they even qualify for that term) don't have much flow either, it's everthing BUT lumber and materials that they're keeping afloat on. Everybody knows that if they can just ride it out, things will EVENTUALLY trun around, but not to the pace that they were. It seems that most businesses HAD to increase in size just to keep business coming at them, and it's really hurting them now. I really hope that a lot of the companies still standing now make it, they are the real professionals from mgmt to service and reputation. The thinning out of the last couple of years hasn't been all bad, but there may be some collateral damge to the "good ones".
Re: Economy, Hey Tom
Hi Tom, you said "The thinning out of the last couple of years hasn't been all bad, but there may be some collateral damge to the "good ones"."
Isn't that the way it always goes. When things get tough there are always a few that are caught in a 'tight' financial situation or do not react quite quick enough and get forced out even though everything else was going right for them.
Seeing that in the swine industry in Ontario.
Your COOL legislation has really put a bunch of hurt on Canadian producers on top of the market down turn and a lot of good producers are being forced out. Producers who are good production wise but recently built new or purchased more and just can not weather all the losses.
Market numbers in Ontario have been below 80,000 pigs for 3-4 weeks now and used to be over 120,000 but prices remain below COP.
Just heard of another younger fellow who I consider an efficient producer who has been forced out. Had a new barn about 5 years ago which was probably the anchor that weighed him down but even people with older facilities are hurting bad too. Hope was to recoup losses when market turned around but barns are going to be worn out before that happens.
BTW site would not let me sign in for a while either but appears to 'remember' me now when I connect. Do not need to type info in to 'sign in' again and again.
Re: Economy, Hey Tom
It's hard to watch because you know the consequences if things go South but it works out for some. Management usually can't do any wrong when things are running full-tilt, but most don't have the knowledge or experience when things go bad. I saw since '95/96 people start a business with absolutely NO knowledge or experience eke out a living, some better than others. Greed by the companies that happened to already be in business threw them into overdrive, and it also brought in the shadiest of the shady characters. Some people and businesses paid a price for getting involved with them, and a very few didn't. I think about 50-60% needed to go, they weren't of use to anybody that had the unfortunate outcome of any relationship with them. The technology was there for some long overdue changes in the industry, but usually wasn't taken advantage of unless it made up for cheap/unskilled labor or fed their greed. lot of the "mcmansion" house sitting around now are basically worthless. If you buy one, the (lifecycle)costs over the life of it will break you, or you have to spend a big wad of cash to offset that. Sometimes it is factored into the price, but usually not unless there is some clear and obvious damage or repairs.
There is one bright spot in the hog markets I think, it leads me to think that prices will come back up soon. I've noticed commodity prices have gone up somewhat, and maybe it's because of the washout of the economy. Hopefully the right people come back in, the ones that know the deal and aren't obsessed with greed.
Re: Slow Poison
Economy: Disappointing GDP growth of 2.4% in the second quarter signals that our "recovery" isn't what it's cracked up to be. But then, how could it be when politicians have been trying to kill it for years?
How do you keep an economy from digging itself out of a major recession? One surefire method is massively expanding a government whose major programs are already on their way to bankruptcy, then sitting idly by as major tax increases arrive.
The Democratic Congress has spent a trillion dollars on a failed Keynesian stimulus that promised millions of jobs that never materialized. They added a massive new entitlement in the form of a government takeover of health care when the entitlements already burdening us are going broke. And they are letting the Bush tax cuts expire at the end of this year.
Why in such a chancy economic environment would investors invest? Why would entrepreneurs take risks? And why would businesses expand and hire new employees? By extension, why would consumers spend?
The normally cautious Conference Board reacted to the tepid second quarter figure by warning that "The post-recession rebound is history." And its forecast was for GDP to "slow even more markedly, to a 1.6% annualized rate in the second half of the year."
The tepid new 2.4% figure follows 3.7% GDP growth in the first quarter of 2010, and 5% growth in last year's fourth quarter.
But the Associated Press's quarterly survey of 42 private, corporate and academic economists, released just last week, finds the numbers crunchers worried on a number of fronts.
The lack of jobs and sinking real estate values mean people are saving for a rainy day, not spending, with one measure of savings hitting its highest level in over a decade.
Also, a majority of the economists don't expect unemployment to fall back down to the historically typical 5% level until 2015 or later.
Excuse us, but where on earth did that trillion dollars in job-creating stimulus go?
It is under these scary conditions that the Bush tax cuts are about to expire. Deutsche Bank last week warned its clients of the "worst-case scenario, allowing the Bush tax cuts to expire" accompanied by failing to fix the Alternative Minimum Tax could mean a 1.5% "fiscal drag in 2011 on top of the 1% fiscal drag we expect to occur as the Obama fiscal stimulus package unwinds."
That, the mega-bank concluded, could possibly be enough to "push the economy to a stalling point."
Sen. Evan Bayh of Indiana is leading a group of sane Senate Democrats that includes Budget Committee Chairman Kent Conrad of North Dakota, Ben Nelson of Nebraska and Joseph Lieberman of Connecticut who want to save the Bush tax cuts.
Invoking tax-cutting Democratic President John F. Kennedy, Bayh told CNBC's Larry Kudlow that "the top priority right now needs to be getting this economy growing."
Bayh condemned his party's embrace of class warfare and pointed out that many Americans in the top tax bracket "happen to be small business people — they're the people who are making the investment decisions, making the hiring decisions. The last thing we want to do right now is to reduce their confidence and make them fearful of the future."
These are wise words.
If the president and congressional Democratic leaders won't listen to Republicans on the economy, can't they listen to their fellow Democrats?
Re: Slow Poison
Let the facts speak for themselves, instead of carrying water for the republican party, because once AGAIN, you're full of crap. BTW, wasn't the republican party AGAINST Kennedy's tax cuts???????????
Re: Economy, Hey Tom
it seems as always obummer was using fake numbers ---the economy is still going south --keeping history intact as to the obummer regime ---NO country as ever prospered under these circuimstances