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| Name: |
Webmaster
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| Subject: |
Economic Downturn
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Date:
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12/18/2008 12:26:32 AM
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I think it would be interesting to have comments from people on the kinds of things they see and hear that relate to the economic downturn. There's always the stuff you hear on the nightly news every day, but what would be of interest here are topics not publicized by the media. I've talked to people the past few months and have been told things that blow my mind.
Mention the type of industry in the subject and tell your story. Refrain from using business names unless you own the business or have consent of the owner. Keep related discussions threaded.
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| Name: |
Webmaster
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| Subject: |
The Trucking Industry
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Date:
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12/18/2008 12:32:02 AM
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I've heard that an Alabama trucking company was feeling it bad in this economy. Recently, I ate breakfast with a truck driver (no affiliation with that company) who told me this:
A few months ago, the trucking industry was raising their rates due to the price of gas increasing. Now that the price of gas is half what it was in the summer you'd think that the trucking companies are finally making a decent profit.
The problem with the trucking industry now is the dampened economic activity has reduced the shipment of goods. This, of course, is one reason the oil consumption has had a reduction in the U.S. for the first time in many years.
With that being said, more trucks on the road today are being driven empty (not hauling anything). When the economy was good, load pickups were likely at their drop-off destinations. The driver stated to me that until recently he had never had an empty drive back from North Carolina, a trip he regularly makes. On his last trip, he dropped off a load, contacted dispatch and was told that there were 125 trucks in line for four (4) loads within 100 mile radius. He drove back home to Alabama empty.
That's one example, but he said he had never seen road transport this bad since he had been driving.
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| Name: |
wix
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| Subject: |
Economic Downturn
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Date:
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12/18/2008 8:24:43 AM
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In my opinion, most of the current economic problems have been created by the price of oil and the inflation that has hit the entire economy because of the increased prices. The mortgage mess is a factor but not as big as the oil inflation that the gov. doesn't want to talk about. The CPI is the biggest joke in the government.
Now we're throwing money at everyone with the hopes of restarting the economy. Soon we'll see inflation caused knee jerk reaction to the flood of cash and we're back to the 70s again. Blame the oil maggots.
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| Name: |
Talullahhound
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| Subject: |
Economic Downturn
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Date:
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12/18/2008 8:48:45 AM
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DH's nephew works for a trucking company. He said that business is so down that they aren't working full weeks anymore. Said lots of people are leaving the company because they are no longer making enough to support their families.
Another nephew moved to Atlanta, hoping for a job opportunity. So far, nothing has surfaced and he is working as a greenskeeper at a golf course.
My BIL is a lawyer in M'gomery. He says that his business is booming in a very sad way. Lots of business people are going under. He says that he expects January will be worse. He believes that a lot of businesses are just hanging on through December and fall off the edge in January.
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| Name: |
water_watcher
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| Subject: |
Economic Downturn
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Date:
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12/18/2008 9:20:55 AM
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I would agree that oil put pressure on the economy and we need to do more exploration in the US which will create more stability in the market. But it is still a commodity that is driven by supply and demand and to a lessor extent the value of the US dollar. When oil hit $149 a barrel demand was still strong and the dollar VERY weak. Oil is now down to $39 a barrel and may go lower. That is because demand is falling so fast and the dollar had gotten much stronger. But now we are seeing Opec saying they are going to cut production 2.2 million barrels a day to align supply with the reduced demand. We also see the dollar weakening with the feds going to a 25 basis point target rate for inter bank borrowing.
The pressure oil had on peoples pocketbooks may have contributed to some of the housing problems ... but as many people have written ... that problem was going to happen no matter what. the loose sub prime leading to less than credit worth people drove a housing bubble on prices .... when that burst people started walking away since their mortage balance was higher than the new value. Also, many of these loand were approved with nothing down and teaser rates. When the rates started to adjust people could not afford the new level.
All started to snow ball. The credit crisis is serious and must be addressed. That is why car companies are in trouble too ... people can't get loans to buy cars even if they want them unless they have perfect credit scores and history. Companies were having trouble borrowing which was causing plant shut downs, more layoffs, less demand.
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| Name: |
wix
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| Subject: |
Economic Downturn
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Date:
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12/18/2008 10:36:38 PM
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I have read that about 50% of the homes in repossession are investor owned by people caught trying to rent for awhile and then flip for a huge profit. They're upside down now so they just walk away.
Oil prices went crazy because of speculators. The only people who kept saying that it wasn't the speculators were the speculators and those selling the contracts. I hope they all were left holding the bag.
Also, read that many of the hedge funds will bite the dust soon. If we could get the manipulators out of the market everyone would be better off.
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| Name: |
water_watcher
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| Subject: |
Economic Downturn
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Date:
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12/19/2008 5:40:14 AM
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I don't want to debate you, but not sure where you are reading that about homes in foreclosure. I am sure that is partially true, but a small part. Right now 1 in 10 homes are in some stage of foreclosure. That is huge and not just home flippers.
I am actually a fan of hedge funds. They are not for everyone, but a good hedge fund helps investors based on market direction rather than having just long positions. What has changed is they eliminated the up tick rule ... if you don't know that is when they only allow someone to short a stock on a tick up rather than continuing to drive it down. Hedge funds did take advantage of this SEC rule change and it did take good stocks and drive their price in to the gutter with any bad news. They are talking about bringing back the up tick rule.
The other thing that is still a requirement but is not enforced by the existing SEC chief is the requirement to have an actual counter party to borrow the stock from in order to short a stock. Without that anyone can short a stock which can drive the price artificially low.
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