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Old 01-06-2009, 04:05   #31
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rigamarole

I agree wtih you 100 % and it will be interesting to watch the dow . The next 10 -15 business days should be interesting as I think things may go to H#ll in a hand basket pretty quickly now !

W
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Old 01-06-2009, 04:27   #32
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Deluxe, if one broker ignores you, that means he has another job to feed the family, just go to another broker. Put in low bids, someone needs your money more than they need their boat, a sad fact.

My nature loathes to 'screw' someone over but this economic time is the only way I can get a boat that normally would be out of my league.

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Old 01-06-2009, 08:12   #33
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I have a slightly different viewpoint to toss in. Not about the economy, I think we're done, but about boat sales. Some years ago, my wife's employer closed down. Wifey said sell the boat & I said no way. If we sold the boat, we would have been able to pay our mortgage for some number of months. Then what? Push the last of my belongings around in a shopping cart? Nope, I'll let them take the house & I'll live on the boat I own.

It worked out fine & Wifey got a better job, but my viewpoint hasn't changed. If your boat is paid off, keep it. Isn't it better to be "floating homeless" than just plain homeless?
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Old 01-06-2009, 14:54   #34
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The minor point is that the Chinese are not "afraid" to buy American Treasuries, now - they buy them all the time. But they no longer are buying long-dated bonds. They, and the rest of the world for that matter, have come to the conclusion that that is a sucker's bet.
An aside: That is not a minor point. It's a paradigm shift that, if continued and developed, spells big time trouble for the future of U.S. debt financing.

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That is why the Fed had to step into the markets and buy US Government debt in mid-March of this year - an event I referred to as The Black Swan - Part 2 in an earlier thread.
Linky please. Where is this other thread? TIA.

P.S. The sky is not falling unless the Chinese and Japanese say it is.
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Old 01-06-2009, 15:04   #35
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Well, my "minor" point was that the Chinese are not afraid. As you've observed, John, they hold the hammer these days and it is those in debt to the Chinese who should be very, very afraid. That the Chinese have shortened up on the yield curve is, as you noted, hugely significant. Their abandonment of the long end of the curve is what forced the Fed to buy the suddenly undesirable long-dated Treasuries. My previous thread on this is The Black Swan (part two).

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Old 01-06-2009, 15:26   #36
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Well, my "minor" point was that the Chinese are not afraid. As you've observed, John, they hold the hammer these days and it is those in debt to the Chinese who should be very, very afraid.
What should scare the US Fed is the Chinese mutterings earlier this year about a World Currency. I was surprised to learn their is already one in place - just not used / issued much since the 1970's. Sort of like the ECU (European Currency Unit - precursor to the Euro) weighted against each country......but b#ggered if I can recall it's exceedingly dull name or whether their have been any further Chinese muttterings on the subject.


PS, back on topic A good boat will always sell at a good price. Mine will easily fetch what I paid for her 4 years ago. Shame about inflation in the meantime. and the 50% of cash I have lavished on her.......but I don't care - she's not for sale
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Old 01-06-2009, 16:18   #37
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Quote:
Originally Posted by keelbolts View Post
I have a slightly different viewpoint to toss in. Not about the economy, I think we're done, but about boat sales. Some years ago, my wife's employer closed down. Wifey said sell the boat & I said no way. If we sold the boat, we would have been able to pay our mortgage for some number of months. Then what? Push the last of my belongings around in a shopping cart? Nope, I'll let them take the house & I'll live on the boat I own.

It worked out fine & Wifey got a better job, but my viewpoint hasn't changed. If your boat is paid off, keep it. Isn't it better to be "floating homeless" than just plain homeless?
Keelbolts, I love your attitude, I'd choose a boat over a house anyday too.....Allan
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Old 01-06-2009, 16:33   #38
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TaoJaones,

If you were the Chinese or the Japanese, what would you do? Where would you park your export proceeds?

As to the Japanese, I don't know. But I've been warning people to watch out if the Chinese ever decide to use government policies to build a middle class so that domestic purchasing can (someday) substitute roughly for current N. American purchasing.

I've seen several weekly periodicals run prominent articles (Time, etc.,) noting that the Chinese government is starting to do precisely that. It knows it must stimulate domestic demand.

The sky is not falling, but it sure is starting to rain hard.

Thanks for the heads up. I have not been paying attention to the U.S. government debt markets, and was not aware that the long-term side of things had collapsed--and so quickly.

I think our fate is tied up with three major issues: One, how do exporters store their dollar proceeds in something other than dollar denominated assets. (Hello hard assets, mines, minerals, commodities, non-U.S. real estate, etc., etc.)? Two, how, when, and what replaces the Dollar as the world reserve currency?

Should the major exporters figure out these two issues, then the U.S.'s status as a superpower will sink under the weight of its own debt burden without a single shot being fired.

But I'm more pestimestic than that. The third issue is energy pricing. World oil production figures according to U.S. DOE:

2009 71,753 (two month average)
2008 73,777
2007 73,223
2006 73,546
2005 73,791
2004 72,512
2003 69,448
2002 67,168

( x 1,000 barrels per day)
http://www.eia.doe.gov/emeu/ipsr/t11d.xls

World oil production peaked in 2005.

Should the economy in China and India recover, even if the U.S.'s economy doesn't, oil prices will spike with any sort of renewed demand. Supply is inelastic at this point (a first in world history).

Between being (1) broke and (2) the most oil dependent country in the world, I am not optimistic. Our current national lifestyle is simply not sustainable. Quite the opposite. The macroeconomic picture allows no other conclusion.

The next few decades will be spent finding out what happens when you pull money out of the U.S. economy in the form of record breaking debt (after the world decides to stop financing it) and a never ending cycle of energy cost increases. It will not be a pretty sight.

And I agree with you that hyperinflation is one possibility. Deflation is another.

Or both at the same time. Private goods and services falling in price, while money is maintained in oversupply on account of government debt.
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Old 01-06-2009, 17:45   #39
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One final comment.

When I say the U.S. is the most oil dependent country in the world, I am noting that, not only is the U.S. the world's largest importer of oil, it is also the third largest producer of oil in the world--surpassed barely by Saudi Arabia and Russia. Most people don't know that the U.S. is the third largest oil producing county in the world, and that countries like Venesuela and Mexico produce less than 1/2 of U.S. output.

Despite being one of the largest oil producers in the world, we are also the largest importer.

With one hundred years of ever increasing world oil production having come to a recent end, and U.S. oil production having been falling since the early 1970s, the U.S.'s energy situation is . . . um . . . interesting. We are not really ready for what is about to unfold.
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Old 01-06-2009, 20:48   #40
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Quote:
Will the end of July San Diego boat show be the right time to pull the trigger?
There is no point in the future that is specific. Higher priced boats are a luxury item. Historically the companies may go belly up but that means there may be a couple of boats that sit in bankruptcy before sold at auction. I'm talking one or two per company. Those are the few boats that can be had for a deal , but with no warranty. The cost of building a boat has not decreased a bit. In a global sense boat prices are something less than nothing in real global economics. The world markets won't move because boat prices go up or down. Boats make up so many sectors that it tends to mirror the problems better.

In a population as a percentage basis no one can afford a boat in the past, present, or future. At the high end of the market boat prices see no price movement at all. In used boats the quality boats are being pulled rather than selling at a huge loss. That said, there can be deals to be had but there is no basic rule that says you can personally find one because you want one. You need to look everywhere. At some price someone will buy it at some price. One boat sale is not the whole market. It's been that way for many years you have to go out and find the better boats at the better prices. On new boats the prices will be good if you can find one now. No boat builder will over build to take a loss on purpose. Boats don't make that high a profit margin. For new boats I doubt there will be any deals left soon. The builders won't build if they know they can't sell them. Most have cut back a long time ago. The only really soft areas are folks that paid too much or financed too much and lost jobs. Those boats will sell cheap and given the poor maintenance they got are maybe only worth what the buyers actually pay.

The market generally evens itself out quickly. Boats that would have sold around $50,000 may still be a good deal but not a great deal. The risk on them is also higher than normal as well. High risk sounds good until you own one. You still do the homework and you still do the survey and watch your money. That part has always been like that. There are no new rules for spending big money on boats.
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Old 01-06-2009, 21:19   #41
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A high end cruising sailboat builder I know says that he sells more sailboats in a recession (he's at close to capacity right now). His theory is that the guys who can buy a new boat from him are too busy making money during the good times. They're also the same guys who get their money out of the market just before the recession and want a boat to go sailing for a few years.

Cripes - more evidence that I'm not so smart

Perhaps we are entering a boom time for the sailboat market. After years rocking in big SeaRay wakes, perhaps sail will be cool again. And cruising sailboats aren't that expensive. Look what $250,000 will buy in a cruising sailboat compared with buying a house with waterfront. Well, OK, the house has land too but you get my point.

I agree that there are a lot of reasons to worry about the US and the world economies over the next few years. But I remember the late 70's and early '80s. That sucked too. My first house mortgage was at 18%.

It will pass. Let's go sailing for a few years.

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Old 01-06-2009, 21:25   #42
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Why should the Chinese be afraid. They are using US $ to buy commercial metals. Not a bad ploy, prices are down and they need metals for internal consumption. They have been very heavy buyers since 9-08.

If you want a boat and plan on buying with $, buy in the not too distant future, the greenback ain't what it once was. Inflation is gonna take a bite out of those that hold.

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Well, my "minor" point was that the Chinese are not afraid. As you've observed, John, they hold the hammer these days and it is those in debt to the Chinese who should be very, very afraid. That the Chinese have shortened up on the yield curve is, as you noted, hugely significant. Their abandonment of the long end of the curve is what forced the Fed to buy the suddenly undesirable long-dated Treasuries. My previous thread on this is The Black Swan (part two).

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Old 02-06-2009, 10:07   #43
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I don't know that is true about luxury item prices. The recession in the 80's under Bush senior saw aircraft and boats losing very little.
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Old 02-06-2009, 10:21   #44
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While "typical" recessions "typically" don't have much of an impact on those in the upper crust, this is no typical recession. This story Frugality turns fashionable as recession hits the wealthy - Los Angeles Times in today's Los Angeles Times is a case in point. It's worth noting, though, that expensive yachts aren't your ordinary retail product, and that is a tiny market in any event, even in the best of economic times.

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Old 02-06-2009, 11:22   #45
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Here's something on Jets:
Recession grinds away at business jet orders

And here's something on Luxury Boats:
Sleeping bears: slump reaches superyacht segment
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