I keep hearing and reading depictions of our economy that do not correlate with or represent the economy I observe from many different data points. I hear this here, in postings in this forum, I read it in newspapers, I hear it on television. I read an editorial this morning that says there are ominous signs of a full-blown depression including ". . . an ever-accelerating rate of unemployment and home foreclosures, a credit freeze that touches everyone from major manufacturers to ordinary consumers, the accordionlike contraction of businesses from automobile plants in Detroit to software makers in Silicon Valley."
I'm not seeing this. Maybe I'm reading too broadly and not precisely. An acceleration is a rate of change of a rate of change. Thus, this guy's statement may be correct if the unemployment rate was going up at a rate of 0.01% per year to a rate of 0.1% per year. Similarly with foreclosures. Last I heard, unemployment hovered around 6%. Not the end of the universe as we know it, in my estimation.
Maybe these are "forward looking statements which may or may not be actualized in the future." This is the escape clause officers of corporations are obligated to couple with any statements they make about what is not NOW but may be in the future, to avoid being sued because so often these prognostications end up being nothing but hot air, misleading, and, worse and to the point, transparent attempts to manipulate and steer public opinion where these spokespeople want that public opinion to go.
A friend works as a car salesman. Youcan imagine that he is vitally interested in credit availability and joblessness. He says his company still offers the same credit terms as formerly, but the local media are saying credit is frozen. He has seen a steep drop off in sales, but he thinks this may be due as much to the media broadcasting that there is no credit available. NOT TRUE!!! Of course, it seems likely to me that some folks are understandably taking a "wait and see" attitude before making a major purchase. But the point is SOME people are no doubt turned away by the negative and false information that credit is frozen. "Credit is frozen" may be a "forward looking statement" of what may be in the future, but it is not actually realized today.
Are these guys painting the end of the world pictures simply because they are the same kind of people who hid under the covers and trembled afraid of the boogy man as children or are they trying to manipulate us like the CEO who says he expects sales to move smartlyupwards in the 2nd quarter while he is dumping his stock options now, in the 1st quarter? Are the media trying to manipulate opinion to nudge the election towards Obama and the Democrats, on the presumption that all economic bad news is stuck to the party in the presidency?
I'm not seeing it here either, but I am not trying to borrow either. I do see alot of new repos at the local bank, but thats it. Our CEO(telecommunication)says we are good, we were not based on the stock price but rather ours is that income is more, than expenditures. The credit thing will only stop us doing mergers.
But I have heard that US lost 155,000 jobs last quarter or something on FOX or another. And I heard the bottom of the realestate market wont get here till 2010.
I just refinanced my house and that costs way more than a car. Credit may be tight but it is still there. The media appears to simply hype things to sell advertising and does not ever seem to be interested in calming any situation or presenting just the facts. In many issues (like the bailout, etc.), the media appears to have no clue or understanding about the true facts or meaning of the issue.
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As for auto sales, they seem to be way down in my and the surrounding area and has been for months. But I believe most of that to be due to higher oil prices and people holding onto their money and keeping their older vehicles. Even used car sales.......well lots of the used cars sold have come from auctions. We will see if the effects trickle down to the smaller hometown or regional banks. They don't generally have anything to do with subprime loans.
Al...my brother sells for a large Ford dealer. Said sales are slow..but when someone does come in to buy not much has really changed. The good FICO's get their ride as well as a good rate. He said the only real thing he has seen a change in is the special financing...which IMO is half of the reason the country is in the shape its in. Loaning to people who cant afford to repay....
What it boils down to is the good risks can still get loans and they have slowed down on the bad risks...which is actually a no brainer no matter what the economy is doing.
"Forward looking statements . . . "
