On Tue, 1 Jan 2008 22:59:52 -0800 (PST), Chuck Gould
wrote:

On Jan 1, 4:31?am, "Eisboch" wrote:
Having a small company that is involved in large, capital equipment type
contracts has certain advantages. ?One of them, that I noticed years ago, is
that the level of new orders almost always reflects an accurate prediction
of which way the general economy was heading, usually about 6 months before
it became a current topic of discussion in the media.

Last year my former company (now my oldest son's) had a tough year with a
major slowdown in new order activity and, in some cases, cancellation or
postponement of planned orders by several customers. ?The situation was not
unique to the company as many others involved in similar, high cost capital
equipment businesses experienced the same slowdown.

This has all changed. ?In the past 30 days the company has received over $6M
in new contracts and the quoting activity for more has picked up
substantially. ?If this continues, and past history says it will, 2008 will
be a very busy year. ?I'll betcha that by May or June all the talk will be
about how robust the US economy is.

Eisboch

Well let's hope so.

Boat sales in the Pacific NW, measured in units, were off 17% 3Q07 vs.
3Q06. The Marine Trade association tired to put a bright spin on the
numbers, noting that the dollar volume of the sales was actually 1%
higher than last year. The dollar volume is less meaningful, as boats
that sell for more money also cost more money, and a 17% dip in volume
is going to wipe out a lot more gross profit than a 1% increase in
total sales dollars will restore.

The higher total dollar volume coupled with the 17% dip in unit sales
reflects the fact that Wally Lunchbucket is a lot more woried about
his job, his budget, the cost of fuel, and so forth than is Daddy
Warbucks.
I sense very little slowdown in the $500k and up market (not that it's
ever a beehive of activity).......but a lot of the small, trailer boat
guys selling new boats for under $100k are singing the blues.

Let's see what happens this spring. The economy is cyclical,
regardless of which political party is in power. Every so often it
slows down, and all the marginal operators who are so inefficient that
they are barely making it when things are booming get weeded out by
reality.
That's probably a good thing in the long run.

I do pity the poor FED. What a quandry. So much of the stuff we buy to
day is imported that low interest rates *really* fuel inflation. Not
only do people borrow for more consumer spending, but the low rates
depress the US dollar on the exchanges and as a result the prices for
almost everything go up. Raise the rates to shore up the dollar, and
while prices will not be driven up as quickly by a weak foreign
exchange our less-than-robust economy can hardly afford a slow down in
consumer spending due to higher monthly payments.

What do you think increasing taxes will do to our 'less than robust'
economy, Chuck?
--

JohnH

"Opa of 6"