Friday, February 18, 2011

How is it Going ? Good or Bad....

It seems, however, that while there can be good and productive news on one front,
there always seems to be another front, where things are not always in sync. I am
becoming more accustomed to a mixed bag of news, that one area of our firm is progressing,
while another is not.

To a large extent, this has to do with the unevenness of how all of the markets we are in are recovering from this recession.
For example, in Las Vegas, I heard that over 50% of the homes that were purchased in the last 7 years, are worth less than their existing mortgage.
Think about that for a moment.
In the last few years one out of two homes in Las Vegas are worth less than what was paid for them.
All of the homeowners equity, or whatever money they put down to buy it, is gone today.

We used to talk about the wealth effect here in Southern California.
That is where people are employed, and if you want to work, you can find a decent job; where you have equity and a line of credit on your home, and everyone seems to have a newer car, clothes, vacations, new 3D televisions, Sony Playstations, etc, etc, etc.

Today, we hear that a lot of the country is recovering from the recession; the automakers recently awarded bonuses to all workers; manufacturing is up to record levels, as reported by
the Philadelphia Federal Reserve yesterday.....

Is this glass half full or half empty? It depends on where you live, but I will tell you this, as I have been in this position before where in California, where the bulk of our business is, is not doing as well as the other side of the country.
For that matter, the entire west is not up to the level of say, the eastern seaboard or even the great state of Texas.

Without California and the west doing better, this puts a hurting on us, as we are behind the curve.
Just last week, housing prices and sales dipped for the first time, out here in the west, since the uptrend.
Now fuel is going up like crazy and people are starting to talk about inflation.
That right there is the problem.

If the Fed uses interest rates to control inflation, then we are really screwed out here.
Why you ask ?
Because our wealth and economic activity is dependent on the housing market and its ancillary producers, from suppliers to craftsmen.
Construction is in the toilet, so is lending, and no one knows when this will change.

I am not predicting gloom and doom, as I believe that there are signs of progress and that it is
not as bad as it had been one year ago, but if you ask me, it is not all that much better, either.
Unemployment is still too high, crime is up no matter what they tell you, and with fuel jumping 15% overnight, you can see that Exxon and Chevron are still making money at our expense.
Who would have thought that what was good for the crooks in Iran would be good for our domestic oil firms, but every time oil goes up, they make record profits.
Either we need more hybrids or more oil, as no one wins with the approach we have today, except the oil companies.
Who would have thought.....

So we have to be determined to get better and forget about the government helping, as they always help the wrong people and they have no real ability to be efficient, since so many hands are always in their pockets, they have lost the ability to make anything happen on the ground that would benefit this local and statewide economy.

So, in a nutshell, it is up to us, to make this happen. And I believe it can be done, but only if
all of us focus correctly on the task at hand.
We have to go out and get the business today, and tell people why we are the best choice, to be the one who gets the work.
We have to communicate better, and we have to seize the moment, or someone else will.

So lets go get em and look back at this time with some reflection and lets start dominating
again. HOORAH

No comments:

Post a Comment