Friday, March 4, 2011

Good Times A Head...

Today I read a blog that those of us in the transportation industry, should be concerned
about what we are going to do with all of the business we are going to have and get in the
coming moving season, or spring and fall.

By analogy, some "experts" are looking at the January numbers for interstate moving and shipping, and seeing an increase, year over year, for the number of shipments, miles driven, orders trending up, etc.

At the same time, since anyone who was honest enough to admit that they lost sales by a significant amount (40% annual declines--it was more for some but who wants to admit that their self made company only produced half as much business as it did in years past.....

We are so smart.....I see even Macy's scored big with this year's sales, compared to the same period, last year.......and that Home Depot is bouncing back and of course, our favorite, Apple
Nuts or Apple is thriving, with their young adult toys for spoiled children.....who need one more item from the genius, Steve Jobs....

However, what is everyone going to say when the February results come in and they disappoint,
so I guess the glass is half full now, not half empty. Bottom line, we are comparing our current
results against the worst results we have had, and if we matched those crappy results from
about a year ago, we would all not be here to write about how great things are going to be.

So this makes me a pessimist, I guess, not because I want to be, but because I do not see the
fundamental changes going on that would allow for meaningful and sustained growth. Let me

Within the last 90 days, how much has changed. In terms of auto sales, the domestic firms like
GM, Ford and to a lesser extent, Chrysler--all about to go out of business at several points in the
last two years, are now flourishing with sales, profits and yes, bonuses to management and to the
rank and file workers--and better yet, more plants are opening and more workers are going back to the assembly lines. Great news, how come?

As far as housing goes, in a market like southern California, what do we see in the last 60 days.
Remember, we do not make anything here like cars, boats, planes or military equipment here in California anymore.....we just have more lawyers and accountants and bullshitters than any other state in this country........and Hollywood........who sell less tickets every year, but raise prices to keep their status quo or mediocrity going...back to housing....

We have had the worst 60-90 days for housing sales and production in the last 2.5 years. Again,
I repeat, that January housing sales were lower than they were the year before. Sales are
down and yes, prices, per square foot, are down, too. First time in over 18 months. These are
statistics. But no one is talking about it. If they are, it is the "lull before the storm."

The car companies, lowered their credit requirements for car loans, about 75 days ago. Making more people able to get a better loan, middle of the road customers with less than decent credit,
now can drive home in a car, but maybe it is used. In other words, they took on some risk,
as they should. They adjusted their models and made changes to their business, in order to grow.

Housing--there are less lenders today, about 75% less mortgage brokers than their were three
years ago and the banks will not bend, nor will they write new mortgages that include any risk at all. Funny, they were throwing themselves are the same people they will turn down today, only
3 years ago, giving people homes for their signatures, based on 100% financing and in some cases, 110% of the price, so they got a bonus for moving in.

The banks lost a lot and quite frankly, so did a lot of other people, but if they will not loan, forget
about recovery, forget about growth, forget about new homes, forget about it all, as anyone who
has lived in California knows that without a housing recovery, their can be no way to prosperity for most of us, especially those whose business, like moving, is directly intertwined with the housing industry.

We are all looking for work, more than normal, as I do not see any firm close to operating capacity, nor do I feel emboldened, as interest rates for homes are historically low, as I recall
a former housing frenzy here in California, where people were tripping over themselves to get a home loan, adjustable, at 8% APR, back in 1990. There were bidding wars.

To illustrate, I saw a home, a fixer, in a good neighborhood, with expensive homes neighboring it. The home needed work, but it remained for sale for over 6 months. I met the realtor recently, who told me that even though appraisals were good, and that three couples qualified for the loan and had over 25% down payments, no bank would loan on it, since the house needed
a new roof (8-10K) and some pool repair (3K), no bank would loan on it. No matter what.

The home sold to someone who put together a 100% cash sale.

If this is the only way to get a loan--not to get one, but to have a rich family who will give you the money, we are all going nowhere fast.

I wish and I hope that I am just skewed the wrong way, as we have suffered long and hard and I am still not clear what we did to deserve it. At the same time, we are invested and we believe that the way to the promised land is the way we have always followed, and that is by delivering
unequaled service and a complete commitment to customer satisfaction.

I still try to help every customer I can, and many tell me I am naive and a dreamer, but the truth is that this is the only way I know and it has not worked all that well in the last few years, but I am not quitting or giving up now or ever. I am in for the duration and I hope that my take on all of this is just wrong.

No comments:

Post a Comment