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Car Forum / Lexus Cars / May 2008RECESSION HITS the WEALTHY! More Economic Slowdown Predicted for Midyear!
You know things are getting worse during Bush's recession when the nation's semi-upper-crust puts off buying their Lexus and Mercedes luxury cars. It seems The RECESSION is not just for we "little people" anymore. ----------------------- "BUSINESS BRIEFING" AUTOMOTIVE Lexus, Mercedes Sales Fall in U.S. U.S. sales of luxury auto brands including Toyota Motor's Lexus and Daimler's Mercedes-Benz fell in April, adding to evidence that the economic slowdown is causing even wealthy buyers to curb spending. Sales by automakers' luxury divisions -- broadly defined by analysts as those selling autos for $40,000 aimed at the most-affluent consumers -- dropped 13 percent from a year earlier, according to Autodata. That outpaced the 8.9 percent decline in sales of all vehicles. The results reflect the run-up in gasoline prices, dropping real estate values and tighter credit that forecasters said may halt economic growth by midyear. Sagging stock markets and shrinking bonuses may also be weighing on premium-brand buyers, Autodata said. http://www.washingtonpost.com/wp-dyn/content/article/2008/05/02/AR2008040203660.html Well, guess the BUSH RECESSION has no end in sight. > Well, guess the BUSH RECESSION has no end in sight. It does give all sorts of investment opportunities in alternative energy situations. -- Ron > You know things are getting worse during Bush's recession when the > nation's semi-upper-crust puts off buying their Lexus and Mercedes [quoted text clipped - 25 lines] > > http://www.washingtonpost.com/wp-dyn/content/article/2008/05/02/AR200... This is an example of deflation. Credit has been restricted. The people who would have borrowed thousands of dollars to buy a new motor car can not get finance. So sales of motor cars are down. People who were relying on credit for day to day expenses can have big problems when credit is restricted. Often they are forced to sell assets to meet living expenses. When many people want to sell and few have the means to buy prices fall. Cash becomes king. >People who were relying on credit for day to day expenses can have big >problems when credit is restricted. Often they are forced to sell >assets to meet living expenses. When many people want to sell and few >have the means to buy prices fall. Cash becomes king. Raiding the 401(k) Monday, May 05, 2008 | 05:30 PM in Economy | Investing | Markets | Psychology/Sentiment Wow, I found this shocking: "Borrowing from retirement plans is surging. At the end of last year, 18% of workers had loans outstanding from their plans, up from 11% in 2006, according to a survey of 2,011 full-time employees released in February by the Transamerica Center for Retirement Studies, a nonprofit corporation funded by Aegon NV's Transamerica Life Insurance Co. With home prices falling nationwide, the loans may be a sign that cash-strapped consumers are raiding their nest eggs to stay afloat, no longer able to tap their houses for cash and up against their credit-card limits . . . Last year, 52% of workers with annual incomes of $50,000 to $100,000 said they planned to rely primarily on 401(k) plans and IRAs to pay for living expenses in retirement, up from 46% in 2006, according to the Transamerica survey. The percentage counting on Social Security also increased, to 19% from 13%, while those counting on a company-funded pension plan dropped to 11% from 18%." Sounds bullish to me . . . Source: Raiding the 401(k) Nest Egg JENNIFER LEVITZ WSJ, May 5, 2008; Page R1 http://online.wsj.com/article/SB120994246231866045.html > Lexus, Mercedes Sales Fall in U.S. > > U.S. sales of luxury auto brands including Toyota Motor's Lexus and > Daimler's Mercedes-Benz fell in April, adding to evidence that the > economic slowdown is causing even wealthy buyers to curb spending. No. Many buyers of BMWs, BENZ, and Lexus the last few years have been very middle class people who bought those cars using HELOC money or easy finance money. They made these dumb financial moves so that they could impress people they never even spoke to. Now that the easy credit is gone, people have to live within their means. I doubt that the "wealthy" will be curbing their spending any time soon. The Washington Post writer should have known that. There is wealthy and there is wealthy. >> Lexus, Mercedes Sales Fall in U.S. >> [quoted text clipped - 9 lines] > will be curbing their spending any time soon. The Washington Post writer > should have known that. Why would tight credit restrict the sale of luxury vehicles? Don't most such vehicles get paid for in cash? I guess I balance my own checkbooks yet and I find that automatic deduction for stuff is just too distracting, so why do it? Sure you can make more investing with your money than what it costs in interest, but it is just such a pain filling out all the forms and stuff. Same thing for leasing - just a big tax shuffle which ends up costing you money due to the interest and higher accounting costs, etc.
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