Is the economy affecting your hobby?

[j_garcia]

My dad has a 32" and I have a 34" screen, both 720p/1080i and the improvement is still quite noticeable with good Blu-ray discs (and HD-DVD).

 

[itschris]

I'm a financial analyst in the industry and one of the things we talk about all the time is the self fullfilling prophecy. There's old adage that "if a man absolutely believes he's going to die tomorrow, then he'll find a way to make it happen."

If you look closely at fundementals, there's little reason for any of this to be happening. Gas should be between $45 and $60 a barrel. It's not just the cost of gas that's caused the issue. It's how rapidly it took place. Most people didn't, couldn't or were just slow to adjust to the change in gas prices and the next thing you know, you're finances are impacted in a real way. Of course there's the "trickle through" effect that surges in fuel costs have. Everything begins to cost more because of the higher cost to get it to you.

A big problem now is the ethenol isssue and subsidies used to support it. It's causing farmers to switch from other staple crops to corn because the false gov't support makes it more profitable, yet it drives up prices on other farm output.

The housing market is another issue caused primarily by the ignorant homebuyer. That sounds harsh, but it unfortunately is very true for much of the issue. There's a guy in my neighborhood that's close to losing his house. He's an educated guy, and has an okay job. He's purchased a house in our neighborhood on a 3 year creep in only loan with a 12 month ramp up in the fourth year. He's talking to me and tells me that his mortgage payment is going from $790/month to $2,100/month. He acts complete shocked that his payment would be that high and that it's not fair. That just floors me. All he has to do is look around and see the houses that surround him. Why would you ever think in a million years that you could live in the neighborhood we do for less than the cost of decent apartment? I have little sympathy for that. Hell, between property taxes and home insurance, it costs us just over $10k a year before we ever put a penny into our mortgage.

If we would just let the markets sort themselves out naturally... and yes... that will cause a lot of short term suffering from some who made very very poor choices... things would cycle through as they always have. It's a hard thing to stomach, but it's the constant artificial security blankets we place on things that cause all of us to suffer.

If everyone keeps saying we're in recession, the economy's bad, etc, soon more and more will believe it, and they will stop spending as they normally would which only causes further contraction of the economy which of course starts the cycle over again and more people spend less and so on.

We get out of most recessions by spending our way out. At some point, everyone starts looking around asking themselves why they haven't bought that new tv, the dryer, the new car they need, the fancy purse or watch... and then magically... all becomes well again.

 

[Davemcc]

If you look closely at fundementals, there's little reason for any of this to be happening. Gas should be between $45 and $60 a barrel. It's not just the cost of gas that's caused the issue. It's how rapidly it took place. Most people didn't, couldn't or were just slow to adjust to the change in gas prices and the next thing you know, you're finances are impacted in a real way. Of course there's the "trickle through" effect that surges in fuel costs have. Everything begins to cost more because of the higher cost to get it to you.

I agree with everything you said. I highlight the quote above because being in the auto industry, the perception of the gas price issue has the very real possibility of putting me out of work. Personally, gas prices have had very little direct impact on me but it seems half of North America is panicked about the price of gas. It's that knee jerk reaction that I have to be concerned with.

 

[itschris]

I'll say it again, perception in 95% of reality. The biggest factor with the gas has been how sudden it ramped up. Most folks can and will accept the higher prices... just not that much that quick... and for no apparent reason.

You may be able to answer this being in the auto industry. I remember back when I was in high school, my friend's Honda CRX used to get almost 50mpg. Now when a car gets 35mpg, everyone seems to think that's a big deal. If we could do that 20 years ago, how come we can't do it now? Why are the fuel efficient cars getting less MPG than the cars of 2 decades ago? My first thought was emission controlls, but that can't be all of it.

 

[Davemcc]

You may be able to answer this being in the auto industry. I remember back when I was in high school, my friend's Honda CRX used to get almost 50mpg. Now when a car gets 35mpg, everyone seems to think that's a big deal. If we could do that 20 years ago, how come we can't do it now? Why are the fuel efficient cars getting less MPG than the cars of 2 decades ago? My first thought was emission controlls, but that can't be all of it.

Simply put, regulations. Even as the government demands higher and higher fuel economy, it is also forcing automakers to add equipment and weight. The platform architecture of an old CRX would never meet current crash test standards. Many viable platforms have been made obsolete due to these standards and their replacements are heavier right from the structure up, with heavier bumpers, crumple zones, side impact bars, etc. Since that old CRX, we now have such mandatory items as dual airbags, stability control on SUV's, daytime running lights (makes alternator draw more engine power) and likely hundreds of other regulations covering minute details that the average person would never consider.

Couple all the regulatory items to the increases in NVH standards (thicker glass, more acoustic insulation) and optional equipment, such as side curtain airbags, Nav systems and radios with XM/Sirius tuners and built in subs w/separate amps, power sliding doors and liftgates, power seats, windows, locks, mirrors and any other accessory you can imagine. It all adds weight.

This is not to mention the increasing performance demands of the consumer. Consumers want performance options and 250Hp family cars are not that uncommon any more, from the V6 Honda Accord or Chevy Malibu. 300-500Hp cars are not considered exotics anymore. People want their performance.

All things considered, when you consider the regulatory requirements, increased safety and quality standards, optional equipment and performance demands of the consumer it's a wonder that fuel economy standards are as high as they are. That 50MPG CRX couldn't meet modern regulatory standards, nor would modern consumers have chosen to purchase one, at least until the fuel price spike a couple of months ago when efficiency once again became a priority.

 

[ParadigmDawg]

Losing my job last year made me really rethink everything and I am trying not to spend as much money. The biggest issues are the fact that I like nice things and I get bored easily. I was lucky to end up with even a better job but the 7 months it took me to find it was an eye opener.

I find myself wanting a new AVR right now and I am struggling with the decsion which seems weird to me as in the past it would have been as simple as wanting something and going to the store right then and getting it.

 

[rnatalli]

The housing market is another issue caused primarily by the ignorant homebuyer. That sounds harsh, but it unfortunately is very true for much of the issue. There's a guy in my neighborhood that's close to losing his house. He's an educated guy, and has an okay job. He's purchased a house in our neighborhood on a 3 year creep in only loan with a 12 month ramp up in the fourth year. He's talking to me and tells me that his mortgage payment is going from $790/month to $2,100/month. He acts complete shocked that his payment would be that high and that it's not fair. That just floors me. All he has to do is look around and see the houses that surround him. Why would you ever think in a million years that you could live in the neighborhood we do for less than the cost of decent apartment? I have little sympathy for that. Hell, between property taxes and home insurance, it costs us just over $10k a year before we ever put a penny into our mortgage.

As a former I-Banker, I think your entire post is spot on. The two things that kill the markets are panic and greed.

I highlighted the above because it floors me as well how someone would sign a contract without reading it. Of course, the brokers share some of the blame as they offer ignorant (or brainwashed depending on your view) people the "American Dream." But I also have little sympathy as people need to learn to pay attention and take responsibility.

To answer the original question, the economy has not affecting my audio hobby.

 

[croseiv]

I'm certainly more nervous about spending in general compared to a year ago. hopefully things will improve by Christmas.

 

[Adam]

Well, I tried to do my part for the economy this week. I ordered a new computer yesterday. Not really an A/V purchase, but I did splurge and get a TV tuner - so it kinda is.

 

[itschris]

It's hard because when does compassion supersede what's right and wrong, or visa versa?

I don't want this guy to lose his house. He will, probably this month. On one hand I wish it didn't have to happen, but at the same time the cold hearted side of me says "that's what you get." I'd rather have bail out systems for people who deserve it... good hard working people who have expierienced some kind of tragedy or a loss of job due to layoffs. But even then, you need to be responsible and plan for these things.

I will freely admit that having been an Estate Planner and now an analyst, it's far easier to advise than it is to do. My wife and I should be more vigilant at times, but often times we just say "f" it and do it.

There's certainly a component to how life has changed since my parent's days that make it nearly impossible to compare my life, my profession, to the same just 10 years ago, let alone 20. I've been at my company for 8 years. 2-5 years earlier, most departments didn't have a single computer and others, just a few. No one had email, and no voicemail. In that short time, just 5 years, everyone had pc's and email. It changed everything. I do an expenential amount more work because of technology. If my CEO is in Washington, he can email and ask me for something and I'll drop what I'm doing and will breakdown or analyze or whatever something incredibly complicated in just a short while and forward it off to him. That was unheard of just 10 years except for the highest end, most technologically savvy companies.

So now, most of us are all doing a lot more in jobs. Gone are the 9 to 5 days where you truly leave your job when you step out the door. We live to work and work to live and it breeds a certain amount of discontent. We have to go out and buy things to make us happy, to help justify why we work so hard. We want more things, so we work harder, become more discontent, have to more things, and so on and so forth. Every now and then, that cycle has to break. We either do it ourselves, or it's done for us... maybe like it is now with fuel and other economic issues that we're facing.

The markets and our economy are driven by two things now more than ever... the global environment (events, politics, and economies) and perception and those two also feed off each other.

The other day Phil Grahm called Americans a bunch of whiners while talking about our economy. To a large degree, he's spot on. But at the same time, too many Americans are living far too fragile a balance between prosperity and insolvency.

As a former I-Banker, I think your entire post is spot on. The two things that kill the markets are panic and greed.

I highlighted the above because it floors me as well how someone would sign a contract without reading it. Of course, the brokers share some of the blame as they offer ignorant (or brainwashed depending on your view) people the "American Dream." But I also have little sympathy as people need to learn to pay attention and take responsibility.

To answer the original question, the economy has not affecting my audio hobby.

 

[Adam]

We have to go out and buy things to make us happy, to help justify why we work so hard.

Chris, very good post.

To address what I quoted above, some people do seem to take for granted that they must work and then go out and buy things to make them happy. I used to be the same way, but not anymore. Although I do get satisfaction out of my job, I don't like being financially committed to staying at it. So, I view a larger purchase (I'll say over $200) in terms of how many hours I'll have to work to buy it. For example, is a new car worth me spending 10 hours a day, five days a week away from my home and dog for nine months of my life? So far, the answer is no.

That paragraph is kinda clumsy. Hopefully the point came across.

 

[Matt34]

My household income as of a couple days ago is now a 1/3 of what it has been for the past 4 years, not because of the economy but to the wife having to quit her job earlier than expected due to some pregnancy complications. It was nothing too severe but the doc doesn't want her on her feet as much.

The military has came a long way as far as pay increases are concerned but even after 12yrs and a few promotions, supporting a family from a single source of income doesn't leave much for luxuries such as this.

Then again, I appreciate everything I have all the more every time I see how others merely try and survive in places like I'm at now. Be thankful for what you got, there are millions of others far worse than you or I will ever be.

 

[itschris]

I know exactly what you're saying. My brother is a prime example of what not to do. He never went to college, never learned a trade, never committed himself to learning or sticking to anything. He's a few years older than me, and at 42, he's had more jobs than I can count. He always blames bad luck, or bad circumstances, when in fact, it's been his poor choices in life that have put him where he's at. Despite all this, he still wants to be a big shot. He needed a new car. So what does he do? He buys a used Mercedes that he can't afford, but he goes around acting like Mr. Big Swinging D*ck.

The problem with my brother and so many others is that he has no idea how hard it is to be successful. He thinks I have it made and laments that everything comes easy to me. He never sees nor would he understand the effort, the responsibility, the accountability, that I have. I owned my first business when I was 13. I mowed 10 yards a week and even "hired" my brother because my parents made me. He was jealous. He did a fraction of the work I did, complained all the time, yet thought he should get the lion's share.

The problem we have is that there are far too many safety nets for poor choices borne from arrogance and ignorance. Whether it's Katrina victims using their Federal Debit Cards to buy Coach purses, to people like my brother who are always the victim, there's always an anchor the rest of us, that this country, has to pull along.

The contraction we're feeling in the economy was a long time coming. The housing market was a joke here in Florida just a few years ago. 30 year old 1100 sq ft houses in poor condition were selling for $200k when 5 years before you could have bought it for under $100k. My first condo I bought 10 years ago cost me $70K, that same condo, the exact one I lived in, was for sale $275K just 3 years ago. It was insane. Just like the technology stock bubble, it has to burst some time. Those who partake in the quick grab are usually the ones who suffer long term. The rest of us will just have to weather this short term. There's a lot of speculation that the oil prices will experience the same bursting bubble phenom that tech stocks and housing went through.

We just have to live a bit smarter right now.

Chris, very good post.

To address what I quoted above, some people do seem to take for granted that they must work and then go out and buy things to make them happy. I used to be the same way, but not anymore. Although I do get satisfaction out of my job, I don't like being financially committed to staying at it. So, I view a larger purchase (I'll say over $200) in terms of how many hours I'll have to work to buy it. For example, is a new car worth me spending 10 hours a day, five days a week away from my home and dog for nine months of my life? So far, the answer is no.

That paragraph is kinda clumsy. Hopefully the point came across.

 

[rnatalli]

We have to go out and buy things to make us happy, to help justify why we work so hard.

That's right out of Fight Club

 

[Buckeye_Nut]

The USA is virtually at full employment.

LOL...yea, we are in recession??...so the idiot talking heads say????

sheesh..

I'm cutting back on spending..
Just refurnished my movie room, and bought a new driver today.

Sheeh...idiots will believe anything they read these days!

the new stick..

The all new leather seating....

We are in Recession!! Only idiots believe the hype!!

 

[Buckeye_Nut]

Not to mention....

MY daily driver sedan has this engine.

I have no patience for whiny crybabies on the gas subject!!

 

[allargon]

I've generally been cheap when it comes to consumer electronics. I didn't buy a set-top DVD player until 2001 (or was it 2002?), and I paid $30 for a refurbed Mitsubishi. Only twice have I been foolish enough to pay too much--I bought a $500 Nokia slider phone in 1999, and I spent $300 on a HD DVD player last year when PS3's were still $700. I'm definitely not thinking about any high end or even midrange stuff right now. I love good sound and good video. I would bet that I have better hearing than most of the people on this site with tens or hundreds of thousands of dollars worth of equipment, but no way will I put myself in fiscal jeopardy for gadgets.

Ironically, I bought a Prius as my primary car a couple of years ago because I like being semi-environmentally conscious. Moreover, I thought I was going to sell real estate on the side. (We're showing under the hood shots, eh?)

Good to know our OSU fan can afford to spend money on gas and A/V equipment. I still have sympathy for working class people who just barely scraped by when gas was $2/gallon.

 

[billy p]

Ironically, I bought a Prius as my primary car a couple of years ago because I like being semi-environmentally conscious. Moreover, I thought I was going to sell real estate on the side. (We're showing under the hood shots, eh?)

Good to know our OSU fan can afford to spend money on gas and A/V equipment. I still have sympathy for working class people who just barely scraped by when gas was $2/gallon.

I sure love my Camry Hybrid, I get over 900km's per fill up. Heh.. with all the money we are saving on gas it sure makes things a bit easier in other areas.

 

[Sheep]

Not to mention....

MY daily driver sedan has this engine.

I have no patience for whiny crybabies on the gas subject!!

Is that a transmounted V8? Hlly understeer batman.

SheepStar

 

[audioman00]

I've generally been cheap when it comes to consumer electronics. I didn't buy a set-top DVD player until 2001 (or was it 2002?), and I paid $30 for a refurbed Mitsubishi. Only twice have I been foolish enough to pay too much--I bought a $500 Nokia slider phone in 1999, and I spent $300 on a HD DVD player last year when PS3's were still $700. I'm definitely not thinking about any high end or even midrange stuff right now. I love good sound and good video. I would bet that I have better hearing than most of the people on this site with tens or hundreds of thousands of dollars worth of equipment, but no way will I put myself in fiscal jeopardy for gadgets.

Ironically, I bought a Prius as my primary car a couple of years ago because I like being semi-environmentally conscious. Moreover, I thought I was going to sell real estate on the side. (We're showing under the hood shots, eh?)

Good to know our OSU fan can afford to spend money on gas and A/V equipment. I still have sympathy for working class people who just barely scraped by when gas was $2/gallon.

Is THAT the motor? or the tranny flipped upside down... geese I miss the old 305 v8 in my old firebird. But even the grand-am I own has something that looks more like a combustion engine. I dunno what the hell that thing is but, those cars are from the future or something. Nothing against your car, don't get me wrong in this post, but that does not look like an engine to me... crazy!