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Ah, nothing like living beyond your means...
Nice shout out to our favorite blog too, but somehow I think maybe he didn't actually read it...
It was a risk, a calculated risk."
Fantastic rationalization. Makes it sound like he was investing in T-bills or something, using the house and condo as an alternative to his 401k plan.
My thought is that when you repossess a boat in these economic times, you are now the proud owner of an underwater asset, unfortunately not a submarine (which would really be cool).
Is there a large market for these repo'd boats? Any market?
I have a friend that has been in the auto Repo business for many years, received the business from his father.
This is in the San Francisco Bay area.
Recently added two trucks, rented additonal warehousing space (two) and is currently working 7 days a week due to the increasing backlog. Their business has never has this kind of backlog.
Two of the happiest days in a man's life: The day he buys his boat and the day sells it. (A repo would not be as happy as a sale.)
No hat tip for
Angry Renter.com | Homepage | 05.19.08 - 9:02 pm | #
???
Ah well. I'll give him a seven gun salute, foreign diplomat if I recall my Horatio Hornblower correctly.
A typical two-stroke outboard motor gets between 1 and 2 miles per gallon, depending on boat size, waves, etc. An afternoon of tooling around the lake will set you back about $150-200 in gas alone.
You'd save a lot of money going to the OTB instead.
Big boat really take a beating in a sharp downturn. With fuel prices where they are now I don't know where the floor is. My father's buddy stole a late model $500k 48' Hatteras in the late '80s for $300k. He let it go 5 years later for $95k. Looks like a repeat.
"Prosperity was assisted, too, by ... stimulants to purchasing, each of which mortgaged the future but kept the factories roaring while it was being injected ... People were getting to consider it old-fashioned to limit their purchases to the amount of their cash balance; the thing to do was to 'exercise their credit' ... 15% of all retail sales were on an installment basis ...It was fun while it lasted."
Only Yesterday, an informal history of the 1920's, F.L.Allen (published 1931).
sdtfs - in the chattel continuum, boats are at the extreme tail on the 'sucks to repo' end of the curve.
That said, one of the biggest boosts in my career was largely thanks to my finding a guy who was good at reselling repo'd boats. I was a hero thanks to making that connection.
Seems to me that some of the businesses that will do well in the next few years will be businesses that take away the excesses of the past, whether voluntary like pawn shops or involuntary like the repo man.
I imagine some attorneys should do well also, except for those whose practice was mostly dedicated to real estate closings.
Mechanics shops may prosper as many people try to upkeep their older cars rather than spend money on new. Perhaps used car sales may pick up as a cheaper alternative plus there will be a great inventory selection.
You see, there is always a silver lining. What's all the fuss about?
But see, "Boston Yacht Sales of Weymouth last week closed on 3 boats valued at a total of 1.6 million, helping push business up by 9% over last year . . ." For the wealthy, life is full of "bargains" right now--
Help - Page Not Found - Boston.com _bargains/
Fun stuff.
I took it before, Ill take it again. After I take it a few more times, hell be eligible for a Christmas card. One guy, I took his boat four times.
No one grows up aspiring to be a repo man. Mr. Henderson got out of the Army in 1989, another year when the economy was uneasy. Unable to find a job in law enforcement, he followed a friends recommendation into the repossession business. When he meets strangers and they ask what he does, he merely says he is in the marine industry. He has repossessed the boats of friends and one relative, a cousin. Somebodys got to do it, he said. Might as well be me.
Robert Dahmen, a lanky 49-year-old, was peaceful, even apologetic. He wanted to salvage whatever he could off the boat, and offered in return to detail its history to any possible buyers. Mr. Henderson was polite but distant. Hard-luck stories have ceased to interest him.
Fun read... WWF used to have a wrestler called the 'Repo Man'... maybe he'll make a comeback in the ring... I guess I should've invested in the Repo business... maybe I can start a chain... Repo R 'Us?
The businesses set for a high probabilty of failure:
Any business that requires people to spend money and they can do without.
Food and energy should survive.
It was a risk, a calculated risk. I obviously lost.
Why not ask to see his calculations?
Once again, we can all ask: "Where are the real reporters?"
.
doom,
I wonder how businesses that sell "status" will do?
It's an interesting question, really. I mean, obviously it'll be harder for people who can't really afford these things to stretch for them. But in addition, it might also become embarrassing to flaunt a showy lifestyle when people are losing their homes and having trouble affording food and heating bills...
It was a risk, a calculated risk.
Oh yes it was, and it was a great blog.
What a Piker!!!
I tease my BIL about his boat. He is near retirement age but keeps working. I asked him why and he said since he bought to old family fishing boat to fix up he had to work for a couple more years to keep the boat and still have funds to live on. His boat burn is 60K a year. And I thought having horses is exensive.
We are doing our part to keep the American dream alive.
sdtfs, having spent two years on a submarine, I can tell you, yes, they are cool. But, the upkeep on that nuclear reactor, it is a bit much. And, have you checked out the cost of replacement torpedoes and cruise missles; omigosh!
I'm with doom; once this downturn gets going, given the huge household debt overhang, discretionary spending is going to dry up big time. A book that I read last year was 'Middle Class Life During the Depression'; very basic and frugal. Okay with me.
The only good, sustainable growth business that I see is alternative-to-gasoline/diesel: when the dollar crashes, oil is going to be horrendously expensive here in the states.
I look forward to buying a nice used Alerion Express 28 in five years or so.
http://www.alerionexp.com/gallery28/28-03.jpg
Until then, we enjoy our Sunfish and Montgomery 15.
You can't see me but my eyes are welling up. An important piece of legislation that passed a few years ago in CA is that there is no sales tax on boats. These guys had it coming good news is that the state saw no benefit from this "boom"
I'm out like a light. Goodnight
"it might also become embarrassing to flaunt a showy lifestyle when people are losing their homes and having trouble affording food and heating bills..."
ShortCourage
You know, I never even thought of that angle. But you may be right.
I think those industries are in big trouble regardless because they were prospering from the can do's and the "wanna-be" can do's. Many can do's still exist but the wanna be's are in big trouble and they were a huge demographic.
When houses enjoy the same reputation as boats we'll be at the bottom.
Muito interessante seu blog,
mas poderia possuir um translate para diversas linguas. Este recurso possui no meu:
Os bosques
Brasil!
Not only is it embarrassing to flaunt a high roller lifestyle during times of economic hardship it may be downright dangerous. Some may resent those who are more "fortunate" or who benefited from the bailouts.
RV's are enjoying the same fate as boats. Especially class C (the big ones). Many get single digit miles per gallon and they are meant for traveling around.
GE's financing unit stopped providing financing for them just recently. The credit crunch is crushing that industry.
OT: Nick Von Hoffmann dovetails his new financial lexicon with the brio of Tanta.
A cynics glossary of CNBC BS....
A Devil's Dictionary of Finance
I can sleep easier now...
Rob Dawg- Glad to see you back. I hope everything came out okay,.. I'll check your blog!
OT
Here is your decoupling!
"While Formica's initial trading and operational results have been disappointing, and conditions in the USA market in particular are tougher than the acquisition assumptions, directors are still confident the synergies and improvements identified on acquisition will be achieved," the company said in a statement.
Middle of last year NZ biggest building supply manufacturer buys formica, I know its not granite, but is a good lesson in how bad assumptions were and how far the rest of the world will have to ratchet down production in the face of a US recession.
On another note 10,000 people are directly employed in boat manufacture in NZ our major export market is, you guessed it, USA.
Decouple that...
Fletcher Building shares take a pounding after profit forecast - Business - NZ Herald News
I oversaturated myself with long-term debt
Talk about an inelegant turn of phrase.
Also, I think "Calculated Risk" would be an amusing boat name. If I ever get rich from all the information here, we'll see...
The NZ coupling is interesting because when housing demand ever gets going again the technology will favor more of the value added be overseas.
Also, I think "Calculated Risk" would be an amusing boat name.
Already ran across that one.
Ah, nothing like living beyond your means...
Since that describes the whole USofA, can there be any doubt we're headed for a depression?
From now on, Mr. Dahmen said, the consumer economy would have to get by without him.
'nuf said.
Rob:
We have a similar problem to the US, we are sending our manufacturing base to China too. If we get hit hard, it may be the end of critical mass in manufacturing in NZ.
The next time someone floats decoupling, send em my way. Low USD is causing exporters to hurt, lowering US demand slowing production. A good friend in a manufacturing co, tells me they are very quiet but bosses want to hold out before making staff redundant (pink slip).
The buggers bought formica in May 07 for USD700 million, at the absolute toppy top of the market and based on future earnings, sigh!
OT
How about the IMF, I don't recall them handing out the advise so freely in the past!
The International Monetary Fund today urged New Zealand to keep monetary policy on hold until there is clarity over where the economy is headed, amid rising inflation and global credit market woes.
NZ Herald: New Zealand's Latest News, Business, Sport, Weather, Travel, Technology, Entertainment, Politics, Finance, Health, Environment and Science
My dad told me that back when Seattle was the Boeing "company town" you could judge the company's fortunes by the number of boats in the classifieds.
ShortCourage,
Did you see that Mish link I posted yesterday?
My BOAT! Not my BOAT! I NEED my boat!
Interesting situation....the worst problems are boats that have gone over 10 years old. They are not eligible for financing. That's the reason there are so many 15+ year old boats that have been listed for (really) over 5 years! Many of the high financed boats went over the "10" during the 15 year loan, that has 10 years left! I was SOOOO lucky to get a cash buyer and bail out (it helped that the boat was paid for).
The "over 10" condition has led to many donations, after slip fees have finally wiped you out. As the above decks and cockpit stuff degrade, osmotic blisters grow, and the engine blocks corrode, the boats go to donation and scrap. They wear good masks as the chain saw makes the boat into small pieces that fit into a dumpster.
doom is right about motorhomes (note that the Class A are the big ones, and the smaller Class B and C have the "van" front end). I have a friend who's upside down in a diesel pusher...and with the price of diesel, there is no hope for a sale. Unfortunately for repo man, he's keeping the fuel tank empty. That is REALLY going to hurt whoever has to transport it!
A word of warning to those thinking "deal" on a diesel pusher....when the Allison trans hasn't been run in a year, the seals won't lock and clutch packs will not engage. The engine fires, the shift lever moves, the motorhome doesn't. You'll need a HELOC to fix that one!
I oversaturated myself with long-term debt
tranches of like, yeah i'm with ya
guess if he had just stopped going into debt when he was saturated then he would have been ok.
What is it about boats that are so appealing? I mean, we all know they are "holes in the water you throw money into", yet at some time or another everybody wants one. Hell, I'd love one, but (so far) I know better.
Human nature is crazy.
The news just keeps getting worse.
14 Tons Of Spilled Oreos Snarl Traffic
14 Tons Of Spilled Oreos Snarl Traffic
Got milk?
Anyone spending 60K/yr on a rapidly depreciating "asset" while closing in on retirement is completely nuts.
Oil Producers Mask Decade's Worst S&P 500 Profit Drop
Take away Exxon Mobil Corp., Chevron Corp. and ConocoPhillips and profits at U.S. companies are the worst in at least a decade.
Hoocoodanode that Wall Street's hanging in there due almost entirely to Peak Oil.
Animal shelters are always overflowing with abandoned cats and dogs during a recession. If we see an uptick in horses being given away because the recession is affecting the horsey set, we'll know it's going to be a bad one.
And if an owner stops paying for board and feed, does the repo man get a call? That would be an interesting repossession.
"His 401(k) is down to $9,000."
This right here is why I think that 401k 's are a huge rotten scam. Was supposed to be the mans retirement account. Considering the reaming that Uncle Sam gives you when you take stuff out, he'd be better off never having one at all. I suspect that when the Boomers retire were going to find that vast numbers of them put money into these accounts, and then drained them dry when things got rough, having paid huge penalties and fees all for nothing.
My parents finally sold their 17'(?) Johnson ski boat last year as parts were getting hard to find for the engine. It was older than me, and I can't imagine it cost (the boat, not ongoing maintenance, fuel, etc.) more than $100 a year. I remember feeling slightly embarrassed as it was older than most anything else on the lake, but then again, I noticed, none of my friends parents had boats. Sigh. Late night nostalgia on CR... Oh, and they bought their first new car this year. Obviously they are Silent Gen, not boomers.
Someone needs to email this to President George Bush and his merry band on money printing republicans. Maybe, there is a program. Maybe, it was a disease. Let's print money so they can save their boats. Please!
Animal shelters are always overflowing with abandoned cats and dogs during a recession.
I volunteer at a rescue, and I'm not happy about that prospect one bit.
Gibbon1
While I'm happy that I have built up a substantial 401(k) without the need to raid it, I've examined IRS statistics over the last few years and found that a fairly large percentage (~12%) of taxpayers who have retirement income pay the 10% penalty for early withdraw.
That's been the case during the 2002-04 period. Data for 2007 and later will be interesting, but unfortunately typically aren't available for a couple of years.
picosec,
The other thing that bothers me is that one's economic choices depend a lot on what other people in your cohort are doing. When people can't pay the mortgage it puts downward pressure on prices. Allowing people to raid their retirement accounts distorts that and puts more pressure on other people to do the same thing.
In theory if you lose your job, your house it under water, you can't pay your mortgage, and you have 100k in a 401k, what you should do is let the Bank Foreclose on the house and rent, live in mommas basement, couch surf, whatever. Not draw down the 401k. But that is what people do. My parents were of the silent gen, that sort of thing would horrify them, and it horrifies me.
The astonishing fact is that loan amounts tripled from 2000 to 2006. They effectively went from luxury car territory to the small home category. I suspect that with waterfront vacation homes having leapt, these became the substitute, a place on the water that moves. Unfortunately boats only depreciate and typically severly. Not only are these boats very fuel inefficient, you have to buy fuel at marinas at much higher prices. Put "marine" on anything and the price triples.
Will this name fit on the back of a boat? Term Auction Facility
"The "over 10" condition has led to many donations, after slip fees have finally wiped you out. As the above decks and cockpit stuff degrade, osmotic blisters grow, and the engine blocks corrode, the boats go to donation and scrap."
One of my mates told me a boat was "a hole in the water you pour money into"
And my dad said 'as safe as houses'
Generally i like my generalisations.
401k's and IRA's were one of the biggest scams ever perpetrated on the public. From the beginning it was transparent that as boomers retired, only the first to cash out were going to get some of their investment back.
Just wait. Not only will the markets in which those funds are held implode, but (adding insult to injury) the rules will be changed so that withdrawals will be taxed. Anyone who thinks otherwise has a naive view of gov't.
Same with defined benefit pension funds. I draw on two such funds, and boy, I've been drawing as early and fast as possible.
It's astonishing how many people are cynical about the future of Social Security, but assume that their 401's and IRA's will do okay. Sadly, most retirees will be too old and tired to stage a revolution.
The borrower was obviously being absurdly reckless, but what sort of lender gives a non-amortising loan for a depreciating asset?
The collateral damage of easy money just keeps getting worse. Blame the borrowers for their conspicuous consumption if you like. They supported businesses like boat builders, marinas, and West Marine. What will those workers do now? I suppose it is the fault of those well paid folks slopping fiberglass and resin on a mold that they chose such a foolish "profession".
I suggest the following analysis from Bob Herbert's NY Times column today. The only winners were the super rich:
In his book, Crunch: Why Do I Feel So Squeezed?, Jared Bernstein reminds us that the economic expansion from 2000 to 2006 was something less than nirvana for working people. The economy grew by 15 percent during that period, and the official rates of joblessness and inflation were low. But as most of us know, the benefits of that expansion were skewed to the high end of the economic ladder.
Mr. Bernstein, a senior economist at the Economic Policy Institute, writes: Over the course of this highly touted economic expansion, poverty is up, working families real incomes are down and some key prices are growing a lot faster than the average.
Steven Greenhouse, the labor correspondent for The Times, has also written a book that examines, among other things, the imbalance in the way the benefits from the expansion have been distributed. In The Big Squeeze: Tough Times for the American Worker, he says:
This is a decade during which the American economy has thrived by many measures, with corporate profits and C.E.O. salaries soaring, yet wages have languished for most workers, and health and pension coverage has grown worse.
"Mechanics shops may prosper as many people try to upkeep their older cars rather than spend money on new. You see, there is always a silver lining. What's all the fuss about?"
doom | 05.20.08 - 12:23 am | #
doom,
My brothers words this weekend..."I am absolutely buried in work". He has a part time auto repair business that really should go full time.
Another friend has a trans/diff shop and he told me two weeks ago he is busier than anytime in the last 25 years...Hell I am swamped here at work.
Chris
Crap, Cobradriver is up already? I gotta quit staying up so late. Night all.
There used to be those little sail boats you could tool around in. But I imagine its no fun getting run over by jet skis.
Out for our first race last week, it was amazing how few wakes were out on the bay on a perfect evening, since all the powerboats are saving their money for the big weekend starting Saturday.
Even better for us ragpickers is that when fuel gets north of $5, Captain Jackoff quickly gets up on a plane for better fuel consumption instead of pushing a big annoying bow wave around like he is commanding an air craft carrier.
I thought things may be bad, but talking to a long time friend who owns a major brokeage south of Boston 2 weeks ago, he told me he is running ahead of plan.
It will be the drywall contractors/electricans who trailer their Bayliners/Donzis behind their work vans/pickups to public ramps that will be boating less this year as no work and fuel prices kill them.
Next year, it will catch up with the bigger boats as the little guys will be slaughtered and not be trading up.
You will also see lots of marinas go under because they cannot afford the bank note on the place. Happened in 80s, and this is shaping up the same way.
Question is, do spectulators buy up the land for condos when their business lays in ruin?
The question I had for 2 years is what were people thinking when they took the equity out of their home be it for an RV, boat, or granite counter tops. Bottom line is when you have twice the debt, you have twice the payment to make each month.
And not to lock in to a fixed rate when doubling assets was the height of folly for college educated people.
Gomer
any chance W will bail these boaters out, especially those retirement types with powerboats.
It describes his dad perfectly..
I'm hoping one result of this is we get a director's cut DVD of RepoMan.
Had a boat once.
Overheard an acquaintance remarking at a party, "Why own a boat when you can dig up a friend who owns one?"
Sold boat.
"It was a risk, a calculated risk."
Is this a sign? Is this CR's real identity? Is this like the DaVinci Code?
CR, is that really you?
We sold our small house years ago to a guy who worked at a boat manufacturing place. For $50 grand.
The shop has gone under and is empty. He should be ok, if he didn't pull any money out of it.
Some hundreds lost their jobs.
Unirealist:
401Ks are taxed! They are taxed at ordinary income rates!
Which given the average individuals propensity to invest long term in INDEX funds can be a loser. If you are a high income individual (25% tax or so) and plan on similar income in retirement, you are better off paying taxes up front, and then paying long term capital gains while having acess to your money if needed.
The government knows this. I agree, it is by and large a scam to collect more future taxes at a higher rate than might otherwise be taxed at.
I have no intention of ever buying anything, ever,
People said similar things about stocks after the first depression. They meant them then. I suspect he means it now. Who wants to be first to tell me that nothing has changed and people will always spend all they make?
OT: crude nearing $129
i think oil is getting to the point where it will really start affecting investment sentiment in the stockmarket. it may very well become the trigger that will end this bear market rally.
"One of my mates told me a boat was "a hole in the water you pour money into" "
I used to work for a woman who was half-owner of a sailboat. She said you could get the same experience of boat ownership by standing in a cold shower and tearing up $100 bills.
I would love it if the boat market were hit even harder. The waiting list for harbor space in Chicago is many hundreds of names long - and the oldest names on the list are from 1999.
I'd buy a 20-25 year old sailboat and strip out most everything in the interior except the head. No need for much of anything if your just sailing for a few hours whenever you get some free time.
To the poster way way above - I too am in love with the Alerion Express boats. Too bad the AE 28 seems to be holding steady at $75,000 - $100,000 for used ones.
better check out the express upclose. the pictures are great. however,they are lightly built with core materials and bulkheads spoil fairness on the hull on new ones. Make sure it is a very lightly used 28 in five years.
Sure am glad my tax dollars will go to bail out this guy's boat. Why the heck did I not buy a new car and all that? Oh yeah, I was stupidly, fiscally prudent.
I call it schadenfreude. Growing up my parents were pretty well off and we had a 48 footer cabin cruiser (hsld 1200 gallons of gas).
Back then only real money had boats, and all during the 90s and 00s, I noticed more and more people with 1/10 the wealth of my parents with newer and bigger boats, who also had some attitude and entitlement as new boat owners, which to old boat owners was really annoying.
So sorry to see these people wash out, not.
A typical two-stroke outboard motor gets between 1 and 2 miles per gallon, depending on boat size, waves, etc. An afternoon of tooling around the lake will set you back about $150-200 in gas alone.
You'd save a lot of money going to the OTB instead.
rich | 05.20.08 - 12:08 am | #
Or go with wind power, much more enjoyable anyways!
A good friend who bought a $7 million home a few years ago when his wife's closely held stock was bought out, told me his parents, who are about the Wasp-iest people I know, bankrupted themselves (after retiring) buying a house boat and motoring from Chicago to New Orleans and back.