RECESSION HITS the WEALTHY! More Economic Slowdown Predicted for Midyear!

[Chemical Ali]

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

[Chemical Ali]

Well, guess the BUSH RECESSION has no end in sight.

[Ron Peterson]

Post by Chemical Ali
Well, guess the BUSH RECESSION has no end in sight.

It does give all sorts of investment opportunities in alternative
energy situations.

--
Ron

[o***@googlemail.com]

Post by Chemical Ali
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/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.

[r***@comcast.net]

Post by o***@googlemail.com
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

[Fed Up in L.A.]

Post by Chemical Ali
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.

[W. Wells]

There is wealthy and there is wealthy.

Post by Fed Up in L.A.

Post by Chemical Ali
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.

[mcbrue]

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.