Tuesday, May 25, 2010

Double dippin'

We managed to beat last years sales Sept. through March, 7 months in a row.

Last two months? Not so much.

I'm thinking now that those seven months were the easy ones. That we're now up against the stabilized bottom, scraping along, and when the news is good we bounce above that bottom and when news is bad, we're digging into the dirt of the bottom.

So my planning is going to assume that bouncing for the foreseeable future. Which basically means maintaining current levels of spending, or even moderating them. It certainly means not raising my spending for summer like I'd originally intended.

In a way, I think I need to go back to the First Principles -- that I talked about two years ago, of what I know about Bubbles:

1.) Burst bubbles always drop farther than you think they possible can drop.

2.) There are lots of false signs of recovery, lots of ways to lose your shirt betting on recovery.

3.) They always last longer than you think. And last and last....

4.) They don't tend to start to recover until you've given up on them recovering. You turn around one day, and you realize that sales have gotten better. But you stopped looking for it.

Multiply me and my little store by thousands and hundreds of thousands, and add in all the people who's portfolio's have just dropped 15% and expect more bad news and what do you got?

Double dip recession.

Here in Bend our unemployment rate is 1% below last year. But I have to wonder how many people have left town for work, and how many have just given up.

Linda and I drove around the Northwest of Bend yesterday, looking at shrubs (We need to replace the shrubs in front of our house) and the incongruity of wealthy houses just leaps out at me. Who lives in all these mansions? What do they do for a living? It just doesn't feel right.

When I grew up in Bend, we had 13 thousand people. I still have a hard time wrapping my brain around this enormous growth, and I still have doubts about it's sustainability.

The stock market is acting up just as people are probably making their summer vacation plans. Got to wonder if people are going to back off. Tourism is what we're about, I think. And we'll always get some of it. But maybe not that little extra burst that we'd like.

No way of knowing. But I do have to start planning, and I'm thinking double dip.

2 comments:

RDC said...

keep in mind, this is a deleveraging event. The time between the top and the bottom in such an event is about five years. We are now two years into it. The first major down turn was the financial sector credit crises. The can was kicked down the road by massive government spending and increases in sovereign debt. We are now seeing the second which is that countries realizing that they have a debt problem and are starting to deleverage. There will be atleast one more (maby several more) which is when the US runs into its own debt wall and must deleverage. That might just be the biggest downturn yet. We have a ways to go.

Pedro Hemes Valdes Ortega said...

Hey Gringo Bitches!

Wow RDC is getting so damn real.
I can only imagine a few years ago when he was pollyanna.

Good to see more folks talking real.