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A-E
06-14-2012, 07:41 PM
Hello.
We are approached by financial institutions on a daily basis.
They all want to offer capitals for investments.
I Keep repeating what customers tell us: "we love your products but we have to wait for a while".
This pretty much reflects what our sentiment is. We do not need capital for new product or to advertise more. Most consumers are not confident about the future, therefore they hold tightly to their funds.
I guess my question to you is: (avoiding political speeches) What do you believe comes first, the signs that the economy is picking up and a consequent shift in the population trend or a solid reassurance that we have people at the top making the right decision, therefore motivating people to spend money and invest?

It's a general question. - Hopefully it will not turn into Left and Right discussion.

In out case uncertainties are keeping us from moving forward with new ideas.

tmerrill
06-18-2012, 08:48 AM
Life is always uncertain. If you wait for certainty, you will never find success in business. The key to managing uncertainty is to lower your risk when trying something new. I think you should do whatever you are hesitating to do despite the economy or who is in the White House.

vangogh
06-24-2012, 01:53 AM
I think it's some of both. The economy shows some positive signs, which increases people's optimism and confidence, leading to more spending and more positive signs, etc. Even more important is the money. When people are making more money they spend more. When they're making less, they spend less. Ultimately it's irrelevant to me what the signs are or what confidence most people have. If I make more money over the next month I'm more likely to eat out a couple more times or buy some product I've been wanting or needing. I think that's how most people are. If we have money after the bills are paid we tend to spend some of it. When we do companies make more products and hire more employees who then have more money to spend.

BP Writer
06-25-2012, 03:28 PM
In theory the right person at the top would spark economic growth, but not because of popular psychology/confidence, in fact just the opposite – they would promote growth by making hard decisions that would be wildly unpopular – but for the best.

To our great discredit as voters, we DO shoot the messenger, therefore politicians don't tell us what we need to hear, and don't do what truly needs to be done. Regardless of whether it was Obama, or McCain, or Clinton (Hillary), or Romney...neither of them was going to stand up to the big banks and make bank investors take the losses that they earned. As a result there is still a massive amount of bad debt hanging around our economic neck...job and income growth suffers, people feel poorer because they ARE poorer, so they don't spend, and the condition drags on. Bernanke's “quantitative easings” aren't the answer – all they did was promote stock market speculation (at the expense of savers) but without helping the real economy.

The bottom line is that the big banks screwed up massively, and they all need to be treated like the bankrupt institutions that they are. In failing to address this fundamental problem directly we have consigned ourselves to a long period of anemic growth similar to what Japan has endured (the lost decade that has now lasted 2 decades). On the one hand that addresses your concern about uncertainty, but on the other hand I'm sure it isn't the optimistic outlook you hoped for (I would obviously make a lousy politician).

A-E
06-25-2012, 04:11 PM
We see sales fluctuate consistently with the so-called "news". It is about the confidence and perception.

It's easy to say to keep investing without worry about whey the people at the top say.
These people must have not lost their retirement twice by trusting the economy and managing risks.

We can't, as a business that doesn't believe in borrowing money but run on a + check book, keep moving forward when people have been scared to buy products they love.

I would suggest to be careful leaning forward too much right now. At least until we know there is some accountability for major actions that change the whole economy. I also would suggest not to speculate on things like "take advantage of a local disaster" to just promote your products. People will lose confidence everything.

I have never worked this hard in my entire life and I'm getting the smallest return-per-hours worked than I ever did.

Fun stuff :)

vangogh
06-28-2012, 12:34 AM
We see sales fluctuate consistently with the so-called "news". It is about the confidence and perception.

I really don't think people go out and buy because the they hear something on the news telling them it's ok. People will buy when they have money to buy. If they don't they won't. I think confidence and perception do matter, but it's more about confidence and perception in their own situation. Someone might hear a string of positive news about their industry giving them more confidence that it will strengthen the company they work in, making them more confident their job will still be there in 6 months. That could lead to them spending money they'd been hanging on to because they were worried about their job.

If people think their situation is going to get worse they probably don't rush out and buy a few things. They hold off on the new tv or the new car. They eat out less often. They see a couple fewer movies in the theaters. Positive news can convince them their situation won't get worse or even get better and they'll go and and take in those movies and visit their favorite restaurants. They may even get the tv or car. That's not the same as the news convincing them to buy though.

A-E
07-01-2012, 05:05 PM
It is difficult to go to the next step and move forward without confidence.
It's true that if we don't spend money the economy doesn't pickup or move forward but. Of course one thing is buy your necessary food and maybe take your family out to dinner and a movie. Another thing is taking a leap of faith and do things like starting a home remodeling project or even buy a new home.
Some say that the median home price is as low as it will get but in these moments comes the confidence I was talking about.

A lot of us have paid dearly for investing in something that turned out to be a bubble. So at the moment the vast majority ( and I'm talking about regular people ) is really holding back on major expenses.

BP Writer
07-01-2012, 06:10 PM
I think the housing market will be down and out for many more years due to the inventory (including shadow inventory) of unsold homes, the extensive number of underwater mortgages, banks being overly conservative in making new home loans, and peoples reluctance to buy given all of the above. This article addresses some of the above: 10-million-underwater-mortgages-and-shadow-inventory-worth-246b-mean-housing-trouble/ (http://www.forbes.com/sites/afontevecchia/2012/06/26/10-million-underwater-mortgages-and-shadow-inventory-worth-246b-mean-housing-trouble/)

The above, combined with the state of the economy as a whole, does make it very tough for a business like yours because people delay bigger ticket optional items like home improvement – particularly the “decor” part of that. If you can persevere until consumer confidence improves you might be rewarded because many people who would have normally “bought up” in the past will now be staying put and just fixing up the house they have. In the meantime it sounds like your real challenge is trying to target the subset of such people who are economically stable enough to make some improvements on their place now (easier said than done, of course, but if it was easy everyone would do it).

A-E
07-01-2012, 06:58 PM
We're hanging in there.
We always say that when the economy pics up again, there will be a lot of homes that were neglected during the recessions ;)

We are OK, it's just hard to grow at the moment.

BP Writer
07-02-2012, 12:00 PM
Brief video regarding OP - commentator seems to be saying that consumer confidence won't return until hiring improves in a meaningful way: http://live.wsj.com/video/what-keeping-consumers-from-boosting-recovery (http://live.wsj.com/video/what-keeping-consumers-from-boosting-recovery/942C3364-D6EF-4717-B86B-F0682E149A87.html )