Double Dip Economy ??

[Garage Dog 65]

Economists and pundits are saying we are in a double-dip economy now…

Looks like the racing community will have another round of shop closings and layoffs during this off season. Here in Indy, the Motor Sports Park is losing even more teams and businesses. Don Prudhomme lost their sponsors and closed this week.

http://www.snakeracing.com

[Ketzer]

Our local drag, road course and oval went belly up also. Memphis Motorsports Park.

[radrambler]

that sucks

never thought THE SNAKE WOULDNT BE DRAG RACING..
figured he would have been able to get someone to throw some money at him after his history in the sport..Kenny did it..

good luck to all the newly unemployed people ..it sucks

Tom

[ccracin]

Yeah, it's bad. We may be loosing the last asphalt short track in our area. That will mean both tracks I raced at will be done. :mad:

[wiedemab]

I went to see Martin Feldstein (Harvard Economics Prof.) speak at an Economic Club of Indiana event up at Eli Lily a month or so ago and he warned of this exact thing - the double dip.

The stimulus "propped" the economy back up, but unfortunately the base isn't there to support this level of economic activity and it may falter again.

He advised the monitoring of the personal savings rate as an indicator of where we are headed. He was a bit vague on the exact numbers, but if I remember correctly - if the personal savings rate rose to near 6-8% we would be in trouble. If it stayed below 4-5% we may be OK, and if it went to around 1-2% we may see a significant recovery. There is a fine line between a savings rate that allows for healthy economic growth and unhealthy growth - case in point the mess we are in now.

The other problem is that the data that I seen on the Personal Savings Rate is lagging, so we won't likely know (from the data) that it's gotten worse until we already know it from experience.

http://www.bea.gov/BRIEFRM/SAVING.HTM

There are obviously way too many variables to consider, but I thought I'd toss this one out there.

[GregWeld]

I'm involved with a few things - and business is booming...Up Huge....

I think the "dip" and your economic outlook is steeped in "regional" issues and industry related issues. If you're in the "rust belt" - you are certainly seeing the bottom of the glass. So many businesses were (note the past tense) advertising based for support... and that advertising gets cut 10 or 15% and the "fringe" will be the first to fall.

Business is measured this year: Flat is the new UP. LOL. However, some businesses are humming along and actually expanding. Autos would not be one of those... and these days - even an actual manufacturer could be doing quite well - but the employment is in China or India, NOT in the plants that were union shops based in the US. In my area - Boeing is a huge manufacturer... but their new plant is going to the Carolinas where the workers will get substantially less than the same workers here. Cost of living is quite different etc but none-the-less the jobs created are "gone" from here. Boeing however is doing "well".

So if you're into "composites" - to take just one example - business might be booming (the new 787 is composites) but if you're stamping aluminum (old planes) business might suck.

My reason for posting -- is that maybe people need to look for what's going on - not going down - and make a switch or work towards a switch... which may mean relocating etc.

[wiedemab]

I'm sure there are many specific sectors that are performing well. My comments were more high level and related to the aggregate US economy.

I like you "Flat is the New Up" comments. So True though.

[rwhite692]

Semiconductor industry (my line of work) is doing pretty well since the second half of 09...the 2008 downturn made a lot of semi companies greatly curtail their production starts (ours is a long-leadtime business) and the customer base was caught without product in many cases. Well-capitalized companies that did not have to scale back their starts as much, were better positioned to support customers and take business away from competitors, when things improved.

The larger problem in this country is that (my opinion) not nearly enough people (business and individuals) are innovating. (and also agree with Greg's sentiment above, that people need to be much more willing to change/learn/adapt to fit with what and where the jobs are)

Combine all this with a corporate tax rate that is out of control....Eh! don't get me started.

[Garage Dog 65]

The motor sports section here in indy is getting killed.

Simpson Industries (Impact) purchase 50 acres 2 years back and planned to build their manufacturing and testing facility here. They were also going to build some buildings to lease to others on that property. They cleared the land - and then stopped the expansion plans last spring/summer. The property is up for sale - and they moved across the street to a bigger building and placed the entire deal on hold.

Vance and Hines race shop and manufacturing is also here. Same deal only worse. 3 years back they purchased the property next door and build a huge manufacturing facility there to bring in-house all their street bike manufacturing to one place (some is contracted out too). 2 years back they finished the building shell - and never moved in. It's empty to this day - except for storage.

Almost every motorsports and support shops here have down-sized and reduced employees. Many of the buildings are now vacant. 2010 sponsors are down or non-commited right now. It's another industry relying on discretionary spending and will be one that recovers last.

If it wasn't for Lucas Oil teams, sponsorship and series support - it would be really ugly...

And on the bright side - Force Racing is doing well and expanding here in Indy with a huge manufacturing capability and moving their other operations here. Love those guys (and gals) !

[buickfunnycar.com]

Shame indeed about Prudhomme,truly one of the greats of the sport and deserves to go out his own way.

NHRA has been circling the drain for quite awhile...happens when bean counters who have no ties to drag racing run the show.

[GregWeld]

This recession really does seem to be "industry" and "regional" related. Bellevue is "high tech" -- with lots of start ups - lots of young guns eager to make their mark etc. The new "tech" here is all about "shoe stringing".. i.e., NOT relying on big cash backers - but building stuff in the "corner" and then coming out with it (whatever "it" is). Microsoft still employs a zillion people - even though they no longer get rich off of the stock options... Amazon - Drug Store.com - Starbucks and others in the area are doing "fine". I have a couple of buddies in real estate here - they're doing quite well. They're PROS - they're not blondie weekend warrior people - they actually understand the market - know how to get people to make deals - and how to get REAL buyers financed etc. While it isn't the go go days of a couple years ago - they're doing fine. The blondies have all quit so aren't siphoning off deals.

If you were building houses - you're out of business.... If you were a "flipper" you're out of business... If you were a condo developer... you're OOB. If you're selling anything that makes someone elses business easier - or more profitable - or to do the same amount of work with less people - you're doing GREAT... So it really just seems to be where - when - who...

If you are a laborer at a old tech manufacturer - you're probably out of work. If you're college educated - highly skilled - "new age" manufacturing or tech skills - then you're in demand. Oh -- and if you work for a collection agency - you're probably really busy!! LOL

[GregWeld]

Any "business" that relies on advertising - NOW has to be prepared to show that advertising with you is going to drive sales - or sales increases. If you can't do that - you're out. Backing a big league NHRA fuel team is HUGE money. John Force can probably show that he drives Castrol sales... I doubt Kenny Bernstein could say that to Budweiser... (just examples off the top of my head). It goes way back to when the Auto companies backed race teams - the old "win on Sunday, sell on Monday" comes to mind. Somehow - the fact that your car looks like a box of Tide - and you win some NHRA race - doesn't cause me to go out and buy a box of soap. When money is flowing and one of the boys in the board room is a gear head - then they throw some money around.

"We" sponsored THREE Indy Light cars in 2007 -- even won the championship... but that never was going to help sales - it was all just for fun. When you look at the cost/reward relationship - and you have to justify that to your shareholders..(the "we" is now publicly traded) you're not looking real sharp. So it comes to a halt.