Prices not going down??

[Chotu]

Originally Posted by CarinaPDX

The US is at the end of one of the longest periods of expansion ever, and we were set for a contraction no matter what. Covid-19 was a pretty harsh trigger and caused a sharp drop, but a contraction was coming. I see no reason to believe that after such a large negative impact the economy would rebound quickly. Of course there are many unknowns, such as how long the response to the outbreak will last, but early recovery seems unlikely. Just the loss of all of the wealth as (some) consumption continues while income and output is dropped, as well as the market losses, argues for a lower level of activity for some time after the immediate health crisis ends. And all of this money the government is set to give away is not raining down from above: we, collectively, are borrowing now to get through it and will be paying off this debt for a long time - either through capital and interest payments or inflation. This is going to be a large damper on growth. I admit, I am a fan of the Dismal Science...

As for the boat market, the first thing to know is that it is very opaque by intent. Asking prices are being held very high by the brokers, and of course the unwillingness to accept the real cost of owning a boat by the sellers (a boat is an expenditure, not an investment) means reluctance to accept the real market value. The market never recovered from the 2007/8 crash. There are very few buyers relative to sellers, in part because banks won't loan to buy older boats and so only people with cash can buy. The current crisis will likely reduce that number even more. I recently asked a local broker how long it took to sell a cruising boat and he said it was about a year (during which the owner pays for slip and insurance). From what little I have seen many of them go for a lot less than asking (by talking to either buyer or seller - brokers keep that info close), although that is not across the board. OTOH a friend with a nice Cascade 42 set a reasonable price (i.e. historically low) and had at least two cash buyers appear quickly. The lesson for a seller is to accept the loss of value and price to market, not desire. For a buyer, know that cash is king and the best way to discover the market value is to make firm offers. Both should know that the brokerages' asking prices are often inflated, sometimes by a lot, and they are often very resistant to cutting the public asking price - after all it costs them very little to wait for a better price, it is the owner that bleeds money. If I were selling I would do it myself and price reasonably (but given that I built her, I am more interested in getting the right buyer than making money - not a lot in her anymore no matter how special she is). As a buyer I would pretty much ignore asking prices and just make firm cash offers according to my judgement, to private or brokerage listings.

Greg

I have a cheat on my boat for sale in your tight lending market scenario.

Offering owner financing. Also set below soldboats.com sale price of sister ships in worse shape without new sails and stuff.

Should work very quickly. Except I listed it 2 days before the craziness started. Lol

I'll relist once the virus washes through with the same just below market value price. Bonus is we get to spend a quarantine summer on it enjoying islands and quaint harbors. Nature. Peace. In a way I'm happy she didn't sell yet.

How often does one get forced time off of work and a boat to use all summer?

People playing games on the purchasing side instead of researching market value end up not going sailing. A poor life choice in my opinion. I pay market value when I buy. I get good boats. It's better to get a good boat you can trust and more importantly use when you're buying rather than wasting your life looking for a dream deal from dead people or something.

[geoleo]

Originally Posted by Wotname

Curious - exactly which dollar are you referring to?
Last time I checked, there were more than 20 to choose from.

The one that buys oil. USD

[geoleo]

Originally Posted by sailorcherry

I think the answer you are looking for is the USD is the safe haven currency. It was in 08, in the beginning. What other dollar, in this situation, looks safer? It is a global virus.

People are hoarding cash - liquidating anything that's instantly liquidable and/or made the most profits; boats are neither.

My opinion is once the stimulus takes off, then the dollar should devalue and certain currencies will stabalize. Those certain ones with lower debt:gdp ratios and/or strong manu countries and not like US, >70% GDP consumer spending based economies. In particular gold and silver should rocket launch from stimulus (look at 2010-2011) and in this case obviously some healthcare suppliers and companies hired to partner with. Silver lining here may be we become a much stronger manufacturer from this and show our ability to evolve, adapt and therefore continue to lead the global economy.

You're just asking this question far, far too soon. Stimulus hasn't happened, were on lockdown essentially and there's been no bottom in the markets. Who has time to update their ebay ad on a yanmar part in FL when they are spending night and day trying to decide which bills to pay, job loss or not, kids, school work, illness, basics shopping, getting home and of course managing their stock account?

PS - Let's try to stay positive, be kind and not be selfish hoarders.

A reasoned appraisal--- I have been in all cash since the dot com bust--butI bought a 25yo sailboat 3 months ago! But sold one just before that! oh well it will all balance out for me.

[redneckrob]

Originally Posted by Island Time O25

As a society we have lost the ability to be flexible economically and rely on other mechanisms to achieve price-demand equilibriums. This price inflexibility necessitates major jolts once in a while which we call "recessions' or even "depressions". By price I mean not only the prices at the retail level but all costs - labor, materials, logistics, etc.

We haven't "lost" anything. We've had 47 recessions in the U.S. since the founding, there was a period in the 1800s when they were coming every few years. If anything they're significantly milder then they were in the 1800s and early 1900s when we routinely had high -20% and low -30% GDP contraction (https://en.wikipedia.org/wiki/List_o..._United_States)

[geoleo]

Originally Posted by cuthbert

I think this is pretty much the way to tackle this or anything similar such as 401K etc. Sit tight if you can and wait for everyone to calm down/stop watching the 24 hour news.

Last recession I noticed maybe 1% or less of newish or good condition sailboats going for a song, but in the most part boats are owned by people who are rewarding their own labor and not 'living the daydream" and they paid and subsequently sell at fair market value. It is of course possible that the draconian response to a virus that may kill at most 1% of the population could collapse the whole economy and fair market value will be a different lower number. But I doubt this, as those seriously at higher risk (very old/underlying conditions) may self isolate to a painful degree to ensure survival but the rest will only tolerate a reasonable amount of infringement on personal choice for the perception of a greater good.

On a separate note with so many in the same boat (so to speak) would any care to speculate on investment strategies? After getting 80% out in 2018, I started this weekend with 5% of my discretionary (not needed for now to 2024) cash into the stock market and intend to do this 19 more times at weekly intervals, so by autumn I will have as much stock market exposure as I would care to have at any time. The experts are saying don't buy yet, but the same experts were saying as little as two months back don't sell and instead buy more.
Comments?

My comment is that you love to 'play 'the market.

[geoleo]

Originally Posted by Chotu

I have a cheat on my boat for sale in your tight lending market scenario.

Offering owner financing. Also set below soldboats.com sale price of sister ships in worse shape without new sails and stuff.

Should work very quickly. Except I listed it 2 days before the craziness started. Lol

I'll relist once the virus washes through with the same just below market value price. Bonus is we get to spend a quarantine summer on it enjoying islands and quaint harbors. Nature. Peace. In a way I'm happy she didn't sell yet.

How often does one get forced time off of work and a boat to use all summer?

People playing games on the purchasing side instead of researching market value end up not going sailing. A poor life choice in my opinion. I pay market value when I buy. I get good boats. It's better to get a good boat you can trust and more importantly use when you're buying rather than wasting your life looking for a dream deal from dead people or something.

I thought you were selling your Gulfstar to buy a rig for your catamaran?

[geoleo]

Originally Posted by henryv

Things may start getting back to normal a little sooner as there are a couple serious treatment trials underway that have the potential to seriously limit the effects of the disease. A French doctor already completed a trial using a combination of the anti malaria drug with an antibiotic. The patients receiving the drugs recovered quickly. The same drug combination has just been started in a trial in New York. They are also having success using a serum taken from people who have recovered and who are now resistant.
Once there is light at the end of the tunnel people with start thinking more positively again.

You and Trump are "hoping".

[geoleo]

Originally Posted by CarinaPDX

The US is at the end of one of the longest periods of expansion ever, and we were set for a contraction no matter what. Covid-19 was a pretty harsh trigger and caused a sharp drop, but a contraction was coming. I see no reason to believe that after such a large negative impact the economy would rebound quickly. Of course there are many unknowns, such as how long the response to the outbreak will last, but early recovery seems unlikely. Just the loss of all of the wealth as (some) consumption continues while income and output is dropped, as well as the market losses, argues for a lower level of activity for some time after the immediate health crisis ends. And all of this money the government is set to give away is not raining down from above: we, collectively, are borrowing now to get through it and will be paying off this debt for a long time - either through capital and interest payments or inflation. This is going to be a large damper on growth. I admit, I am a fan of the Dismal Science...

As for the boat market, the first thing to know is that it is very opaque by intent. Asking prices are being held very high by the brokers, and of course the unwillingness to accept the real cost of owning a boat by the sellers (a boat is an expenditure, not an investment) means reluctance to accept the real market value. The market never recovered from the 2007/8 crash. There are very few buyers relative to sellers, in part because banks won't loan to buy older boats and so only people with cash can buy. The current crisis will likely reduce that number even more. I recently asked a local broker how long it took to sell a cruising boat and he said it was about a year (during which the owner pays for slip and insurance). From what little I have seen many of them go for a lot less than asking (by talking to either buyer or seller - brokers keep that info close), although that is not across the board. OTOH a friend with a nice Cascade 42 set a reasonable price (i.e. historically low) and had at least two cash buyers appear quickly. The lesson for a seller is to accept the loss of value and price to market, not desire. For a buyer, know that cash is king and the best way to discover the market value is to make firm offers. Both should know that the brokerages' asking prices are often inflated, sometimes by a lot, and they are often very resistant to cutting the public asking price - after all it costs them very little to wait for a better price, it is the owner that bleeds money. If I were selling I would do it myself and price reasonably (but given that I built her, I am more interested in getting the right buyer than making money - not a lot in her anymore no matter how special she is). As a buyer I would pretty much ignore asking prices and just make firm cash offers according to my judgement, to private or brokerage listings.

Greg

Bet you are a real dismalist.

[Wotname]

Originally Posted by geoleo

The one that buys oil. USD

Surely you mean Petrodollars then

Although looking at the current graphs of oil prices, they will giving the stuff away in a couple more weeks.

[jmschmidt]

Prices may be up because boat yards around the world are closed and there will be little to no supply of new off-the-ways yachts for sometime. All the charter companies however may start dumping their fleets of corporate-owned, and even member-owned, boats so that may change the equation.

[alansmith]

And the prize goes to .... Geoleo... congratulations!!! You are the winner of the “ just had to make it politics with the mention of the Prez.

[Chotu]

Originally Posted by geoleo

I thought you were selling your Gulfstar to buy a rig for your catamaran?

I am. But it'll wait until the crisis is over. As a bonus, I'll be going sailing for the summer.

[alansmith]

Saudi Kingdom playing hardball with USA and Russia. They have decided to go all in on their gambit to punish Russia for walking away from table at OPEC. I was looking at the numbers of how much fracking costs for USA and Canada versus what it costs them to pump crude out of the sand. My goodness it ain’t even close. The frackers are in for some tough times. I’m paying 2.89 for premium in N California. Haven’t seen that in a long long time. And if you don’t know petroleum products in America ... and why should you if you live on another continent... I pay one dollar less for diesel in Arizona per gallon than I do in California. And we have the harbors, infrastructure, and delivery setups. So that means tax add on and a factor I call ‘cause you can afford it more betta’ in California.

The Saudi Prince is trying to dislodge America as the number one oil exporter. He might succeed when the frackers have to shut down production because it is way more cost efficient to buy Saudi oil at a significant premium to their costly fracking. You can imagine the poor souls in the Dakotas stuck in real estate.

This isn’t politically directed at anyone but it looks like the printing presses will be running for upteen days with the stimulus pkg. it is staggering to imagine our debt. We are not alone. But I would say USA is number one debtor nation in this blue planet. If China wanted to destroy us all they would have to do is sell even a small portion of the debt instruments they’ve bought from us. I still can’t make the math work out why our interest rates on treasury bonds and T-bills haven’t climbed over the last years. How are we able to attract Capitol to finance debt with such poor returns? I am baffled. Any opinions are now being solicited and my ears are all yours.

[Lake-Effect]

Originally Posted by alansmith

And the prize goes to .... Geoleo... congratulations!!! You are the winner of the “ just had to make it politics with the mention of the Prez.

Once upon a time, one could refer to a sitting President without everyone screaming "politics!".

Anyway, The One Who Cannot Be Named is having thoughts about the lockdown.

Truth be told, so am I. I remain convinced that it's necessary, and the better we all comply with it, the less people will be infected and the sooner we can start getting back to normal. But I also think that the authorities need to do better than to impose something, with no end in sight. If they could give some idea of a duration - eg end of April, then starting to ease after that, then people and businesses can plan, and there would be greater likelihood of cooperation over that time.

Even if it's a bullsh1t end date, it would still seem like they're in control. Just imposing and tightening lockdowns, with no expressed confidence in an end date kind of feels like they're just flying by the seat of their pants. Maybe they are... but I'd be happier if I thought they had a handle on it.

[CarinaPDX]

Originally Posted by alansmith

I still can’t make the math work out why our interest rates on treasury bonds and T-bills haven’t climbed over the last years. How are we able to attract Capitol {edit: capital} to finance debt with such poor returns? I am baffled. Any opinions are now being solicited and my ears are all yours.

Agreed, it is baffling. The pundits are claiming that there is a cash shortage right now, and in functioning competitive markets a limited supply and rising demand usually means an increasing price. Clearly the markets are being manipulated, but that is no surprise: that is the job of the Fed (for better or worse). There must be more to it, so any economists that can explain this would be welcome right now.

You are right about the oil. The Saudis have always been able (technically) to turn on and off the spigot without loss, and production costs are tiny. My understanding is that other wells lose capacity when turned off - it would be interesting to know if that is true for fracked wells. At some point we will have to accept Saudi's cartel pricing or they will run us and Russia out of the business. Of course that could be a favor if we simply tax carbon and move on to other power sources. Interesting times...

Greg