charjohncarter
Veteran
ian_watt, you are right. I had a brain freeze, it was the upstairs café at the National Gallery and it was Trafalgar Square.
The falling dollar
- Thread starter Olsen
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Olsen
Well-known
The US$ has now reached record low levels and are sold for 5,40 NOK (Norwegian Kroner) and beond € 1,40. It is frightening. This could spell the end of Leica. No wonder they are regarded as very expensive in the US. Do anybody here know how they are doing?
USA is in a crisis. The purchasing power of americans fall even faster than than the dollar. Many of the US lower middle class/working class face huge problems home morgages and consumer debt. - My advice to you guys is; pay down on debt as fast as you can. It will become even worse. Indebting people is a sort of modern slavery. Stay clear.
USA is in a crisis. The purchasing power of americans fall even faster than than the dollar. Many of the US lower middle class/working class face huge problems home morgages and consumer debt. - My advice to you guys is; pay down on debt as fast as you can. It will become even worse. Indebting people is a sort of modern slavery. Stay clear.
mfogiel
Veteran
The price of the Dollar is an economic message akin to that of the price of anything else in the economy, and is supposed and WILL create shifts in economic behaviour which eventually will work in its favour. My LT EURUSD target remains firm at 0.70.
Al Patterson
Ferroequinologist
Olsen said:
It's not as bad as you might think. I know a lot of people with no debt, as they refuse to buy stuff they can't afford to chase their friends who do.
The only thing I owe now is a mortgage. And I only use credit cards for business expenses.
Now I'm not saying all is rosy, but the truth isn't exactly printed in our media these days. You see the bad news, but the good news is back on page 127 next to the obits, and hardly ever seen on TV.
Olsen
Well-known
Al Patterson said:
Al,
What I see is the main stream media - both in Europe and USA, trying to paint a more rosy story than what is actually the reality. The recent drop in both the dollar and the stock market was triggered by the Caterpillar Inc. managers stating that the US economy is “near to, or even in, recession.” Caterpillar Inc. is one of the most successful US exporters 'still alive' in the US and will actually prosper from a low dollar. So, why should they complain? The earth moving part of Volvo, Sweden is going to face tough competition from Caterpillar, - to take one example.
But the US exporters are few and without momentum to turn the dollar fall into a export bonanza for companies and employers alike. So, please tell me about the good news on page 127...
Al Patterson
Ferroequinologist
Olsen said:
Oil is retreating from the recent high, the DOW hasn't gone down below 13,000, and seems to have stabilized after last Friday's drop. Now I have seen that in some states applications for unemployment are up, but yet the total number of people working in the US is near record levels.
Now we do have some serious issues with the subprime loan issue, which may drag the US into a recession, but so far the sources I read aren't calling the US as in a recession. The economy isn't growing as fast as it was, and I'm not sure where it is headed. But I don't see only the reports of "gloom and doom" that you seem to be reading. I even saw a moderately upbeat economic piece in the New York Times.
http://www.nytimes.com/2007/10/21/b...em&ex=1193284800&en=84048106f8fd176e&ei=5087
Although mostly the Times is in the "The Sky is Falling" camp, which is why you should read both the Times AND the Wall Street Journal. If you read only one side of the issue, you might not get the entire picture.
Anyway, we should take this offline or keep it short as Stephen and the mods have done such a good job lately of getting RFF back to photography that I don't want to start another protracted off topic post.
If you have any links to the bad news you mentioned I'd like to see them. I don't have many European news sources bookmarked, as the few US ones plus RFF and some railroad forums take up a lot of my time when I'm on the road.
Photon42
burn the box
colinh said:
Saw your smiley, but if you're interested:
http://www.ubs.com/1/e/ubs_ch/wealth_mgmt_ch/research.html
Prices and Earnings 2006, available in E/F/G/I, I believe.
Rgds
Ivo
Olsen
Well-known
Al Patterson said:
The oil price is still historically very high. Which is a disadvantage for most of USA, - but not all. To the US oil industry it is a great advantage. We should not underestimate the importance of that.
The high employment rate you mention is a good thing. Unemployment could be a good thing too now that the US economy faces a paradigm shift through the low dollar. As long as it does not cause social problems. You will now have a cheap workforce, relatively speaking, of high quality that can be utilized better. All that is to the nation's advantage.
US companies - from Caterpillar to McDonalds - own subsidiaries other places in the world which generate income in foreign currency. Which value is record high, - in dollars. But this money does not benefit the lower middle class/working class of USA. Unless it is invested in industrial capacity within USA.
The bad news is the bank crisis looming, the enormous national debt causing high tax levels for the ordinary tax payer - without providing services back, the lack of democracy - which is the real cause to the problems you are in, uneven distribution of wealth etc.
But we were talking of 'expensive Leica gear' etc.
What I can see is that while we here in the old world get increases in purchasing power - through salary increases - some 50% in 10 years, - some 100% in dollars! I showed links to the local Ford dealer, some months back here in Oslo advertising for car mechanics: They offer 50.000 NOK per month for 'qualified' mechanics. That's 100,000 US$ a year. A result of the over heated norwegian oil economy, many would argue. Sure. But a worker at Ford owned Volvo at Thorslanda, Gothenburg, can make (with overtime, bonuses etc.) the same kind of money making this large Volvo 4-wheel drive. They can't make enough of it. They both have 5 weeks holiday, - by law.
Well, these salaries are 'gross'. Before taxes. Typically, you will have to reduce at least 35 - to 40% depending on social status (wife, children), morgage levels (interest rate is party deductable). Then comes a hefty 20% sales tax on just everything you can touch in a shop. Here in Norway you will have to pay a special car tax doubling the price of the car. Etc.
But for the high taxes we get practically free health care for all, a lavish public pension system (from 62 I would receive 63% of my salary, -more if I wait), education for our kids through both collage and most of university. Etc. Etc.
Al,
All these links I have got from discussion partners, - most americans, here at RFF - which I think is a very sivilized place when discussing these OT issues:
http://www.brillig.com/debt_clock/
http://www.theinternationalforecaster.com/index.php
http://www.spiderednews.com/index.htm
Do I believe that 'the sky will fall down'? - I don't know what to believe...
What is obvious is that 'the party is over' for us here in Europe too, if the US economy is slowing down. As I have tried to point out here many times.
Do I think that the M8 is 'expensive'? Sure, but still afordable. Buying one sets me back with 'well a month's salary'. - It is actually cheaper now in NOK than when I bought mine back in April. Due to the strenghening of NOK towards th Euro!
Still, Leica is (all?) dependant on the US market. If their very loyal US buyers let them down now Leica are in deep trouble.
retow
Well-known
colinh said:
That it is exactly the rootcause of the problem. I.e. Leica glass costing multifold of ZM's, without necessarily being superior - certainly not such extent.
🙄
Are you that guy who is doing those "the sky is falling" radio ads?
This almost qualifies as SPAM Olsen. 😉
That said, I have not made any large purchases recently, there are plenty of nice places in the US to vacation to, and most of the daily household goods I need can be bought at Walmart for cheap.
Report from CT, all is ok for now.
Al, your concerns are justified and appreciated, but honestly, this has probably been the most successful "OT" thread RFF has ever had. I guess this could slide into the abyss, but to now I have been impressed that the conversation has remained civil and to the point. Opinions have been expressed, and everyone has remained respectful of each other.
Thank you all.
http://www.youtube.com/watch?v=SJ_qK4g6ntM
For the real lowdown on the subprime mortgage crisis, I highly recommend this comedy clip 😀
For the real lowdown on the subprime mortgage crisis, I highly recommend this comedy clip 😀
Al Patterson
Ferroequinologist
rover said:
Rover,
Of all the people I have had minor disagreements with, Olsen is one of the few who can argue and remain civil. I think Stephen and the mods have purged those who went over the top quickly.
Al Patterson
Ferroequinologist
Olsen,
I didn't quote your last message as it was rather long. Thanks for the links BTW. I don't think that the Party is over entirely, only that we're all hung over from the last one and not quite ready for a new one. It is possible that in the US at least, once the mortgage banking problem works itself out, and if oil dropped back to under $60 a barrel, that things will pick up again. On thing you notice as you get older is that there are economic cycles, and we are definately not in the boom part of the current cycle.
Regarding taxes, I assume when you state a 20% sales tax you are referring to the VAT used on your side of the pond. Where I live there is no actual sales taxes, but retailers pay a "gross receipts tax", which is hidden in the price like the VAT. The only thing is I can't find the rate of that tax in DE. I'll ask my accountant next time I see him.
I didn't quote your last message as it was rather long. Thanks for the links BTW. I don't think that the Party is over entirely, only that we're all hung over from the last one and not quite ready for a new one. It is possible that in the US at least, once the mortgage banking problem works itself out, and if oil dropped back to under $60 a barrel, that things will pick up again. On thing you notice as you get older is that there are economic cycles, and we are definately not in the boom part of the current cycle.
Regarding taxes, I assume when you state a 20% sales tax you are referring to the VAT used on your side of the pond. Where I live there is no actual sales taxes, but retailers pay a "gross receipts tax", which is hidden in the price like the VAT. The only thing is I can't find the rate of that tax in DE. I'll ask my accountant next time I see him.
cmogi10
Bodhisattva
Soap box man?
EmilGil
Well-known
Al: VAT in Germany is 19% (=16% of the final sale price).
Roger Hicks
Veteran
Hand manufacturing instead of machine; 100% QC instead of batch sampling; hand-lapped focusing mounts; you can see where the money goes if you go to Solms or Oberkochen.
An, as already noted, real social benefits (medical care, unemployment pay, pensions) cost real money. As do decent vacations. No wonder European labour is expensive; no wonder most people who have been employees (NOT entrepreneurs) prefer continental Europe to what the French call 'les Anglo-Saxons'.
Striking a balance between the rights of the employee/individual and the rights of the employer/company is surely what modern democracy is about.
An, as already noted, real social benefits (medical care, unemployment pay, pensions) cost real money. As do decent vacations. No wonder European labour is expensive; no wonder most people who have been employees (NOT entrepreneurs) prefer continental Europe to what the French call 'les Anglo-Saxons'.
Striking a balance between the rights of the employee/individual and the rights of the employer/company is surely what modern democracy is about.
Al Patterson
Ferroequinologist
Roger Hicks said:
One can get used to their time off. I used to get 5 weeks vacation, then the new owners of my former employer layed off a bunch of us. When you have to pay both halves of Social Security, your mediacl benefits, and retirement it gets ugly pretty quick.
I'd move to France or Germany tomorrow if I could A) speak the language and B) get hired...
Olsen
Well-known
retow said:
Except for the fact that german workers do not earn 5 times that of their japanese equaliants. I don't know the specifics for Leica - Cosina, but have seen comparisons between VW- and Toyota-workers where the latter comes out the highest. - This was a few years back and might have changed somewhat with the high Euro. Still, any 5x relation is out of the question.
It is a difference in 'built quality' between Leica and Zeiss. Still that does not explain the large price difference. Other factors might be the cause. As mentioned, it can hardly be labour cost related.
Olsen
Well-known
rover said:
Sure.
My sister's daughter just bought an apartment in Manhattan, New York - Upper East Side, two (or four?) blocks from 1 Avenue. As a sort of investment. One of my customers bought a condo in Florida. By the time they both got to the bank to pay for the stuff the price had fallen 11 - 12%! In NOK. Every weekend planes go packed with norwegians going shopping in New York. Buy 10 pairs of Docker throusers to half the price in Oslo, and the plane fair is covered, they say. Buying 10 shirts too and the Broadway show is practically free. So indeed, more tourism is an advantage of a low dollar.