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Two trillion reasons to be optimistic

A new chapter in American history clocks in at noon on the steps of the nation’s capitol. Barack Obama is our 44th President amid enormous fanfare, eagerness and optimism.

Whether you voted for this President or not, we should all be hoping today marks a solid move away from current circumstances. Indeed, I see there’s already an increase in enthusiasm  – a perception that this New Year will be better. And, perception is people’s reality. 

We should all want this President to realize unprecedented success. The alternative stinks. And, using the bully pulpit to push the positive economic commitments he promised in his campaign would be a good start — demanding actions from Congress that can bolster consumer confidence and stimulate credit markets now.

To that end, kudos to NMMA for ramping up its push for economic support for the boating industry. Painfully, we know too well that consumer credit and dealer floorplan financing are two critical areas for us. NMMA asked Congress for help in both areas. First, by providing that TARP (or TALF) funds be used for a safety net for lenders who do floorplan financing.

Second, that specific requirements be included that banks and non-bank financial institutions, as a condition for receiving any more funds, must provide consumer loans available for all traditional uses on an equitable basis. In other words, for boat loans in addition to auto, education and credit card loans already contemplated.

NMMA is also pushing for the designation of up to $30 billion of TARP funds for a dedicated floorplan lending facility within the SBA. Moreover, you’ll recall President Obama called for a “Nationwide Emergency Lending Facility for Small Businesses” through which SBA could directly lend to small businesses that cannot access other sources of capital. The program, run through the SBA’s Disaster Loan Program, would be available on an expedited basis so firms could meet their operating expenses.

Recently, the Federal Reserve Board announced the creation of the Term Asset-Backed Securities Loan Facility (TALF), a facility that will help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration (SBA). The TALF facility could lend up to $200 billion it was announced last week.

Now, let’s add some things up: $700 billion in TARP funds; $200 billion in TALF; $825 billion in an economic stimulus plan; plus, an estimated $300 billion in available cash consumers don’t have to drop at the gas pump these days.

The way I see it — that’s two-plus trillion reasons to be more optimistic today.

Comments

12 comments on “Two trillion reasons to be optimistic

  1. dave boso

    Higher taxes= fewer boat sales.
    More regulation= fewer places to boat
    Lack of or higher priced gas= use of more oars.
    I see no reason for any optimisum

  2. Dan

    The severe damage done to many consumers investment portfolios has taken away the thought of buying a new boat for awhile. Plus rising unemployment is keeping consumer confidence in the economy low and won’t turnaround anytime soon.

  3. Ken Lamain

    Are you serious? How and where do you think all these $trillions are coming from? They come from our packets in higher taxes and fees. In my opinion, if he succeeds in his plan, it will mark the end of our free market and reward for effort economy. We as Americans did not reach greatness by reaching for the government hand out. I am already looking forward to the next election in 2 years when, hopefully, the general public will have it’s fill of the garbage from Washington and vote for REAL CONSERVATIVES (not John McCain types).

  4. Bob Adkins

    Norm, over optimisim is a major reason that we are in such trouble. Factories continued to demand that dealers over order based on trumped up past data and ignoring that a slow down was actually taking place. This down turn in sales has been going on for two years yet people like you and the factories kept insisting that it was a lack of salesmanship at the dealer level which was causing the drop in retail sales. It is time for us to admit that we were living in a false economy. No matter how much of our future the Government gives away, we are in for a long period of slow sales. You obviously are isolated from what has really taken place a the local retail dealer level. Everyone loves positive people but nobody likes a BS artist

  5. Steve Moore

    In your article yesterday about Industry Predictions for 2009, Equity Research Analyst Hayley B. Wolff stated “The Industry needs a shakeout”. I think we could say the same thing about the banking industry. We certainly are not seeing any bailout for our industry. The boating industry is always left to make due with the best or worse our great capitalism provides. If everyone had to play by the same rules as we do, to suffer the same shakeout, then maybe I could respect her comment. Maybe what the boating industry really needs is some support. I have been in this industry since the early 70′s on both the retail and manufacturing sides and all I have ever seen is boat dealers and boat manufactures getting hammered from the banking industry. They charge the dealers absorbent interest rates for floorplanning and at the same time charge the manufacturers for the pleasure of getting to use their floorplanning for their dealers. These banks make money on every end and in turn the retail financing they provide is either tight or nonexistent as we have now. To have a profitable F&I department, the boat dealer then has to charge higher interest rates which drives the customer to try to get his own financing or to not buy a boat at all. I have seen it time and time again. I don’t know of any other industry which has to overcome so many obstacles to survive, much less be profitable, only to have some beauracrat justify our plight by saying “The Industry just needs a shakeout”. You want optimism, work with us instead of always against us and we will create jobs without a government handout.

  6. Wade N DaWaters

    Look tonight the new messiah will perform his first miracle.
    Curing global warming. He will do this without a tarp
    The proof: We will have a good chance of seeing SNOW FLURRIES in the counties just north of Tampa Fl. The last time that happened I think Carter was president ;-((((
    Maybe I should look into snow machine dealership availability??? now that’s thinking out of the box!

    We do not need trillions of reasons, All we need is one optomistic sign: A new floor plan company would be the best sign for all recreational product manufacturers & dealers . Without one It’s back to ma & pa on a corner with a half dozen units in total.

  7. LARRY RODRIGUEZ

    NORM I HAVE KNOWN YOU FOR MANY YEARS, AND RESPECT YOU STILL, YOU HAVE ALWAYS BEEN AN EXTRAORDINARY MAN, AND IN THE PAST I’VE LEARNED MUCH FROM YOU.
    I CAN’T BELIEVE MY OWN EYES, NEVER MIND MY EARS!!!!!
    I CAN SAY WITH ALL HONESTY THAT NOBODY KNOWS WHAT’S REALLY GOING TO HAPPEN. ALL THE NEWS ARE BAD, WHILE THE HOPES ARE MIXED, AND THE BEAT GOES ON…..
    OPTIMISM IS GOOD, AND JUST BECAUSE THERE’S ENOUGH SNOW UP NORTH THIS WINTER, WE CAN’T ALLOW IT TO CLOUD OUR VISION, ENTER OUR BRAINS, OR WORSE, YET OUR BUTTS.
    WHEN THE NEW MAN SAID, AND LORD KNOWS MANY CHANTED THOSE INFAMOUS WORDS, “CHANGE”, WELL GENTLEMEN, WE ARE ABOUT TO ENTER THAT NEW TWILIGHT ZONE, AND CHANGE WE’RE GONNA GET!
    HOLD ON TIGHT TO YOUR PANTS, MAY THE BEST WIN, (isn’t it always that way?), AND I HAVE THE FEELING THAT WHEN IT’S ALL SAID AND DONE, ONLY A FEW WILL BE STANDING.
    PERHAPS THIS WILL BE GOOD, PERHAPS NOT. SHORT OF A MIRACLE, I DON’T KNOW WHAT WILL WORK.
    MY BIGGEST FEARS ARE STILL WITH THE FACT THAT IF HISTORY HAS A TENDENCY TO REPEAT IT SELF, AND THE LAST TIME WHAT BAILED US OUT WAS WWII……………WELL I SURE HOPE WE ARE NOT HOPING FOR THAT KIND OF SOLUTION, OR AT LEAST GOTTEN SMARTER TO KNOW BETTER.
    MAYBE SAILBOATS WILL GET CHEAPER, AND WILL BECOME POPULAR AGAIN, NOW THERE’S A THOUGHT!

  8. Joel Shine

    “NMMA is also pushing for the designation of up to $30 billion of TARP funds for a dedicated floorplan lending facility within the SBA”

    Get in line for the cheese boys and girls. Floorplan lending by the government is such an awful use of tax dollars I do not even know where to begin. Talk about a narrow special interest.

    That being said, you cant stand in the way of $2 trillion, something will come of it. Best case, re-inflate asset bubbles. Worse case, inflation and collapse of the dollar.

    Hope and Change!!!

  9. Lenny Foye

    I am optimistic that the week of Feb. 9th through the 15th, Miami Boat Show, we will see some positive signs and enough confidence in the new President and the economy that new boat orders will be placed. I have been in this industry since 1979, after ten years in the Navy, and have just about seen it all that has been thrown at it and this past year is the worst. If Miami Show does not bring on some positives to this industry then I guess I will be forced to look for employment with a small business contractor as a Flagman, too old for a pick and shovel, on a new road/bridge building crew.

  10. Arch

    Anybody who things the $2 trillion in stimulus is good for America is either ignorant or naive.
    It is a FACT that it’s bad for America. The gov’t knows it’s bad too, but they have no choice. In the short term, it’s worst NOT to inject the $, but either way, it’s a BAD BAD thing.

    Here is the funny part, what got us into this trouble is people spending too much, now the govt (whom we rely on in times of trouble) is doing the same thing.

  11. arch

    If you knew what that $2 TRILLION DOLLARS was going to do to this country, your title would have been…..
    TWO TRILLION REASONS TO BE PESSIMISTIC.

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