A View from Here

Bill's Sisson's weekly Trade Only blog

Feeling Strapped?

There’s been a lot of buzz in the news lately about the worldwide credit crunch, with reports coming in from the United States, Canada and Europe. Many blame lenders that offered teaser rates designed to entice those with spotty credit or no money for a downpayment.
A few years ago these subprime loans led to a housing boom that helped fuel a booming economy. However, once the adjustable rates from these loans start to climb, borrowers find they don’t have the money to pay their monthly mortgages. Foreclosures are on the rise and lenders are tightening their standards in response.

The fallout has affected everything from home mortgages to car loans to credit card rates. Even Wall Street is cringing at the crunch. Investors are more skittish of preferred stocks because of the fallout from the boom in leveraged buyouts in recent years, according to a report from Investor’s Business Daily.

We’re curious how all this has or will affect the marine industry. Are consumers less willing or able to buy a boat? Are marine lenders tightening their belts as well? Are repossessions on the rise?

Melanie Winters
Associate Editor
Soundings Trade Only


4 comments on “Feeling Strapped?

  1. Nyla Deputy

    People don’t have the money to BUY a boat if they don’t already have one. If they already have one, they can’t afford to use it so to save money, they are trying to get rid of them in record numbers. One thing is for sure, few can afford to move up to a new or larger boat. Many are finding that they have to make the choice between making the payments on their house or making the payment on the boat. Guess which one wins out? My website has a record number of boats listed for sale by owner. All wanting to get out………but nobody is buying, so there is really no getting out.

  2. Gary Briggs

    Housing sales slowdown, stock market jitters, sub-prime loans, and liquidity problems, allow us to whine, if we want to think like we are victims. I have decided not to “sing along”.

    Several real “energy crisises” occured in 70’s with gas lines around the block. That stopped us in our tracks.

    One year from February to June of 197(?), all finance institutions were prohibited from making installment loans, by the Federal Government, for boats and motor homes. Now, that smarted. Selling for cash, only!

    Interest rates at 20%, and more, made profitability impossible, at one point, during the Carter Administration.

    In the early 80’s, Fed Chairman Paul Volker decrlared he would slow the economy until every “buzz saw in the nation” was silenced. Now that created a genuine housing crisis.

    The go-go days of the 80’s came to a screeching halt in “89, as a strong recession knocked us back a few steps. Then congress instituted the luxury tax which took us to our knees.

    Then there was September 11, 2001.

    Yes, sales are difficult now, but nothing like the six crucial periods mentioned above.

    By comparison, today’s market leaves me with the glass at least “half full” and not even close to “half empty”. Deciding not to be “sucked in” by the “hype and sensationalism” in these, not to critical times, will help every dealers year end results. Don’t join the club!

  3. Kurt Sarac

    Let’s Suck less each day and show a STEADY BOOM.
    It has not been nearly as bad as we thought, I see more people buying different TYPES of things, and EACH week it is a flood of new types. New Boat 4 sales in 5 days. My freind a sales manager says ” Were BACK”- I’m thinking I have to go back to the Buffalo Bills super bowl games AGAIN!…. OOOOHHHH >>>> Sales not football yet! …… NO one calling or stopping in for 2.5 weeks.. Wow were back. “WHERE’s THE LOVE MAN ( No freind.. you can no have my Bud Lite). I KNOW THE SECRETE!! Maybe we all should have taken heed that the market is now really in a correction… NO BURST, NOT COLLAPSING, Don’t find the highest building and jump! if your luck is that bad you’ll land in a dumpster, with a colic babies diaper as a hat, and a bottle as an fleet enima clean-out bottle. CHANGE and FIRE non performers. as owner’s, more important to the Mngr’s, Mechanics, Sales Guys.. Not All.. ( Bad ones who should be fired- SAVE your cheap responses of your own guilt- you have been riding this like Seattle Slew)….— Fire the top 1-2 guys and the lowest 10% producers 3 days later. Pull the remainder in a off-site hotel meeting and explain we fired the top guys( IF you think we will not fire you… TRY US!!!), and only in 3 cases I saw they were costing me more than what the team could produce. 3 type of people- Sharks… FIND WAYS TO WIN “FOOD” on mother earth, No-Mo’s… Sell no mo, so will be no mo…. finally Leads sales people, make me sick, they convince the boss the need the put a add on a paper or sit around when the sharks and others are selling-HARD. They are leaches and MUST LEAVE THEY ARE CAUSING THE SLOW DOWN, as thy do not know the industry, Products, and will sell wrong, cost others money, and flood the boating market with young with boats that didn’t fit the needs of the buyer, so he is now busted, and tries to get the boat he needs… Sell him another boat his is upside down on.. but bury-it with the crap the boss, we sold him 2 boat he want to move up in the next year bigger.We suck…. While it may seem a slow down if you… look at the over-all sales in a report, I do not buy it. DO not look at gross sales from catagories,I say look at the sales number excluding in the numbers of the boats solid in the last 5 days of the end of the 2nd Q and the 4th Q compair them to the same period we see now. Everone who know the system pushed sales, sucky sales in the Year end of ’05 and ’06. NOW THEY RUN OUT OF TIME. ” DUDES & DUDETTE’s YOU GOT MORE STOCK THAT WAY, BUT THE STOCK PRICE is worst then the proposed ” Pay your fair share Taxes. MORE TAXES MEAN PEOPLE HAVE NO MONEY- NO MONEY for the G.I. Joe with the kung-foo grip for jr, and the bo-tox for his wife… She AINT letting him by the boat. They have money for it. but we marketed them wrong…”GROW BOATING BUY YOUR DREAM HOME ON THE WATER 360 Degrees of veiw, and it is tax write-off, for you to give rest for mom while she recovers from a beefy booty surgery(or he does, I’m not just saying her.. dont waste the letters). Do Have you have enough usless stock now… no not to retire, pipe dream to start… but buy a parachute, so when you are on the way down from the jump, and you realize that this ALSO was a short-sighted/STUPID Jump… you idiot…. you may not die, and will have more bills!

    Try working differently. Marine industry better start having partnerships with their neigbors. We have more than one location, frankly we planned this year for the worst, Store sales already hit last yearbut sold 10 more then we plan for the whole year. I the cool thing is I think the consumers have seen this with the Gas prices before. Just remember the FEAR the news installed in the people about $5.00 a gallon/shoertages. We needed to get fuel prices up frankly now. Since the next election cycle is sure to bring in BUSINESS “CHAIN SAW MASCRE” thoughts to “pay your fair share”, with a holliwood frair to bring Boat busting “Hillary – Healthcare-. I see this on both parties. Democrates and Republicans. I’m young, but do you remember the times that they work for the CAUSE… Even if they dis-agreed RESPECT came through. While retired from the business craziness, I OWN SEVERAL Marinas, Service Business, and business turn-around Consulting Practace. When a Bank calls me on one of the marine business if it is an old timer, I usually can work with better then the… Well…. business owners a couple years younger than me. The lack of Respect, Duty and Honor. Our business is simple if you have a site off the water it is more impacting, find a partner like us to bring in things so you can have access the ever dying public ramps.

  4. Anonymous Bob

    Dude, what did you say??!! Did you have a point? Did you read your post? Wow!! If you truly own a consulting business, I can imagine that your clients are the ones singing the blues. Oh well…my head is killing me from trying to follow your rant.

    Now, to my thoughts:
    Could it be that consumers are being pinched not by more stringent credit standards, but by the fact they are stretched beyond their financial max? Credit scores are dropping because debt/income and debt/equity ratios are off the risk charts which means creditors aren’t touching those deals with 10-foot poles. Housing values have fallen in most major markets, which has created too many negative equity ownership positions. Those homeowners that used HELOC’s to purchase their dream boats are now upside down on their house AND their boat. OUCH!!! Enough negativity…

    With the proper marketing, dealers can create consumer traffic, yet Spader indicated their dealers were cutting back on advertising. In a down market, that is the worst thing to do. Effective marketing hinges on a consistent and repetitive campaign. Consumers have too many options for their time and money, so marketing of the boating lifestyle is a must, especially in a down market.
    There is no reason the marine industry should not be experiencing growth. Boating is a tremendous outlet for getting rid of the everyday stresses we all encounter. Boating is a tremendous opportunity for family building and bonding. Boating is a tremendous opportunity for building social networks. Boating is a tremendous opportunity for sightseeing that has no land-based comparison. Boating is fun, fun, fun! The industry has to stress these points because that is the lifestyle that boating represents. A suggestion I have for a Grow Boating tagline is: “Memories. Just Add Water”.

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