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[hard10]

From FOX News:
"“This country’s economy is still mired in a recession and the risks to inflation are nonexistent. The Fed will cut as necessary,” predicted John Lonski, chief economist at Moody’s Investor Service.

The move by Fed Chairman Ben Bernanke and his colleagues cut the federal funds rate -- the overnight rate at which banks loan to one another -- to its lowest level in four years. The rate now stands at 1%.

Despite an 889-point surge by the stock market on Tuesday, gloomy economic news continues to darken the financial landscape and point toward a recession.

A widely watched index showed that consumer confidence has fallen to its lowest level on record. The Conference Board reported on Tuesday that its index dropped to 38 in October, from 61.4 in September. Shaken consumer confidence will very likely translate into slower sales at U.S. retail stores, a bad omen for the upcoming holiday shopping season."

I wonder how this will effect the Christmas shopping season? In particular, I wonder how it will effect the motorcycle aspect of it. My local HD Dealership is having a big sale this weekend. It always seems that a HD Dealership does well despite the economic downturn.

[sportygordy]

I don't think we will see a significant reduction in loan interest rates. The feds can do all they want, but if the lending side does not react, what good is it.. All this is going to do is help the banks recover. These rate reductions will be interesting to see how it helps us consumers

[RJ749]

I don't think we will see a significant reduction in loan interest rates. The feds can do all they want, but if the lending side does not react, what good is it.. All this is going to do is help the banks recover. These rate reductions will be interesting to see how it helps us consumers

It's going to help the banks and customers like car dealers and large retailers that hold inventory at a cost which will allow them to keep people employed which will allow those people to consume and become more confident in the system after we get past the current economic and political turmoil.

Granted it will take time, but the rates are being passed through or at least at a minimum allowing rates to stay as low as they currently are.

One month libor for the past year:
                                 Today    1 month ago     1 yr ago
1 Month LIBOR Rate        3.17          3.93              4.72

No question we have a long way to go but I have already seen movement in the banks willingness to loan on cars.

[hard10]

It's going to help the banks and customers like car dealers and large retailers that hold inventory at a cost which will allow them to keep people employed which will allow those people to consume and become more confident in the system after we get past the current economic and political turmoil.

Granted it will take time, but the rates are being passed through or at least at a minimum allowing rates to stay as low as they currently are.

One month libor for the past year:
                                 Today    1 month ago     1 yr ago
1 Month LIBOR Rate        3.17          3.93              4.72

No question we have a long way to go but I have already seen movement in the banks willingness to loan on cars.

Last night's news ran a story that 600 new car dealerships had already closed and up to 2000 were in jeopardy. That translated to 70,000 people in the auto dealership industry that would be without jobs. I'm sure the 2k number is exaggerated but it is still a lot of people in one industry.

[RJ749]

Last night's news ran a story that 600 new car dealerships had already closed and up to 2000 were in jeopardy. That translated to 70,000 people in the auto dealership industry that would be without jobs. I'm sure the 2k number is exaggerated but it is still a lot of people in one industry.

I know our industry is hard hit by the current turmoil.  The big Three aren't anymore.  The Big 3 for years have told dealers that they needed to merge selling territories or face insurmountable losses in the future, there are too many dealers.

Well, that time is here, the Seattle area "lost" 4 Dodge dealerships in the last month.

Let me define "lost" however, yes there are 4 empty buildings, but there is only one area that truly lost a Dodge store.  The other three transferred to the neighboring Chrysler/Jeep dealer along with many of the employees.  The commercial property will need to be sold, but in most cases the land is valued at huge multiples of what it was purchaed for.  Many of the lots are in prime locations for other purposes.  The land will sell.

These figures are lost on the news, that wouldn't be news if 4 dealerships weren't lost.  One dealer closing isn't nearly as dramatic. 

There were certainly too many franchises out there and yes there will be fewer, but the buying public will be better off in the future because more sound businesses will evolve, more solvent, most likely the guy in town that was the better dealer at more levels of his operation.

If Harley had three dealerships in the same geographic area as they currently have one, there would be Harley stores closing as well. 

It is sad to see businesses closing, but the writing was on the wall many years ago (too many domestic dealerships) and no one was willing to do anything about it.  Now the current financial crisis at the banks cause the lenders to tighten up and the dealer operators that aren't able to meet the tighter debt to equity standards are going away.

The free market has spoken in those cases and those operators have bet on the wrong horse.

[hard10]

...The Big 3 for years have told dealers that they needed to merge selling territories or face insurmountable losses in the future, there are too many dealers...

There were certainly too many franchises out there and yes there will be fewer, but the buying public will be better off in the future because more sound businesses will evolve, more solvent, most likely the guy in town that was the better dealer at more levels of his operation.

If Harley had three dealerships in the same geographic area as they currently have one, there would be Harley stores closing as well...

The free market has spoken in those cases and those operators have bet on the wrong horse.

Well, it sounds like the market has spoken. I have always been amazed how dealerships could sell so close to each other. Usually it has been the consumer that has benefited through price competition. The problem now is the buying public has become accustom to having that competition and will expect the lower prices to continue. The factories wanted to sell more product and didn't care how it was done. If there were 4 dealers in a given geographic area, that meant 4 times the selling opportunity. Now that there is only one, he will have to raise prices to meet the demands of business, not necessarily increase profits.

[RJ749]

Well, it sounds like the market has spoken. I have always been amazed how dealerships could sell so close to each other. Usually it has been the consumer that has benefited through price competition. The problem now is the buying public has become accustom to having that competition and will expect the lower prices to continue. The factories wanted to sell more product and didn't care how it was done. If there were 4 dealers in a given geographic area, that meant 4 times the selling opportunity. Now that there is only one, he will have to raise prices to meet the demands of business, not necessarily increase profits.

For years I have sold and explained to customers why I couldn't give them the $15,000.00 (slight exaggeration) off that dealer B was offering, my explanation has always been simple, "You'd like me to be here to service your vehicle when you need it wouldn't you?"

Well, I guess some folks can now see the folly of the old way of doing things.  At least I'll be here for them, even though they may have bought elsewhere.

As to the pricing, if everyone bought at the price posted on the window, a dealer wouldn't have a problem staying in business.

You don't ask the grocer for a discount on the eggs and bread or the gas station for one on the gas.  Well, I know it won't happen but I also know that I will be able to find a price that my customer and I can live with in harmony as I have for 23 years now.

[icybay]

I will be able to find a price that my customer and I can live with in harmony as I have for 23 years now.

I hope this means you are going to sell me that R8 for 75K now?

[RJ749]

I hope this means you are going to sell me that R8 for 75K now?

Not a problem, where do I send the car and the payment book for the balance?