Warren Buffett says we are in a recession. The financial media will not say so as they do not want your dollars to stop flowing in to the markets. The question may be better put: Is there are recession in your area?
A drive out to Kings Island Amusement Park just north of Cincinnati, Ohio would indicate a big NO! But there could be other factors involved. We went to the park just last Saturday to find that no matter what vehicle entrance you entered, the park was wall-to-wall cars. You would have been directed to the far end of the property which is a green zone of grass just before the property ends. One reason may have been that part of the truck/bus parking lot was closed for the Robbie Knievel event (see below). But this lot is seldom seen by most park goers. Still, maybe this was the reason.
Then as we approached the park entrance we saw a continuous line of people that stretched 1,068 feet. I say
The park is owned by Cedar Fair (FUN
If you have not been to an amusement park in several years, you'll should not be surprised at the cost of games and souvenirs. Most carnie type games cost $5 a pop. Course any parent would let their children know ahead of arrival that games and souvenirs are off limits if they want to reap the value of a close to home family outing. Parks easily recoup any special discounts to draw them to the park when these same people start playing games.
If amusement parks are the answer to recession, perhaps FUN would be a stock to trade for the summer season. Not only does it operate the mass of roller coasters and stage shows but it also has six water parks.
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Having lived a long life; been and is successful...I feel that a man such as Warren Buffett deserves to be normal and make mistakes like every normal guy.
ReplyDeleteHowever, living his life, traveling the world, being in this business, I would expect him to be honest now in his dealings.
I believe he compared the big slow down at the end of the year and start of this as a recessionary sign. Reported truth in numbers however aren't the continual desired dominion of this government. They've ignored or, they've pressured for the reports that serve their purpose. While I like to look through rose colored glasses as much as the next guy, it only begs to be led blindly.
However, to each his own opinion and thank goodness for the internet were everyone can have their say!
I don't see that we are in the bowels of recession but I do think that regardless of the definition, we are in an obvious slowing of the economy.
This quote came tonight from Tobin Smith:
ReplyDelete"The debate will rage on for the next few weeks about whether we are "officially" in a recession in the United States, but let's get real. We can see that consumers are anxious based on today's University of Michigan Consumer Confidence report, which showed the index registering its lowest reading in 28 years. And despite the benign core inflation numbers, it's hard to sell the feds' low-inflation story to real people who buy things like, well, gasoline and food."
As reported by Bloomberg.com
The Reuters/University of Michigan final index of consumer sentiment decreased to 59.8, the weakest reading since June 1980, from 62.6 in April. The measure averaged 85.6 in 2007.
Consumer spending that makes up two-thirds of the economy is cooling as record fuel costs and a weakening job market undermine household buying power. Declining home prices and tighter credit are weighing further on growth, pushing the economy to the brink of a recession.
``There was practically unanimous agreement among consumers that the economy is in a recession, which is interesting since there is still a raging debate among economists about whether the economy is actually declining,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut.
The confidence index was forecast to fall to 59.5, according to the median of 57 economists surveyed by Bloomberg News. Estimates ranged from 50 to 63. The preliminary survey, released May 16, came in at 59.5.
Earlier today, the Commerce Department in Washington reported that consumer spending rose 0.2 percent in April after a 0.4 percent increase in March. Incomes grew 0.2 percent, bolstered in part by the government's tax rebates, and the Federal Reserve's preferred measure of inflation moderated, the report showed.
Business Activity
Also today, the National Association of Purchasing Management-Chicago said its measure of U.S. business activity in May showed contraction for a fourth straight month as production decreased and costs rose. The NAPM-Chicago index rose to 49.1 this month, higher than forecast, from 48.3 in April. Figures lower than 50 signal contraction.
The Reuters/University of Michigan's index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, fell to 51.1, the lowest since October 1990, from 53.3 a month earlier.
Its gauge of current conditions, which reflects Americans' perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, decreased to 73.3 from 77 in April.
Surging fuel and food costs have Americans reeling. Regular unleaded gasoline prices reached a record $3.96 a gallon at the pump yesterday, and have jumped 30 percent since the start of the year, according to AAA.
Inflation Expectations
Americans are bracing for more price gains. Consumers said they expect an inflation rate of 5.2 percent over the next 12 months, compared with 4.8 percent in the April survey, according to the survey. Longer-term, Americans projected prices would increase 3.4 percent, up from a 3.2 percent estimate last month, the survey showed.
The final Reuters/University of Michigan consumer confidence report reflects about 500 responses, compared with 300 households for the preliminary survey.
Consumer spending will probably rise at a 0.5 percent annual pace in the April-to-June period, the smallest gain since the fourth quarter of 1991, according to the median estimate of economists surveyed by Bloomberg News earlier this month.
The economy will probably expand at a 0.1 percent pace this quarter, the least since 2001, according to the survey median.
The job market is the weakest since 2003. The economy lost 20,000 jobs in April, for a total of 260,000 jobs lost in the first four months of the year, according to the Labor Department.
Credit Access
Credit also is getting harder to obtain, undermining demand for items with bigger price tags. Industry figures showed cars and light trucks sold at an annual pace of 14.4 million in April, the fewest in almost a decade.
Sales of light consumer goods are also hurting. Target Corp., the second-biggest discount retailer, on May 20 said profit fell for the third straight quarter as consumers cut back on purchases of clothing and home furnishings.
``The consumer is very cash-strapped right now and is looking for good values, is expecting more sale merchandise,'' Chief Executive Officer Gregg Steinhafel said on a conference call.