IS the Economy that bad?


timcantwell

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Lamborghini is optimistic about the U.S. economy. This article appeared in CNBC.com this morning as a report from the L.A. auto show. Check it out:

http://www.cnbc.com/id/21830518i
 

STORMCAT

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May 25, 2006
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Lamborghini is optimistic about the U.S. economy. This article appeared in CNBC.com this morning as a report from the L.A. auto show. Check it out:

http://www.cnbc.com/id/21830518i

We'll I'm,, tending bar at night for extra $$$.......:biggrin..:biggrin
 

S592R

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Tim .... DEAD LINK ALERT!!!! :eek:eek:eek:eek:eek
 

AJB

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Jun 28, 2006
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Bad in Michigan. My tenants are struggling to meet paymnets, Jennifer (Governor) has just raised our taxes and we hold the honor of the highest unemployment rate in the nation.
Looking at relocating to Pennsylvania...lower income taxes and NO taxes on Pension income...
AJB
 

shelbyelite

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May 10, 2007
1
Here is the CORRECT LINK.....
http://www.cnbc.com/id/21830518
 

SYCO GT

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Sep 9, 2006
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Had lunch with some bank execs and real estate developers on Wednesday. They have observed a strong decline in Orange County housing sales in the $600K - $700K and below range, (i.e. entry level for much of OC) but allegedly have not yet witnessed a slow down in home transactions over $2MM. In some of the outlying markets, newly constructed homes have gone for deep discounts in an attempt to stimulate demand in areas where economic growth has slowly or halted altogether.

Personally, I think the slowdown will soon impact even the buying habits of those with high disposable incomes. It just takes a little longer for the cycle to hit.

I'm no Ben Bernanke, but my take on the article is that Lamborghini is optimistic about their ability to find 2,400 buyers (or 20 in the case of the Reventon) for their ultra high end luxury goods within a backdrop of a struggling US economy. Additionally, note that there is no further short term expansion planned for their dealerships. Speculation, but this could just be posturing by their CEO in an attempt to ensure that insecure high net worth buyers don't start dropping off or backing out of their deposits and orders.
 
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427Aggie

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Aug 18, 2005
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Frisco, Tx
I'll give you what I see. Banks are not lending on commercial property. The stuff you see going up that everyone reports as "Strong Commercial Building" was started and committed to over a year ago.

The CMBS market is dead...I have heard several instances of 2B traunches being bought back by the banks because they can't sell them...these have to stay on their books. We don't think loans will clear up till march for commerical. Lenders for construction now want 40% equity for deals which is great for me because developers can't find Country Club money for 15-20M on one deal..

Homes here in Dallas in the 600-1.5M range aren't moving. $2M and up are going fine. THis crunch is far from over and its about to get worse..hold on.

Matt
 

SYCO GT

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We're not inclined to develop anything short term, when it is reaching the point where we can purchase recently completed or soon to be completed commercial and residential projects at below what it would cost for us to purchase the land and construct ourselves. Not to mention carrying costs during development timeframe. Should be an interesting next 2 years...
 

timcantwell

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Lamborghini Text

Thanks Steve for pointing out the link problem. Here's the text:



Italian super car maker Lamborghini is on track for record sales in 2007 and sees no threat from a stronger euro or a downturn in the U.S. economy, the company's chief executive said on Thursday.

Lamborghini, a unit of Volkswagen's Audi, expects to sell 2,400 of its hand-made vehicles in 2007, up 15 percent from 2006, the company said.

The Italian car maker offered the sales projection at the Los Angeles auto show, where it showed off its $1.5 million Reventon, the most expensive car it has ever built.

Lamborghini will make only 20 of the super-sleek Reventon models and sold out that limited run in less than a week.

Eleven of the 20 vehicles were sold in the United States and five of those in California, the biggest single market for Lamborghini, Chief Executive Stephan Winkelmann told Reuters.

No Sign of US Crisis

Winkelmann said he has seen no sign that the slump in the once high-flying California real estate market was hurting demand for Lamborghini, which competes with the likes of Ferrari in speed and exclusivity.

"So far we have not seen any sign that there is a crisis," Winkelmann said. The stronger euro has also not cost Lamborghini sales in the United States, although the company has not raised pricing to reflect the weaker dollar, he said.

"It's clearly affecting our profitability but it has not kept us from making sales in the United States," he said.

Even if an economic recession in the U.S. market began to hurt demand for luxury goods, Lamborghini would be shielded by its 12-month backlog of customer orders, Winkelmann said.

The United States accounts for about 40 percent of the brand's sales. California represents over a quarter of sales.

Expansion Nearing End

Winkelmann, who has spearheaded an increase in Lamborghini's dealer network since becoming CEO in 2004, said that planned expansion was nearing its end.

Lamborghini will end the year with about 110 dealers, up from 65 in 2005, he said. The company's largest dealership is in Orange County, just south of Los Angeles.

Winkelmann said Lamborghini could add another 20 dealerships in the coming years. "For the time being, I don't see the need for higher numbers," he said.

As it slows the growth in showrooms, Lamborghini will look for revenue growth in areas outside auto sales, including licensing and arranging tours and driving academies for groups of its loyal owners, Winkelmann said.

"As a manufacturer, you have to add value, but the first rule for us is not to dilute the value of the brand," he said. "We are in the luxury business -- with all of the complexity of the auto business."
 

timcantwell

Le Mans 2010 Sponsor * Moderator
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Jan 22, 2006
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N.E. OH & Naples, FL
Had lunch with some bank execs and real estate developers on Wednesday. They have observed a strong decline in Orange County housing sales in the $600K - $700K and below range, (i.e. entry level for much of OC) but allegedly have not yet witnessed a slow down in home transactions over $2MM. In some of the outlying markets, newly constructed homes have gone for deep discounts in an attempt to stimulate demand in areas where economic growth has slowly or halted altogether.

Personally, I think the slowdown will soon impact even the buying habits of those with high disposable incomes. It just takes a little longer for the cycle to hit.

I'm no Ben Bernanke, but my take on the article is that Lamborghini is optimistic about their ability to find 2,400 buyers (or 20 in the case of the Reventon) for their ultra high end luxury goods within a backdrop of a struggling US economy. Additionally, note that there is no further short term expansion planned for their dealerships. Speculation, but this could just be posturing by their CEO in an attempt to ensure that insecure high net worth buyers don't start dropping off or backing out of their deposits and orders.

Thanks for your observations, you may be correct.
 

FlorIdaho Chris

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We haven't seen anything yet. The real estate bubble has burst and will affect all real estate values. There are many developers and owners out there that are broke and don't know it yet. It is going to get much much worse before it gets better.

Another but related note, the boat business in South Florida has never been weaker in 30+ years. This trend does not bode well for any discretionary luxury items.

I hate to say it but IMHO we are headed for a hard landing.
 

S592R

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Chris,

"a hard landing" ... remind me of that if I ever fly with you.

hard landing ..... 250 mph straight into a brick wall ... :biggrin

here in the midwest the locals are all talking about the cost of gas. since there is no public transportation here some have resorted to buying gas and not eating lunch. Or so was the topic of the cashiers at Lowes the other day.

cost of living is needing to adjust for most of the folks in this area but without decent business prospects that is not going to happen. Recession ... depression ... what ever someone wants to call it .. its not good for any incumbent coming into an election cycle. So after the Demo's land slide ... its only going to get worse. at least in my humble opinion.

Building a bunker here ... at least financially ... going to sit out the storm for the next few years and then come out for the investment surge at that time.

which I think is what most of us are going to do.

S
 

KMCBOSS

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According to the democrates, the problem rest squarely with the Presidents' "failed" economic policy, "failed" administration and "failed" presidency!
 

OCPETE

GT Owner
Nov 20, 2006
490
Killer Dana, CA
Election cycle on steroids :lol

75% chance of "recession"

Middle class is disappearing..

Corruption is now more apparent than ever in our blessed society, (I see it everyday in 1 particular major corporation :lol) frickin lawless.

This group is lucky enough to generally scoff at petrol prices for our non daily driver luxuries...

Life is short..DRIVE HARD :thumbsup
 

BlackICE

GT Owner
Nov 2, 2005
1,416
SF Bay Area in California
According to the democrates, the problem rest squarely with the Presidents' "failed" economic policy, "failed" administration and "failed" presidency!

Unfortunately the Demos will probably win the presidency, and hold the house and senate. Then everyone, will see what a really bad economy looks like. Then the Demos can take all of the credit, with no one to blame.
 

junior

GT Owner
Mar 9, 2007
1,151
So Cal
We'll I'm,, tending bar at night for extra $$$.......:biggrin..:biggrin

I'll have mine shaken, not stirred :lol
 

B O N Y

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Sep 5, 2005
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Fresno, Ca.
Yup...thing turning to crapola... In the real estate market.

Meanwhile the great restaurants have more butts than seats,..

Tough times here in Palm Desert at Ristorante Mama Gina... Waited 30 minutes for a table...

Remember shake gin and vodka and only stir your MAKERS MARK! :)
 
Aug 25, 2006
4,436
The cycle of life; has it ever changed?

The smart money resides with the person that occasionally gets off the train and simply watches for awhile rather than attempting to fight their way through.

This remains true whether one plays in the up or downside economy; it is playing both that can drain you both financially and emotionally

As for whether Dem or Rep; for far to long ago the colors black and white became gray as such all appear the same to me

Shadowman
 

B O N Y

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Well said Bill... My days of going long and short are over...
My portfolio is fully invested and well diversfied :)