I read with some amusement many of the post regarding the US Economy, Gas Prices, Rates, and NSNC. A wise man told me that "only the names and the faces change." This same conversation occurred post-dotcom bubble and post 9/11. The only difference is that the names and the faces have changed. The reality is that for most Americans that US is in a recession. Now it has not been declared as we haven't had 2 quarters of negative GDP, but as they say when they officially announce a recession we are in the middle of it or coming out of it.
The Hobby is a discretionary spend item and people will only spend on these items if they have the funds to do so. Unfortunately, most do not have the same amount of funds any more due to the inability to finance a lifestyle with home-equity or the increasing value of your home -- as home prices increased the US savings rate decreased and went from 8% to 0%. This is called an inverse relationship. Real wages are flat the last 5 years even as prices have increased. Large Companies are preparing for major layoffs with the average hobbyist who is in his late 40s/early 50 being affected the most as companies will fire these workers and replace them with younger workers who are less expensive. Unfortunately, Companies can't take advantage of efficiencies and reduce workers during good times because of the negative publicity; so they hold back these decisions to the bad times and do them all at once. Now is a bad time. The dollar is weak, the US deficit has gone in 8 years from a small surplus to a deficit of 2 Trillion dollars, and global equities had their worst first-half performance in 26 years.
The last real recession was in the early 1990. Now this goes to “context” because many people forget about that period. But if you purchased a home in the late 80s in the Northeast you didn't get even for 8-10 years. Or if you got out of college at that time jobs were very hard to find. In my opinion we are in a period of no/slow growth for the next 3-5 years as we have become a nation of debtors and there is no one to finance our spending anymore. Many investors got toasted buying US debt issued instruments.
Many say markets are about fear and greed given human nature. Now we are in the fear stage and people are responding as such by asking for discounts, NCNS, etc. Similar to during the dotcom bubble when providers were raising prices as that was "the market."
The market is a very complex concept as it is not efficient because the markets are run by people who have emotions -- fear and greed. Ultimately, markets do revert to the mean. I have seen providers who post here in the last year raise their prices by 20% only to drop them by 25%. Why? Because of the laws of supply and demand. When the economy is good prices will rise due to S&D as it is hard to negotiate. When the economy is bad prices will fall due to S&D and people will negotiate. The personal dynamics behind this is game theory. Some hobbyist were probably upset when prices where going up and they weren't accommodated. Now as prices are going down they feel the need to get even by negotiating or NCNS.
This will all work itself out. But this is the reality of the world we are now in. You can stick your head in the sand and complain or follow the maxim "don't get mad, don't get even, get ahead." Unfortunately, as Kant said "out of the crooked timber of humanity no straight thing was ever made", so this will take its time as egos and power dynamics are involved.
We should all stop the self-righteous indignation and figure out ways to get ahead as the easy times are over, the stupid money has been lost, and the free money is gone.
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