(Spokane, WA) Hardly robust would be a nice way of “narrating” the latest Durable Goods report out this morning:
New Orders
New orders for manufactured durable goods in May
decreased $4.1 billion or 1.8 percent to $228.9 billion,
the U.S. Census Bureau announced today. This
decrease, down three of the last four months, followed a
1.5 percent April decrease. Excluding transportation,
new orders increased 0.5 percent. Excluding defense,
new orders decreased 2.1 percent.
Transportation equipment, also down three of the last
four months, drove the decrease, $4.9 billion or 6.4
percent to $71.7 billion.
Shipments
Shipments of manufactured durable goods in May,
down four of the last five months, decreased $0.2 billion
or 0.1 percent to $239.9 billion. This followed a 0.2
percent April decrease.
Transportation equipment, also down four of the last
five months, drove the decrease, $0.7 billion or 0.9
percent to $76.7 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in
May, down five of the last six months, decreased $5.7
billion or 0.5 percent to $1,195.5 billion. This followed
a 0.2 percent April decrease.
Transportation equipment, also down five of the last six
months, led the decrease, $5.1 billion or 0.6 percent to
$798.8 billion.
Despite this, the market looks to tack on another 40-points onto the Dow. My, ain’t denial a useful thing?
No doubt, somewhat driven by the idea that there will be plenty of additional oomph for stock prices when some of the money comes out of the bond market when the fed goes raising. Not to be confused with raisin…
Trade Crap: Buyer’s Remorse
I tend to look at every headline that comes along as though my mantra (“Everything’s a Business Model”) is an inviolable rule of the Universe.
So, when comes to the analysis of sales, the sales process, and sales technique, I am a rabid, screaming, fundamentalist.
There are five stages to sales:
Prospecting: Find the buyer
Qualifying: Do they have purchasing authority?
Demonstrating: Show off the benefits and features.
Overcome Objections: Customers always ask.
Close: Get ‘em to sign on the bottom line.
President Obama, in case you haven’t noticed, really sucks when it comes to sales technique.
Take this trade bill, nonsense.
Obama’s approach is like the white-patent shoe, plaid pants, fast-talker who will put you into the ride of their choice, not yours.
On the flip side – where the real money and high reputations live – is the consultative sale.
In this process, you carefully explain every detail of what you’re selling. Ask how the prospect feels, answer questions with facts, not hyperbole, and in the case of software sales, you set up benchmarks and metrics to make sure the implementation team is doing exactly what (and how) the customer wants.
That’s not Obama’s style.
He’s shouting from the rooftops that “We need this trade bill…it’s an emergency and we need it secret and we need it yesterday.
Well, hold up.
That’s a little too “pushy used car salesman-ish” for thinking customers.
And Obama’s big-shotting tactics sound like a rhyme off “Kid I know what I’m doing, I’ve been in the car business now for six and a half years…”
Now, potential customers are turning on him.
Senator Jeff Sessions is issuing a final warning to the the used car lot flim-flammer.
And presidential wannabe Ted Cruz says the obvious when he bemoans that the used-car salesman’s pitch is countered by information you can find on the Internet. Not that members of either chamber are inclined to read, listen to their constituents (I know Jeb Hensarling on the House side is hard of hearing home district opinions) and yes, lobbyist money means 600 Fat Cat execs got access to the dirty secrets while a former US Labor Secretary was turned down.
But let’s leave that aside.
The point this morning is a lesson in sales and this a paper on how not to do it.
Would you buy a home with no inspections? Hell no.
Would you buy a used car without an independent mechanic evaluation? Hell no.
Would you buy foreign raised beef if it was labeled? Hell no. Oh wait, corporations stole that back. Thanks to Hensarling and his ilk, country of origin labels are gone… Instead of telling the WTO Cabal to piss off, the republicorps caved…like they’re doing on trade (again), but you get the idea.
This ain’t democracy and it’s not about right,, so much as it’s about money. Getting yours.
As luck would have it, few remember the last lemon (NAFTA)..but believe me, this has the look and feel of a used car which we’ll regret forever buying.
But the people who sold it? They’re taking us to the cleaners, once again.
And any republican who votes for this corporate slam-duck might as well change parties now because they all belong to the CORPORATE PARTY which operates two shill subsidiaries. And they sell a lot of lemons.
One of which is working with Cartel Country (Mexico) to overtake Russia as a world power.
With people like John Boehner around, who needs al Qaida?
Auto sales professionals who sell features and benefits (and what’s right for the buyer) are given a bad name by the fly-by-nighters who desk deals that drive the poor to desperation. Like, oh, you know who is doing on trade.
California Stinks
Yes, personal hygiene is going by the wayside because of the drought.
And you think I am kidding when I tell you that in two years, California’s real estate collapse in the wings will be the modern Depression analog to the Great Depression Arkies and Okies from the Dust Bowl?
I smell a rat…no, that’s a Californian. Victims of History who are fixated on selfies instead of sense.
Hillary To Lose
So writes Salon.com over here.
I think the saying is “Your lips to God’s ears…”
Unfortunately, President Clinton II is already (financially) a slam dunk. She’s buying it…and I’m disappointed the Salon article didn’t go into how money buys anything. Votes, endorsements, Trade bills, yada, yada…
Bike Quakes Due
Massive solar storm has pushed electrical interference up to near record levels.
That often means quakes within days…let’s see how it plays, but be ready.
George,
My personal hygiene is just fine out here in California. I am not sure what you guys are reading out there in the hinterlands of America, but it’s business as usual in the Bay Area and beyond. While there is the occasional article in the paper about the drought…so far, nobody has felt the effects at least in our metro of 8 million. Grass in our parks and yards are still green, they still serve water at restaurants, showers are still a daily routine…No water rationing edicts have been passed down…maybe in the rural desert there have been some issues…I have heard some of the wealthier communities have been asked to dial down the water usage…but in the populated metros…nothing yet. Maybe that will change…I don’t know…It is a topic of conversation, but it is nearly July…You would think if it was that serious, it would have taken effect by now.
Second…Real Estate will NOT crash out here in two years…At least in the Bay Area…I have seen a few California crashes…one caused by a natural disaster, another caused by dot com’s putting the cart before the horse and the other, bank stupidity in 2008. While prices here in the Bay Area are crazy, with homes sales averaging a million dollars in the Silicon Valley, I don’t see it retracting. The valley has found the formula. We are innovation central…the engine of America.
What drives our engine are the culturally defiant initiatives like disruption, the Internet of Things or in colloquial jargon, “Thingfication”…All intended to change the way we live almost every aspect of our lives.
My near perfect home for the past 16 years has changed the way we transact our finances, conduct business from every discipline, educate our children, treat illnesses (Leader In bio-tech), communicate, play games, buy and listen to music, watch and pick TV & movies, rate and make reservations for restaurants, travel, buy and drive cars, heat and cool our homes, track and read our news, participate in politics and so much more.
As a result of our constant and never ending innovation, many of the tech companies have grown exponentially, and now have the highest valuations of any corporations nationwide.
More important, that growth brings in jobs…great paying jobs…complete with stock options…There is no sign of struggling here like in many rust belt metros. Unemployment in many communities in the Valley are well below 4%. Some 85,000 jobs have been created in just the past few years, and that job number continues to grow in a Moore’s Law like fashion. More impressively, the regions economy would rank 19th in the world if it were a nation.
And, those employees that have those jobs, are highly skilled, highly paid employees that are part of OUR culture now…Jobs equal stability…Stability equals compounding wealth…Compounding wealth needs an outlet to spend that wealth and home buying is one of those. Just take a a look at our dearth of home inventory today and they all seem to be buying homes all at once.
It’s this increased demand from high net worth individuals that are driving our prices up, engulfing our available inventory and posting our average home sales prices to a million dollars and rising.
Is this a bubble? Well, a bubble is a thin skinned, penetrable object that bursts. Economic bubbles happen when asset prices appear to be based on implausible or inconsistent views about the future. 2006-2008 was a bubble/crash event because it existed based on implausible financial instruments luring people into loans they could not pay back….which many didn’t… and the real estate market crashed from excess inventory caused by loan defaults.
Today, the home buying buying is as robust as it was in the mid 2000’s, but…so is the financial net worth of the buyers. With innovations in technology being steadily invented here everyday and our nations appetite for more of the next big thing, job growth may slow down to a flatline in the future, but not enough to put a strain on real estate.
One notable trend, 30% of transactions the past year were all cash buyers. The remainder are conventional loans with 20-50% or more down and a market infused equity gain that makes that loan to value gap grow each day. It’s nearly impossible to default on a loan when you have plenty of equity or owe nothing altogether.
So, today, the Bay Area is experiencing via economic growth, what New York experienced in the mid to late part of the 20th century. The Big Apple had a decades long run as the most expensive place to live in the U.S…Now, that belongs to San Francisco. And, while we don’t come close to matching New York’s culture, fashion and theater scene…our substitute for that is our beautiful weather, gorgeous geography, diversity and quirkiness. That is our driver…It’s what has made Stanford the new “it” school according to the New York Times…more desirable than Harvard. And those Stanford grads are staying here…lured by that weather and the robust job market.
It’s the place to be…and the proof is in the home buying activity…Why would someone want to pay $1.3 million dollars for a 3 bedroom, 2 1.2 bath, 1700 sq ft home? Many of my clients answer that question really fast…Because they can…They undeniably love it here, they feel safe in their career, they can afford it and THAT ALONE makes buying a home here totally worth it to them. Yes, like New York, our homes are smaller for the price than other parts of the country, and to outsiders that may seem like a sacrifice…but, the rest of us see it as a privilege just to live here….All 8 million+ of us.
well…now i see how big daddy is doing…i live in austin and we are on our way to being your adopted teenager….there is no housing under $250k within 8 miles circle of the downtown sector unless you want to live in a 500 sq. foot condo/apt/conversion.
In our old neighborhood, our average 1950’s home is 1600 square feet and one just went for sale for $428,000….course 2 miles from downtown is tarrytown and they are in the millions you talk about and plus those plush new elite condo suites at the top of the condo pile start out in the 1 million plus range….
Basically….if you make the big bucks, you can afford the payment or the plunking down of millions for a home..my biggest concern is 10 to 20 years from now…when you try to sell, and there isn’t any one to sell to…we are importing lots of lesser paid workers (engineers in all fields) who might have to save a long time to afford those kind of professional prices…but hey…the world is changing every second and the usa is open territory…the chinese are coming and they all have tons of money, so do the indians…so i guess it is a silly worry wondering how high and how long those housing prices are gonna go.
The plane, the plane boss, welcome to fantasy island.
how about Chinese buyers in the Bay Area paying $150k over asking price (however house was awarded to a family raiser (who still paid the extra $150k, not the Chinese buyers since neighborhood preferred the family not the Airbnb gold diggers…)