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More on the plunge (worst since 1986) in the NFIB small business index: "Something bad happened...
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Tuesday, December 11, 2012, 7:50 AM ETMore on the plunge (worst since 1986) in the NFIB small business index: "Something bad happened in November ... and it wasn't Hurricane Sandy," says the NFIB's Bill Dunkelberg. A "stunning number" of owners expect conditions to worsen over the next 6 months." Note: The NFIB excluded responses from those in Sandy-affected states from the final tally.
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This news story has 23 comments:
"...overall demand is just not there..."
If that's so, then, who's doing all that retail spending, buying all those cars, making all those record corporate revenues and profits?
The trick dealerships are using is they are marking up msrp so when u negotiate lower it is from an inflated msrp price.
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The media always focuses on the underdogs, the "disadvantaged," the unemployed, the foreclosed, the underpaid, etc., ad nauseum. After a while, people start to get the idea that everything is terrible and nobody is doing well. When investors allow this mindset to creep in, they make poor decisions.
Yes, there's the optimism that gets you to survive in the face of adversities, but year after year all we ever get is more government, more regulation, more taxation and fees, and a central planning nightmare that will take years to unravel (or a revolution). Get real.
You should get real.
I am retired. I was both an executive and an entrepreneur, and I come from a long family line of independent business owners. I, also, don't support anything that's going on in Washington, presently, or the trend we've been on for several decades, in fact.
Now, having said that, I don't allow it to cloud my judgment about how the economy is doing, overall, and what the likely consequences for the markets are. It's always self defeating to allow personal pessimism to impact one's outlook, especially when it comes to investing.
Therefore, I am not sure I understand your point. Yes, we both agree that Washington makes life tougher. Does that mean it's the end of the world and everything will fail in short order and one should just hunker down and wait for it? Those that have adopted that view have suffered a severe economic penalty.
My comments are directed toward investing, not running a small business. It's better to make investment decisions based on data, not emotions and political views.
I appreciate your comments and the explanation of your thought process. However, will the small businessman (like my friend the electrician) care to go through the efforts to expand or will he tailor his business plans to what is the least aggravating and settle for business as it is now (or maybe a little less)? If he does (multiplied by tens of thousands), will their lack of new employment opportunities hamper demand? In my seven decades I don't ever recall this much concern on Main Street about what is happening in Washington. When you're tailoring your business plans to changing regulations instead of the change in your customers desires, the historical measurements may not hold. Just trying to keep an open mind and invest accordingly.
As for what is happening here, I think it's pretty clear to those in business that the business cycle will turn down in 2013 whether or not the fiscal cliff is hit. Of course, if it is hit then the defense industry will get it on the chin, but there is strong arguments that the defense industry's level of spending is inefficient and unsustainable. This also goes for most all government spending and is why the deficit is expanding faster than the economy.
btw, the economy seemed to do just fine during Clinton's second term.
In my opinion the dominant political class has determined that the recipe to their election success consists of the money from large capital combined with the votes of the entitlement class. I believe the political class will continue to cater to those groups and govern in what they see as their best interest.