What Recession? (3 Viewers)

Well, Damian, I suppose there are several possible explanations:

1) There are always exceptions to any rule. Art dealers are still selling art, and BMW and Mercedes are still selling cars, for example.
2) One should not draw too many economic conclusions from specific goings on in the toy soldier world. Each represents a tiny fraction of all finanical activity and, given its "collector" nature, may exhibit relative inelasticity of demand.
3) Some no doubt see "limited edition" releases as investment opportunities
4) Given peoples' ongoing hesitance to again fully embrace finanical securities, "hard assets" such as toy soldiers (and gold, etc) could be a sign people expect inflationary pressures to reassert themselves down the road.
5) In any market the "scarcity" effect may drive some buyer behavior.

There are certainly other factos I have missed. In general, though, I think you should expect people will exhibit greater frugality going forward. Of course embedded collective behaviors and societal norms do not change on a dime so this may play out over some time.

Lord knows I cant predict the future. I could be way off. Plus, without knowing the actual sales results of the various manufacturers all one can do is guess at the trends. The net-net could be a "culling of the herd" with just a few manufacturers surviving, or the entire industry could prove highly resilient. Time will tell.
 
Rutledge said:
Well, Damian, I suppose there are several possible explanations:

1) There are always exceptions to any rule. Art dealers are still selling art, and BMW and Mercedes are still selling cars, for example.
2) One should not draw too many economic conclusions from specific goings on in the toy soldier world. Each represents a tiny fraction of all finanical activity and, given its "collector" nature, may exhibit relative inelasticity of demand.
3) Some no doubt see "limited edition" releases as investment opportunities
4) Given peoples' ongoing hesitance to again fully embrace finanical securities, "hard assets" such as toy soldiers (and gold, etc) could be a sign people expect inflationary pressures to reassert themselves down the road.
5) In any market the "scarcity" effect may drive some buyer behavior.

There are certainly other factos I have missed. In general, though, I think you should expect people will exhibit greater frugality going forward. Of course embedded collective behaviors and societal norms do not change on a dime so this may play out over some time.

Lord knows I cant predict the future. I could be way off. Plus, without knowing the actual sales results of the various manufacturers all one can do is guess at the trends. The net-net could be a "culling of the herd" with just a few manufacturers surviving, or the entire industry could prove highly resilient. Time will tell.
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Good answer.
There are some occupations which are recession resistant I suppose like Policemen, academic staff, lawyers and there seem to be a lot of collectors who fall into these categories so maybe that is why we don't see a drop off. I would agree with the other posters but the last few months we have seen a major increase in releases. I would have instinctively have expected there to be fewer releases in 2009 but between K and C , First Legion, Figarti, TG etc there is no let up.
 
damian said:
Good answer.
There are some occupations which are recession resistant I suppose like Policemen, academic staff, lawyers and there seem to be a lot of collectors who fall into these categories so maybe that is why we don't see a drop off. I would agree with the other posters but the last few months we have seen a major increase in releases. I would have instinctively have expected there to be fewer releases in 2009 but between K and C , First Legion, Figarti, TG etc there is no let up.
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Thanks.

I would agree that the occupations you named are recession resistant. But they are not bullet proof. Some (large) city governments have expererienced such huge declines in tax revenues that they have been forced to take unprecedented actions - including laying off/not hiring new police/fire/emergency personel.

Academia has been hit. Harvard and Yale, for example, (no big tears ;) ) have lost tens of billions in their endowments and consequently are cutting back some things.

I have many friends who are lawyers. Some are doing very well - especially the liability and bankruptcy ones :) Others not so much. A lawyer buddy who works for the Court of Appeals here has been "furloughed" a couple days a month. Meanwhile the complete shut down of the mortgage securitization business hit certain law firms very hard. Stories abound of very prestigious firms rescinding or "postponing" offers to new grads from the most elite schools.

Not clear what the increase in new releases says about the state of affairs in toy soldier land. The pipeline for new products is fairly long (+9 months) so some of it could be due to a "lag affect". But perhaps its really because, at the end of the day, their businesses depend on them.

Its clear the vast majority of manufacturer sales comes from new product introductions. So no new introductions means (virtually) no sales. No company can survive long without sales.

Manufacturers who do limited runs can probably "push" down new products into their dealer networks pretty readily. That may be where the first "cracks" appear - when/if dealers start dropping off because of poor sales and/or cash flow issues from inventory overhang.

Companies like first legion have the advantage of no middleman to eat up profits. But they also dont have dealers to take inventory off their hands. Could make it less of an advantage for the near/mid term.

Whatever happens, it will certainly be interesting....
 
Yeah many universities in Canada have had a hiring freeze in effect since the beginning of the year. Meanwhile they are piling in ever more debt-laden students and lying to them that they're going to get the same quality of education as those that came before.

Damian, I would imagine the health care profession is fairly secure? People can give up a lot of things but medical attention isn't one of them. Though I've heard dentists have been having some trouble, though that's partly due to the rise of a generation that grew up with fluoride and so are in less need of their services.
 
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Excellent posts by the way Rutledge. My conjectures at the beginning of this thread were just me thinking out loud, without much time for reflection. I don't think anyone really knows how things will unfold in the immediate future. It's actually easier to predict the longer term future, and every indication is that it ain't gonna be pretty either.

I would like to revisit this one issue though:

Rutledge said:
The velocity of the money supply has contracted sharply since the recession began. Consumers are not spending as much while unemployment has risen substantially. The main reason deflation has not come about is the massive goverment spending that has replaced some of the lost consumer demand.
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In abstract economic theory this makes sense but it doesn't fit the facts on the ground (i.e. my local store). Government stimulus substitutes for lost consumer demand by buying more of the things government normally does: asphalt, skilled labour, computer servers etc. But government doesn't directly buy toy soldiers or movie tickets or other entertainment related goods yet you're not seeing much in the way of price drops for those things at retailers. The only thing that can be holding those prices up is continued consumer spending. Hence, I return to the possibility that the recession is overblown. Yes, it's true that government spending creates a large multiplier effect: when employees are paid by the government, they go home at night and spend as consumers, but the fact they're not putting all that money directly into the bank, and instead spending it, suggests some latent optimism still exists among the average consumer. They are potentially not as doom and gloom as the media portrays. Or they're simply too addicted to consumption to stop.

Now, that does lead to another possible explanation for all this: that consumers may be cutting back on big ticket items but turning to entertainment goods to "escape" the realities of everyday life during a recession. So maybe they are buying toy soldiers to take their mind off the fact they can no longer afford that new car or house they once had their eye on. In that sense, I again argue it is much more useful to think of the recession on a sector by sector basis rather than applying this blanket term over the whole economy like most economists are so prone to do. Markets are dynamic and there are always winners and losers in both booms and busts that go against the overall trend.
 
damian said:
Good answer.
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That is because Rutledge knows his stuff when it comes to economic issues.

Speaking from a dealers perspective, my gross sales are right about where they were last year (and last year was my best year ever) going into OTSN, right before the you know what hit the fan over the mortgage crisis last year around this time.

Bottom line is new product is what drives sales in this business or any other hobby for that matter. As fast as the products are being made, they are being snapped up.

As far as collectors in general, it seems every time I lose a customer, another new one pops up. Case in point; about a week or two ago, a new K & C collector contacted me wanting to buy about 50 different single figures to build a WWII collection. I told him I would be at the Annandale show this past weekend, he's from the area, so he came by, his first show ever.

He was like a kid in a candy store, bought something from just about every dealer in the place and handed me a printed list of what he wanted after seeing the figures in person; 5 large later, a new collector is born and George is one happy dealer.

Now he may flame out as fast as he jumped in, but the point is new collectors are discovering this hobby literally everyday, breathing life into it and adding to the collector ranks.

It's all pretty interesting; speaking of which, I was right in the middle of the protestors this weekend down in DC; one guy had a tee shirt which read "Ammo, guns and alchohol; who's bringing the peanuts so we can start the party?" and he told me in the hotel bar Saturday night the NEXT time they march on Washington, they're bringing weapons.

And he wasn't joking..............
 
Canadian Samurai said:
Yeah many universities in Canada have had a hiring freeze in effect since the beginning of the year. Meanwhile they are piling in ever more debt-laden students and lying to them that they're going to get the same quality of education as those that came before.

Damian, I would imagine the health care profession is fairly secure? People can give up a lot of things but medical attention isn't one of them. Though I've heard dentists have been having some trouble, though that's partly due to the rise of a generation that grew up with fluoride and so are in less need of their services.
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Especially if you work in a nationalized or government system like I do.
Dentistry is in a bit of a decline
Trauma has it's moments.
It is unlikely to die out as a profession.
Ever since Cain slew his brother Abel we have been able to rely on the baseness of human beings.
 
Thanks for the kind comments Warrior and CS. Perhaps we could teach the congress a thing or two about "civil debate/discussion"? :D

I do think there is somewhat of a "trade down" going on. I was at a nice steak restaurant recently. Someone remarked, boy, business looks good, I dont see any recession. My response was, well, maybe these folks would have nornally been vacationing in Tuscany but now have to settle for a good piece of beef and an over-priced glass of cabernet? Total conjecture on my part, of course, but I think in general that sort of thing is going on.

The fear of a total market collapse has largely abated. And while there are still some hard core doom and gloomers out there (Gary Schilling, Peter Schiff, Nouriel Roubini), there are plenty of others who have a much different and more positive view. I certainly dont know what is going to happen. One thing about the USA is that, at least so far, the optimists have always won out!

No question CS, that we will not all turn instantly into some sort of ascetic monk-like people, living only on the bare necessities. That would be surviving but not living (nothing against monks, however). Remeber the multiplier, or velocity of money, works in reverse, too. That is to say a partial fall off in spending will still be felt strongly down the line. And excessive consumption did have its benefits: it created jobs for those who provided what was consumed, whether it was in entertainment, second homes or toy soldiers. Some argue that what we are truly experiencing is a dramatic shift in the nature of our economy. More "green activity", less "raw consumption", a still robust but "different" kind of economy. This is about too abstract for me to argue for or against, but I certainly see the logic in the perspective.

Unquestionably there are pockets of strength in any economy, sometimes where one might least expect it. Perhaps toy soldiers is one. Warrior/George appears to be experiencing good business. Could be due to his superior client service, business and marketing skills, or purely the result of a strong industry overall. (Or some combination thereof). Requires more complete data to reach a valid conclusion. Perhaps the industry needs a "consultant"? :D

Interesting conversation you had with that "protestor", George. His sentiments are shared by more than just a few - and not only with "right wing crazies". Might be just "bar talk", but I would not totally dismiss it. I hope the folks in Washington are listening more than usual.
 
Rutledge said:
Thanks for the kind comments Warrior and CS. Perhaps we could teach the congress a thing or two about "civil debate/discussion"? :D

I do think there is somewhat of a "trade down" going on. I was at a nice steak restaurant recently. Someone remarked, boy, business looks good, I dont see any recession. My response was, well, maybe these folks would have nornally been vacationing in Tuscany but now have to settle for a good piece of beef and an over-priced glass of cabernet? Total conjecture on my part, of course, but I think in general that sort of thing is going on.

The fear of a total market collapse has largely abated. And while there are still some hard core doom and gloomers out there (Gary Schilling, Peter Schiff, Nouriel Roubini), there are plenty of others who have a much different and more positive view. I certainly dont know what is going to happen. One thing about the USA is that, at least so far, the optimists have always won out!

No question CS, that we will not all turn instantly into some sort of ascetic monk-like people, living only on the bare necessities. That would be surviving but not living (nothing against monks, however). Remeber the multiplier, or velocity of money, works in reverse, too. That is to say a partial fall off in spending will still be felt strongly down the line. And excessive consumption did have its benefits: it created jobs for those who provided what was consumed, whether it was in entertainment, second homes or toy soldiers. Some argue that what we are truly experiencing is a dramatic shift in the nature of our economy. More "green activity", less "raw consumption", a still robust but "different" kind of economy. This is about too abstract for me to argue for or against, but I certainly see the logic in the perspective.

Unquestionably there are pockets of strength in any economy, sometimes where one might least expect it. Perhaps toy soldiers is one. Warrior/George appears to be experiencing good business. Could be due to his superior client service, business and marketing skills, or purely the result of a strong industry overall. (Or some combination thereof). Requires more complete data to reach a valid conclusion. Perhaps the industry needs a "consultant"? :D

Interesting conversation you had with that "protestor", George. His sentiments are shared by more than just a few - and not only with "right wing crazies". Might be just "bar talk", but I would not totally dismiss it. I hope the folks in Washington are listening more than usual.
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Roubhni has been on the button quite a few times so I don't dismiss what he says about a double bounce out of hand.
 
Rutledge said:
Thanks for the kind comments Warrior and CS. Perhaps we could teach the congress a thing or two about "civil debate/discussion"? :D

I do think there is somewhat of a "trade down" going on. I was at a nice steak restaurant recently. Someone remarked, boy, business looks good, I dont see any recession. My response was, well, maybe these folks would have nornally been vacationing in Tuscany but now have to settle for a good piece of beef and an over-priced glass of cabernet? Total conjecture on my part, of course, but I think in general that sort of thing is going on.

The fear of a total market collapse has largely abated. And while there are still some hard core doom and gloomers out there (Gary Schilling, Peter Schiff, Nouriel Roubini), there are plenty of others who have a much different and more positive view. I certainly dont know what is going to happen. One thing about the USA is that, at least so far, the optimists have always won out!

No question CS, that we will not all turn instantly into some sort of ascetic monk-like people, living only on the bare necessities. That would be surviving but not living (nothing against monks, however). Remeber the multiplier, or velocity of money, works in reverse, too. That is to say a partial fall off in spending will still be felt strongly down the line. And excessive consumption did have its benefits: it created jobs for those who provided what was consumed, whether it was in entertainment, second homes or toy soldiers. Some argue that what we are truly experiencing is a dramatic shift in the nature of our economy. More "green activity", less "raw consumption", a still robust but "different" kind of economy. This is about too abstract for me to argue for or against, but I certainly see the logic in the perspective.

Unquestionably there are pockets of strength in any economy, sometimes where one might least expect it. Perhaps toy soldiers is one. Warrior/George appears to be experiencing good business. Could be due to his superior client service, business and marketing skills, or purely the result of a strong industry overall. (Or some combination thereof). Requires more complete data to reach a valid conclusion. Perhaps the industry needs a "consultant"? :D

Interesting conversation you had with that "protestor", George. His sentiments are shared by more than just a few - and not only with "right wing crazies". Might be just "bar talk", but I would not totally dismiss it. I hope the folks in Washington are listening more than usual.
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This pretty much nails the current situation; instead of going on a trip to Europe/the Bahamas/Hawaii, folks are staying closer to home and spending their money here instead of elsewhere.

This industry could use a consultant, consider yourself hired and thanks for the kind words; although this is a fun business to be in, it still is first and foremost A BUSINESS and needs to be treated as such.

And the "protestor" made an impression on me, that is for sure, he did not look like he was trying to be funny; three and a half more years of this, I tremble at the thought.................
 
Excellent thread, Guys!
Thanks to Rutledge, CS and Warrior for bringing up some interesting points.
Thank You.:)
Mike
 
1879fanatic said:
Excellent thread, Guys!
Thanks to Rutledge, CS and Warrior for bringing up some interesting points.
Thank You.:)
Mike
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You are welcome; see, we even did this without hurling insults, general name calling and having moderators delete 400 posts in the thread.

Well done men.
 
There is suppose to be a show on BBC America,either tonight or tomorrow night about the new world economy and about the U.S in particular.
Mark
 
No problem Mike, I(we 3) are glad to be of service and appreciate your sentiments! :D

As George wisely points out, you see it is possible for men such as myself, who collects toy soldiers, to also act like GROWN men - even when discussing potentially fractional subjects like economic matters. Who knew?? :)

We are so "grown" as to even ignoring the attempted "thread hijack" by Wayne 66517 :p:D:p:D

OK George, you know have a consultant at your disposal. Ill even let you pay me in....you-know-what.....;)
 
Rutledge said:
No problem Mike, I(we 3) are glad to be of service and appreciate your sentiments! :D

As George wisely points out, you see it is possible for men such as myself, who collects toy soldiers, to also act like GROWN men - even when discussing potentially fractional subjects like economic matters. Who knew?? :)

We are so "grown" as to even ignoring the attempted "thread hijack" by Wayne 66517 :p:D:p:D

OK George, you know have a consultant at your disposal. Ill even let you pay me in....you-know-what.....;)
Click to expand...

I'll pay you in Figarti vehicles and SL K & C items.................;)
 
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