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Economic Tide Is Rising for Repo Man
David Streitfeld, New York Times
So many people have so many things they can no longer afford. This is an excellent time to be a repo man.
When a boat owner defaults on his loan, the bank hires Jeff Henderson to seize its property. The former Army detective tracks the boat down in a backyard or a marina or a garage and hauls it to his storage area and later auctions it off. After nearly 20 years in the repossession business, Mr. Henderson has never been busier.
… Boating was traditionally the pastime of the well-off, but the long housing boom and its gusher of easy credit changed that. People refinanced their homes and used the cash for down payments on a cruiser, miniyacht or sailboat.
… Last year, as real estate faltered, the gears went into reverse. The number of boats sold fell 8 percent. Many boats are fuel hogs, and rising gasoline and diesel prices meant a weekend jaunt could cost hundreds or even thousands of dollars.
… Some people lose their house or their boat to abrupt setbacks: illness, job loss, divorce. Mr. Dahmen, who works as a technology manager for a car manufacturer, belongs to a second, probably larger group: he simply spent beyond his means. He is one of the millions of reasons the consumer-powered American economy did so well for most of this decade, and one of the reasons its prospects look so bleak now.
(20 May 2008)
If $4 Gas Is Bad, Just Wait
Anna Raff and Jessica Resnick-Ault, Wall Street Journal via Yahoo!Finance
Judging from the futures markets, shock at the gas pump is bound to get worse. Maybe much worse.
Since the beginning of the year, benchmark oil and gasoline futures on the New York Mercantile Exchange both have increased by more than a third, but the average retail price of gasoline in the U.S. has risen by 22%. That bodes ill for consumers.
So far, oil refiners and petroleum-product distributors have absorbed much of the increase, but their ability to continue to swallow losses and operate at thin margins is limited.
(22 May 2008)
Britain faces an ‘economic crisis’ as soaring oil prices threaten to pile £700 onto the average family’s fuel bill
This Is London
Britain is facing an ‘economic crisis’, a minister warned last night, as soaring oil prices threatened to pile £700 onto the average family’s annual fuel bill.
In a frank assessment, trade minister Baroness Vadera said the UK was facing a ‘very testing period’.
Yesterday, in the latest blow to the cost of living, the price of oil soared to a record high, hitting $135 a barrel and leaping by $5 in just 24 hours to more than twice what it cost a year ago.
Price hikes: Prices at the pumps will continue to rise for the next eight years
Motoring organisations said it heralded a ‘summer of misery’ and would mean petrol prices going up by two-and-a-half pence a litre within four weeks.
As well as increasing pain on squeezed households, business leaders warned companies were being pushed to the ‘absolute edge’ by the rising prices.
(22 May 2008)
High prices won’t stop the world going on growing
Hamish McRae, Independent
This time it is different. True, this is an oil shock akin to those that struck the world economy in the 1970s, for the price of oil – even allowing for inflation – is now a lot higher than it was at the 1979 peak. Those shocks pushed the world economy into two recessions, in the mid- 1970s and the early 1980s, and helped drive inflation into double digits in most of the developed world. Unemployment soared as interest rates were raised to try to curb inflation. But then the oil price fell back again as new fields came into production and countries made a start on conserving oil.
So will the surge in the oil price have similar consequences this time? It is a tough judgement because we don’t know how high oil will go, but it looks likely that this oil shock will have a less damaging impact than in the 1970s. However, since the price is unlikely to fall back as far, it will have a more lasting impact on our way of life.
Since oil is the largest single source of global energy, larger than natural gas or coal, and far larger than nuclear or renewables, a rising oil price pushes up the price of everything, including food. That squeezes living standards still further.
As a result some countries may well be pushed into recession. There is a good chance that will happen in the US and maybe here in the UK, though in both instances the prime culprit would be the end of the housing booms. The surge in the oil price just happens to come at a very bad time. But even if this does happen there are a number of reasons to suppose that the world will continue to carry on growing, despite the pressure from oil.
(23 May 2008)
Consumers cut driving but not diets: poll
Timothy Gardner, Reuters
As prices at gasoline pumps and grocery stores rise U.S. consumers say they are driving less but they can’t cut down on eating, a new poll found.
Nearly half of respondents to a Reuters/Zogby poll of likely voters in the presidential election later this year said they are driving less to compensate for record U.S. gasoline prices, which hit a record average of $3.80 per gallon on Tuesday according to travel club AAA.
But only about 8 percent of the 1076 respondents in the national poll said they were eating less generally to cope with rising food prices, the poll said.
“People have more control over gasoline. they are driving less and driving smarter,” pollster John Zogby said by telephone.
(21 May 2008)
