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Is Cheap The New Green? Not For Long In This Economy...


  • March 31, 2009

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Take a walk down Rodeo Drive or Fifth Avenue and you can stop in any shop to speak with the seemingly bored proprietors to hear all of the gory details about how even the most wealthy people are cutting back from their spending. From Neiman Marcus to NetJets - people with money have reeled back their spending as the economy has been on the skids since September of 2008. This is no different in the astronomically priced world of audiophila or the construction-powered custom AV installation market. To put it politely, things have been less than bullish for all luxury goods.

Some suggest that "cheap" is the new "green" when it comes to buzzwords that drive the economy.

While green energy, recycling and environmental sensitivity is likely to be a decades-long, sustainable movement in ways that the Internet boom of the late 1990's couldn't hold a candle to - being frugal isn't going to last with a spend-happy country like the United States. People need homes. People have homes that need things (think: speakers, HDTVs, media servers, remotes, receivers and beyond). People get sick of not spending money because spending money is fun. Spending money feels good. Spending money is an American right (or so we think). The question is: have people learned not to spend out of their home equity like it's an ATM? I think we as a country have learned our lesson that having a six-figure job is not a right and that our homes aren't going to increase at 25 percent per year every year. We are far more realistic now.

With a recent, short-term rebound on Wall Street powered by good news on the housing and banking fronts, a case can be made for the foundation of an actual economic recovery. CNN can't stop talking about the "Road to Recovery" as the news cycle has seemingly swung from gloom and doom to a little more optimism in recent weeks. These are good signs. There could be a re-testing of the bottom of the market but overall people are starting to see real solutions to ugly problems. Most excitingly, the effects of Obama's stimulus plan - whether you support it or not - have not taken effect. People will be getting jobs. Infrastructure will improve. The economy will benefit at one level or another in the months to come because of all of this FDR-like spending that is coming to a state near you (except Alaska - those voters can thank Sarah Palin for turning down free money to heat up their local economy).

In a recently published interview "The Oracle of Omaha", Warren Buffett, spoke on the issue of 10-plus percent unemployment in many parts of the country. He noted that while 10 percent is a lot of unemployment, there are still 90 percent (or a little higher on a national level) of people still working - yet fear and worry makes many of them not spend today as if they were actually without work. If the credit freeze lifts, thanks to the government purchase of the newly termed "legacy" (formerly known as toxic) assets - banks will be cancer-free and flush with T.A.R.P. Money to lend. This will without question help small businesses like audiophile and specialty home theater and video companies, as credit is their life's blood. A stronger banking industry will help lift credit card spending limits as much as it will make it easier for people to actually get a loan to buy a house in this value-priced market. This could result in more HDTVs, receivers and speakers getting sold as soon as this summer, which is nothing but a good thing for the AV business as a whole.

While little is guaranteed of the future on Wall Street, it's not hard to see how the specialty AV business could get a lift with the rising tide of the American and ultimately the global economy. People need to know the sky isn't falling because all of us acting like a bunch of cheapskates isn't fun - but hanging a 65 inch plasma on your living room wall is pretty much as joyous as it gets.

Keywords: How the U.S. Economy will boost the home theater business, cheap is the new green, people sick of being cheap because of the economy, Warren Buffett, The Oracle of Omaha, "Legacy" Assets, Toxic assets, new plasma HDTV, home theater and the housing market, Neiman Marcus, NetJets, Rodeo Drive, Fifth Avenue

Keywords

How the U.S. Economy will boost the home theater business, cheap is the new green, people sick of being cheap because of the economy, Warren Buffett, The Oracle of Omaha, "Legacy" Assets, Toxic assets, new plasma HDTV, home theater and the housing market, Neiman Marcus, NetJets, Rodeo Drive, Fifth Avenue

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  • Comment on this article

    17
  • By steve

Stick to electronics Jerry and not the economy. You trying to figure out the economy is about as close as Barack Obama is to being a truck driver. And a far as people wanting to spend money, they'll be doing that soon enough in the years ahead trying to pay off BO's debt. And Sarah Palin is smart enough to know that "free" money is never free Jerry. There are strings attached. You should know that because you're a Hollywood type and you guys know everything.

One thing I like about you Jerry is that generally your articles are short, and that's because you don't know anything. Stick to electronics. Wow, look at all the comments.

  • By Jerry Del Colliano

Hey Steve -

Eight years of Bush did us wonders. More top line tax money coming in yet more big debt and big gvmt than ever. Talk to Rush about that.

And if you want to scoreboard my man Barack - how much is the S&P up since he took over? Is it 20% yet? If not - its close.

And BTW was it a democrat who last balanced the budget (and left Bush with a surplus for the first time since LBJ)? Just checking....


  • By dbor

Hey dummy. it wasn't a dem who balanced that phony budget. It was a repub congress who made him do it!! BO stinks and when he and his cronies get done screwing up this country we won't be able to buy a HT system from wal- mart.

  • By steve

So that's the story Jerry? After reading your reply here as well as your article, it's clear someone must have helped you with it. It sounds like two different people writing. And as far as government debt is concerned Jerry, did you see the latest budget that your Congress is about to deliver for 2010. Dwarfs anything in my short lifetime if you're so worried about debt. Jerry, listen very carefully. You - can - not - borrow - you're - way - or - spend - your - way - out - of - debt.

Jerry, you're not as brilliant as you think you are. But then again, you're a Hollywood type, right? Try running your business like that Jerry.

  • By Jerry Del Colliano

You listen to too much Rush Limbaugh. Has anyone ever told you that...?

To those who are reading this tread who don't think an Ann Coulter book is a proper place to pleasure yourself - I will suggest that FDR (consider by nearly all historians to be one of the top 3 to 5 presidents of all time) needed to spend his ass off to bail us out of the Depression. It took a long time to get there but by LBJ (a democrat you might note) we balanced the budget again. Is it OK to borrow money to buy a house and then pay it off before you retire including the interest? Right now, we as a country need to borrow money to dig ourself out of one hell of a mess. Its an ugly reality but its reality that will result in a better banking system, a better way to lend to home owners, a stronger more environmentally-minded car industry, a new power grid, millions of jobs to offset 8.5% unemployment etc...

Roll the tape forward to the end of the Cold War. Regan (a republican) won the cold war by spending money and investing in new defense technology in ways the Russians couldn't. Note: it took a democrat again to pay off that debt names William Jefferson Clinton. He left America with a budget surplus and less debt than in recent memory. The Internet boom helped him but note: Bush had higher tax revenues coming in than Clinton but we had wars to fight to get those WMDs in Iraq right? That plus the 8 year mismanagement of this country by republicans left us in debt like never before. Now, regrettably we have to borrow more. At least Geitner isn't giving away the T.A.R.P. money with no strings attached like Paulson did with the first 350 billion as proven by giving the HOLDING COMPANY for Citibank the bailout $$$ not the commercial bank section of the company.

Did anyone notice that Bush had 7 years to catch Osama Bin Laden and didn't? Did anyone note the chartered flight from Tampa to Logan (in Boston) where the Bush admin on 9/12/01 allowed all of the Bin Laden and House of Saud family members to return home from the US when nobody other than f16's could fly? Let's not make any mistakes here - we sold out our interests to the oil interests around the world. Don't make me cite the recent all-time record profits had by EXXON MOBIL and others as recently as a year or so ago. You remember $5.00 a gallon gas right Steve?

And if Obama doesn't catch Osama - I likely will not vote for him in 2012. Tora Bora is still fresh in my mind. Do you remember when we had Osama cornered and sent in former Taliban with sharpened sticks and didn't get Public Enemy Number One? Who was commander in Chief then Steve?

And lastly, I am a Hollywood type I guess as I am the Executive Producer of April Showers - a movie written and directed by Columbine survivor Andrew Robinson. It hits theaters on April 24, 2009. You might note that we are donating ALL of the first week's box office earnings to the local schools nearest to the theaters where it is showing? So if by Hollywood type you mean I make movies and support our failing school system - then you are right. The movie also is the SECOND EVER to day and date on I-tunes AND is the first movie made NATIVELY in 4k which is the digital cinema standard and SO HIGH of a resolution that most theaters can't project all of the pixels. It will be one of the best transfers to Blu-ray EVER as it is downconverted from MANY TIMES higher resolution than 1080p down to 1080p... http://www.AprilShowersMovie.com?

Steve - maybe you wanna come on the set of Dancing Carl - our next movie? You can sit with me in the director chairs and Andrew and I can school you on politics again. First lesson for you. Rush is WRONG.... I'll let Andrew teach you that. I will spend my time showing you what an impressive business the Hollywood system is...

Have a great weekend....!!!!

  • By stevo238

I wish you would put more time in defense of the current admininstration than always beating up on past administrations because that is all you know. Rather than get in a battle over all of your "specific" remarks, I'll just take issue with one, and that is, that FDR spent his way out of the Great Depression. The New Deal monetary policy of the 30's did little to stimulate the economy and only lengthened the Depression. Unemployment remained in the double digits until the beginning of guess what, Jerry? The attack on Pearl Harbor and the beginning of WWII. And with that commenced the building of a huge war machine. Most "smart folks" know that WWII brought us out of the Great Depression Jerry. Most smart folks except you. That was easy Jerry. Oh, it's always nice to see you pat yourself on the back again. Super Moderator no less. Still the schmuck, I see.

  • By T Bob

Hey Dbor:

I see you like to rewrite history. The Republicans spent lie drunken sailors as soon as there wasn't anyone to stop them. You seem to forget that a Democratic in the White House actually had to shut down the government for a few days to stop the the Republicans eating at the trough. The balanced budget was forgotten as soon as the Republicans came into power. These are the same guys screaming for term limits. How long did that last? (If you guessed just until they got elected then you'd be right.) You seem to forget that for all their talk of balanced budgets, the largest deficients have been created under Republican presidents.

So, get with it as far as who is the one who created the biggest mess this country has ever seen. You can't move forward without remembering the past because as they say " He who forgets the past is bound to repeat it.

  • By steve

T Bob, I think Dbor was trying to say that the Republican Congress controlled spending when Billy Clinton was in Congress. Without the Gingrich Revolution of 94" there wouldn't have been a balanced budget. If you recall, (amongst other things) the Republicans dragged Clinton kicking and screaming into Welfare Reform. Clinton didn't sign the bill until the 3rd go around. And we all know the big bite that Welfare takes out of the budget.

Trying to bring a little sanity into this debate, notwithstanding Jerry's ramblings, Clinton and Gingrich were good for each other. At least you could take those two guys, put them in a room, and they could come up with a solution. I don't see that happening with this Congress. Divided government works. And yes Jerry, you wouldn't know that if it hit you in the head. That's because you're a big goof ball. Keep opening your mouth Jerry, so you can keep putting your foot in it.

  • By Jerry Del Colliano

When was Bill Clinton in Congress Steve-o?

Newt Gingrich taught America to HATE. Before his so-called revolution republican senators could argue and debate on the senate floor - fighting for what is right for their state and then have a few scotches after work because they all loved America. After Gingrich's Contract with America - you saw the start of the "w" "you are either with me your you are not" Jesus Freak fundamentalist side of the Republican party. A mantra that ended the country basically bankrupt and looking to heal. Obama is that healer.

Market was up again today Steve. Did you see that?

These aren't ramblings. These are facts.

Would you like to talk about your buddy Rush Limbaugh now? How did his ratings do after his drug addiction effect his voice/hearing? Do you want to answer this Steve? Do you want to talk about his contract with right-wing run clear channel and his ratings after this? Do you remember what Rush said about what should happen to drug addicts?

DEFEND YOURSELF STEVE. No man should take a beating like this.

  • By T Bob

Steve:

Who created the rancor in Washington? If you guess those Newt Contract with America Republicans you would be right. Compromise left when the Republicans took over Congress. The Christian Right Wingers came in and decided everyone needs to be exactly like them.

Also, who would say they want the President to FAIL. Rush and Dick Cheney would rather see people suffer if someone else is in charge. You never heard Democrats say they wanted things to go bad, but as soon as the Republicans are not in power, they're hoping everything gets worse than the mess they created when they were in power.

Open your eyes, Steve, and realize what the Republicans really are.

  • By Jerry Del Colliano

As much as I disagreed with Bush - I NEVER EVER EVER rooted for him to fail.

Do people understand what Obama failing means?

  • By steve

Many names come to mind when I think about the Democratic smear machine. Begala, Carville, Podesta, all did their parts in destroying the lives of women who exposed Bill Clinton for the scumbag he is/was. Jeremiah Wright was Barack Obama's Pastor for 20 years. He preached hate but Barack never heard it in those 20 years. Surely I don't have to give you example's of some of his finer points of view.

Yes Jerry, market is up and so is unemployment.

And yes Dbor, compromise is certainly dead in Washington. Just ask any Republican in the House. I think Ann Coulter did say it best, (and I'm paraphrasing) where else could a retarded women like Nancy Pelosi get elected to higher office. Really fellas, don't you just cringe when Nancy opens her mouth. And 3rd in line for the presidency. Now that's scary.

I'm sure most of you supported the troops, but did not support the Iraq war. I support Barack Obama. I don't support his policies.

Jerry if you're going to rebut, try keeping in on topic and please don't ramble on. And be a man Jerry. Anyone who would deliberately cut off my remarks because they make more sense than their's is no man. That's called being a Tyrant Jerry.

  • By Jerry Del Colliano

Steve - great point about unemployment. Obama has been in office for like 70 days and somehow that is his fault? Are you kidding? Even Rush wouldn't blame him for that. Solid argument.

Back to my point - in the time that Obama's team took over the Superfund site known as George W. Bush's America - the S&P500 is up over 20%. The banking system is being reeled in from the laise fare ways of W. The auto industry is being rebuilt complete with new union contracts (despite the favors Obama owes to the Unions like ANY Dem). Geitner is "stress testing" the banks. We are rebuilding the energy grid, reversing Bush's Jesus Freak take on stem cell research and beyond. Not bad for inside of 100 days.


  • By steve

You actually made one good point in there Jerry. And I'm sure you're wondering how I'm getting around your review process of shutting down open debate.

You're a businessman and entrepreneur Jerry. Be careful what you wish for.

  • By Jerry Del Colliano

As a businessman in 2008, I sold AVRev.com, ModernHomeTheater.com and AVRevForum.com to Internet Brands.

I know exactly what to wish for which is their continued loss of clients and our continued increase in clients. Its the American way - right INET?????

  • By steve

The banking system is being reeled in from the laise fare ways of W. / quote

It's laissez faire Jerry. And you know you believe in it too just as long as no one's bothering you. Not INET either. I figured a smart Hollywood type like you could have figured that out. One last thing Jerry. Why no Hollywood friends on your Facebook? I expected at least one familiar face. Auf Wiedersehen for now Jerry.

  • By rodney king

Can't we all just get along?

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