Dana Edwards’ Blog

If you’ve been around me for some period longer than 30 minutes in the last 4 or 5 years, we probably engaged in a conversation about what kind of car I should purchase. This was probably followed by or included one of my lame jokes about how cars should be black given how all except two have been black and one I didn’t really have a choice. The conversation was typically a pro / con discussion about lifestyle, job, the high cost of cars these days, how I wanted a truck and several other dimensions. Well, the other day I woke up and decided I was buying a car regardless of how long it took.

With the help of Jill, kbb.com, and last minute Twitter advice from @cp2 and @canook_65, we purchased a BMW 550i. Side note – I still have no idea how to interpret the arcane model numbers that BMW uses. Last minute, @cp2 and @canook_65 talked me out of buying a Jeep primarily due to them being generally average. After lunch, I drove to Hendrick BMW and bought the 550 from Jeff Shinn (jeff.shinn@hendrickauto.com – not yet on Twitter but hopefully soon) and Jhoda Edquist (@jhodabmwcpo) who were both absolutely awesome to work with. Jeff did a great job with the initial explanations and Jhoda did a great job putting up with my kids climbing all over the store and explained the benefits / programs really well. I highly suggest working with either of them. if you are in the market for a BMW. The end to end transaction was fast and painless.

Now comes more praise for Hendrick. While switching lanes on Graham, I ran through a pothole the size of the grand canyon. I was quite upset and worried that I had ruined my BMW forever or that it was going to cost me several thousand dollars. Immediately after hitting the hole, I dialed up customer support on the BMW hotline in the car. They set up an appointment for me the next day!

The next day I drove the car down to the service area. While there, I treated myself to a complimentary donut, some complimentary freshly brewed Starbucks coffee and a surprisingly great atmosphere in the wait area. It was quiet except for the TV. It was clean which is rare in Charlotte for a service area and the manager (Rob Moore) was super cool and explained everything to me so I knew I was getting ripped off.

About two hours later, I got my car back and it was perfect. Hendrick replaced the tire and rim without any questions based on the Road Hazard agreement, washed the car, and I was on my way. This was a perfect service experience!!!

So, I’ve decided that I like everything about Hendrick BMW and the BMW company after the purchase experience, the driving experience, and the service experience. Thanks for all of this Hendrick / BMW!!!

- Dana

If there is one binding thought amongst us today, I would guess that we are all a little bit uncertain about the economy still. I’ve read a number of articles talking about the good and bad of Obama’s actions. The net of all of them is that there are still two sides to every issue and there is no absolute answer just different approaches to generally make life better. I don’t think any of the policymakers are trying to do a bad job or trying to make the US socialist. It’s just a flurry of different approaches. The question in my mind is whether consumer confidence is picking up or dropping off and are we moving from general uncertainty to a more positive place as a country.

Here is what I think we can all acknowledge. Unemployment has dropped from 9.5 to 9.4. Of course the question is how much of that drop is because people are self selecting out of the job search. Non-farm job loss slowed to 247,000 in June. That looks fairly promising that we are beginning to see a change. So, the labor market appears to be gettig less unhealthy than in previous months and perhaps is on the way up.

The nugget of good news that I found particularly comforting was that Freddie Mac posted positive net income and has declared it will ask for no more money from the government. That bit of good news seems to have gone unnoticed by many of the large television news broadcasts.

The next topic I will be following is the impact of countries who have beenthe recipient of many of the outsourcing efforts like China and India. Recently, I have been reading about the prosperity of China. On the surface, this sounded like very positive news and indeed it is. I think the flip side of that issue is that China’s people will become more prosperous and ultimately begin to seek more expensive goods. This will drive up labor costs and potentially erode China’s price competitiveness. Perhaps, this will bring more manufacturing jobs back tithe US and reinvigorate those part of the country that have been hit very hard by the recession.

I think that optimism will be a personal and business competitive advantage through all of this uncertainty.

- Dana

Even the die-hard McCain supporters can’t deny that Obama is at the helm.  That said, Obama has quite a challenge to build the consumer confidence necessary to help turn the economy back around and to do that he has to figure out how to please a number of different types of people.  Since Obama is such an avid reader of my blog, I’ll post my list of wants here so that he and everyone else can read them.

• Reform Health Care - figure out how to cut costs in health care.  My personal preference would be to create a national, government sponsored program.  The benefits of this have been discussed ad nauseum throughout the election. An alternative would be to just take over the dental system and establish about 2x as many dentists as exist today. Dentists should be easiser to access and I find it unacceptable that it takes a month to get an appointment.
• Invest in US Energy – Ideally, the administration will invest in the energy infrastructure for renewable resources. This would include source such as creating wind, hydro, and solar power as well as investing in the Auto industry but only for models that use renewable sources.
• Be Smart about Raising Taxes but Raise Them – US Citizens need to chip-in to help out the overall situation.  Lots of individuals at companies made bad judgements that led to our economy being in the dumps and US ingenuity will get us out of the dumps.  In the interim, we all need to chip-in appropriately.  We all know taxes will go up but Obama should take time to come up with the right policy. Capital gains will go up eventually I am sure but since nobody has any, it would likely be best to not knee-jerk and shoot them high.  Wait until third quarter to come up with a good plan. On corporate taxes, I would like to see corporate taxes lower to a point that businesses would come back to to the US and away from international sources.
• Take the money we feel the economy needs, take it all at once and give the public complete transparency.
• Spend about 1 day of your time and get us an NCAA Div 1 College Football Playoff!

Dana

Over the past few weeks, I have had the luxury of being able to spend some time at home with my family and in between other activities with them, I was able to catch various pundits preaching on TV or in news articles how the world was coming to an end because of the US economy.  If you haven’t caught any of this on the news, feel free to do a google search or visit our friends at EconomyInCrisis.org and then come back to this post.  If you don’t want to visit that site, here is the general message – Everything related to the US Economy stinks: the rate cuts don’t work, NAFTA is killing domestic companies, and several other ‘America’s Economic Policies Stink’ messages.

If you want to look at the very short term, I will agree that there is enough pain to be had for everyone and then some.  That is a very easy thing to do.  You are very likely to know someone that has been affected or will be affected by this current recession.  Dwelling on this will actually help the recession stick around because the pessimism about the economy lowers consumer confidence.  With lower consumer confidence, we will experience deflation, lower consumer spending, lower industry profits and higher inflation.

The period we are experiencing is more like a creative destruction period where the world as we understand it is being destroyed only to leave a more balanced environment.  Without a doubt it is and will be for at least 6 more months – painful. We can only thank ourselves as we went out and purchased more expensive food, guzzling cars, mini-mansion houses, and slicker pocket cell phones. Many other countries did the opposite and suppresed the urge to burn more gas than their neighbor. For example, China has grown through more cautious investment by stock-piling about $1trillion in US Treasuries.  So, there has been a natural imbalance between saving and spending around the globe.

All systems eventually reach a new equilibrium as it is natural law to do so and humans are not able to defy the laws of physics. Eventually other countries will need to buy our higher quality goods as they seek to raise their own standards of living.  This will happen but it will not happen overnight.  When it does occur, the US will need to maintain their goods at that higher quality and be there to sell. So, companies with higher savings rates will leak money to those on the opposite side of the imbalance.  The strongest companies will be those that determine how to make it from now until then without freeing themselves of all of their employees and raising the unemployment rate / lowering consumer confidence.

Here are a couple of items to be optimistic about:

1. US Consumers are more educated about how the financial system works and consequently are staying away from riskier investments
2. US Consumers are beginning to save more money (per www.bls.gov) – 0.75% increased to ~2.5%
3. US Consumers are beginning to get numb to the bad news and will spend again. For example, Amazon sold almost 73 items per second.
4. Investors around the world view this recession as a “sale” on American investments and they are buying up US Treasuries.
5. The US Government is taking reasonable actions to combat the decline.

I don’t claim to know everything but what I do know is that it is easier to report on bad news than good.  So, as I listen to the pundits on TV, I am going to keep the facts in mind and hope that the steep drop turns into a slow climb soon.

Dana