Tuesday, March 24, 2009

What is going on?

Yesterday driving back from work I met a small caravan of three pickup trucks hauling three new grain augers to some destination. At the corner of Highway C & N and U.S. 412 a farmer has his equipment sheds. Many times there are vehicles or equipment for sale on his property and they seem to move pretty well. Yesterday he had a fairly new John Deere cotton picker for sale and a Module Maker beside it. I wondered if he was getting out of the business or had he upgraded to a new piece of equipment I started to see in this area last year which is a combination cotton picker module maker made by both Deere and Case. Sure enough, there back in one of the equipment sheds sat a great big new John Deere picker with the module maker extension on the back end. So he upgraded.

A friend who is a John Deere dealer here in Paragould had let his inventory of equipment drop to very low levels last fall. When I talked to him about that he said he was very uncomfortable to see his inventory that low, but he had to do it from and economic standpoint. This spring driving past his dealership I see his lot is chuck full of new combines, pickers and sprayers. Big stuff, high ticket items. Now that could be because Deere is making incentives available to dealers that allow them to obtain large amounts of inventory, but Deere has been in this game for many years and knows the danger in artificially generating sales. Case damn near went bust of that issue back in the 70's.

Bo Adams, a very rich man who owns 48,000 acres of prime delta land is propping up his farm renters by forgoing rent charges. He will take a piece of the action at harvest time, but he will weather the storm.

My cousin Maureen who is a loan originator in California is back at work full time instead of one day a week a month ago. The low mortgage rates are stimulating all kinds of refinancing activity. Used home sales were up over 5% last month when experts predicted a fall. Even though much of the activity was in foreclosed homes I take that as a price adjustment to an over inflate housing values in the market as opposed to any other sign. The Real Estate boards aren't going to admit to an inflated market. They are a bunch of parasites as responsible for driving the price of homes up by 6% for every transaction along with the forces of greed that operated in house flipping strategies. In many large markets in this country everyone was forced into paying inflated prices for homes because of these forces.

So what does all this say to me. I think the economy has made its adjustment. There may be some more downward swings, and perhaps our little sample of what's going on is not correct. I just don't get the feel we are living in as desperate times as some pundits make out to be.

No comments:

Post a Comment