How will you professionally react during a recession...............

[Chris Ryser]

Mortgage lender Countrywide to cut as many as 12,000 jobs

Saturday, September 8, 2007

LOS ANGELES -- Struggling lender Countrywide Financial Corp. will cut as many as 12,000 jobs as it struggles to deal with challenging conditions in the mortgage industry, the company said.

The cuts, amounting to as much as 20 percent of its work force, are needed because the company expects new mortgages to fall about 25 percent in 2008 from this year's levels, Countrywide said Friday.

In a letter distributed to employees, Countrywide Chief Executive Angelo Mozilo called the current market cycle "the most severe in the contemporary history of our industry."

See whole story: http://www.naplesnews.com/news/2007/...jobs/?business

[impact500]

<<Countrywide Chief Executive Angelo Mozilo called the current market cycle "the most severe in the contemporary history of our industry.">>

Maybe he shouldn't have made so many loans to people who could not keep current with payments as rates went up as was likely to happen.

Was the problem imposed upon his company or was he a major part in creating the problem? Likely some of both but he needs to look in a mirror.

The economy is slowing and the sub-prime mess is a major contributor. Too early to know if it will become a recession. Some sectors of the economy remain strong while others are clearly shrinking.

[RA]

...sentence says it all. Go ahead Chris, say I told you so.

http://www.economist.com/daily/news/...ory_id=9783297


:)

[Chris Ryser]

Go ahead Chris, say I told you so.

http://www.economist.com/daily/news/...ory_id=9783297

RA......................I told you so.

However if you are the only one starting to believe in the facts that are being shot at us on a daily basis now, this thread is to no avail.

I have been talking to many sales reps in the optical field over the last couple of month and most of them say the same thing...............it is very quite. (except our own Optiboard optirep who still sings Luxotticas "How well we are doing................")

I just want to say again.............when people are stuck with half or no income and need glasses they will not look for the top brands either in frames nor in lenses.................because they can not afford them.

Opticians will have to turn the clock back in the way of thinking sales and find ways to make a decent profit on lower cost products that can be sold at a price the unfortunate one will be able to afford. :finger:

[For-Life]

Chris, I have my keys right here. Should I just hand them over to Wal-Mart. The ol, if you can't beat them, join them?

I prefer to go the beating route.

[RA]

I prefer to go the beating route.

TMI :drop:

[Chris Ryser]

They are everywhere in Canada.

Plus in Quebec they closed 2 of them because the staff got unionized and they did not like that.

So, according to what happened here, if you want to get rid of WalMart.................get the unions in and they will close them

[For-Life]

I have tried. Our town loves its Wal-Mart. The one here is one of the busiest in the nation.

Though, the optical department gives us a lot of referalls, due to our offerings.

[Chris Ryser]

Chris, I have my keys right here. Should I just hand them over to Wal-Mart. The ol, if you can't beat them, join them?
I prefer to go the beating route.

For=Life.you know well you can not beat them. You dont even have to take them into consideration, you can do your own thing and succeed or survive but it will take some rethinkiong and adjusting, that what its all about.

[For-Life]

For=Life.you know well you can not beat them. You dont even have to take them into consideration, you can do your own thing and succeed or survive but it will take some rethinkiong and adjusting, that what its all about.

Exactly, well said Chris. I think you are coming around.

Years ago we were probably just like Wal-Mart. Offering lenses without AR, so-so frames, maybe better service, but more expensive. We were getting squashed. We then differentiated, offered easy to clean AR, better frames, better PALs, better service, and did not adjust our prices. We are now doing much better.

If you copy Wal-Mart, you will die to Wal-Mart.

[Chris Ryser]

If you copy Wal-Mart, you will die to Wal-Mart.

I wish you would come off the word Wal-Mart as if it did not exist.

Any large corporation whatever name and whatever domain they are working in are directed by internal politics and also a lot of red tape. They are comparable to flying a 747 up in the air and comparing their maneuverability to a small F16 fighter plane.

When the recession will hit, and maybe even turn into a depression the Small guy can change course from one day to the next..................the large corporation can not for obvious reasons.

We then differentiated, offered easy to clean AR, better frames, better PALs, better service, and did not adjust our prices.

In a recession of all of your above mentioned qualifications that is positive is, better service, and the rest you can forget unless you want to deal only with still well to do customers of which there are always some left.

Bad economic time usually do not last forever............therfore people will want a product that is good as a temporary solution until their situation is improving again.

You will sell all those additions as you have been describing at a much slower rate. Your high end frames and lenses will not move anymore.

You will have to put new lenses into the old used frames which has to do for another year or two.

We all have to adapt to a new situation and if we think that it will be business as always we better take another look.

[Chris Ryser]

Chances of recession rise in Blue Chip forecast

Mon Sep 10, 2007 2:06pm ET


By Joanne Morrison
WASHINGTON (Reuters) - The chances of an economic recession are increasing as troubles in the housing sector and credit markets take their toll, according to a survey of economists released on Monday.
Forecasts from economists put the odds of a recession in the next 12 months at one-in-three, according to the Blue Chip Economic Indicators newsletter. A month earlier, the odds were at one-in-four.


The survey of about 50 private-sector economists was taken Wednesday and Thursday, just ahead of the government's release of August employment data on Friday, which showed the first decline in payrolls four years.

The newsletter stated that this dismal employment picture did not impact an already-weak growth outlook but it did solidify expectations for an interest rate cut from the Federal Reserve.
The economists lowered their forecasts for growth due to concerns about credit market turmoil spilling into the economy. The panelists said they expect GDP growth to remain modestly below trend through the first half of next year.

See all of it:http://today.reuters.com/news/articl...xml&src=nl_dai

[For-Life]

I wish you would come off the word Wal-Mart as if it did not exist.

Any large corporation whatever name and whatever domain they are working in are directed by internal politics and also a lot of red tape. They are comparable to flying a 747 up in the air and comparing their maneuverability to a small F16 fighter plane.

When the recession will hit, and maybe even turn into a depression the Small guy can change course from one day to the next..................the large corporation can not for obvious reasons.



In a recession of all of your above mentioned qualifications that is positive is, better service, and the rest you can forget unless you want to deal only with still well to do customers of which there are always some left.

Bad economic time usually do not last forever............therfore people will want a product that is good as a temporary solution until their situation is improving again.

You will sell all those additions as you have been describing at a much slower rate. Your high end frames and lenses will not move anymore.

You will have to put new lenses into the old used frames which has to do for another year or two.

We all have to adapt to a new situation and if we think that it will be business as always we better take another look.

Chris, Chris, Chris. You are forgetting something. My area has been in recession for the past few years. Our major industries have been decimated (actually, now we are starting to move out of it, while the rest of the World moves into it).

What was the result? Four stores closed down (none of mine). All of these stores were low end places that did not sell AR to everyone, did their own coatings, and such. The ones who survived and were profitable were the doctors and us. Why? Because we differentiated ourselves.

[Uni-Clip]

Chris, Chris, Chris. You are forgetting something. My area has been in recession for the past few years. Our major industries have been decimated (actually, now we are starting to move out of it, while the rest of the World moves into it).

What was the result? Four stores closed down (none of mine). All of these stores were low end places that did not sell AR to everyone, did their own coatings, and such. The ones who survived and were profitable were the doctors and us. Why? Because we differentiated ourselves.

I don't think Chris meant to offer low end products with less tangible qualities. "Value Products" are probably better words to describe what sort of products independents should carry during a possible recession. There are indeed suppliers offering products with equal tangible qualities, if not better, to those high end, branded ones, but selling at substantial discounts due to lack of a designer name(intangible quality). When cash is short, I think consumer will tend to go for these. Independents just have to pay more effort to explore these sources(go to the back of exhibit floor) and act more professionally as product consultant to customers rather than counting merely on brands.

In view of the recent signs of possible recession, we actually postponed our negotiations on brand licensing for the next 2 years to concentrate on value lines. This is our response to a possible recession, as a frame manufacturer!

One more word in response to Optirep's comment on lowering interest rate to boost up the economy, which I believe most Americans are relying on. If Optirep will travel more out of US, he will realise he's a lot poorer than a few years back, when converting to foreign currencies. US inflation has been tame in the past because Chinese manufacturers has been absorbing the currency loss(our receivables). With further depreciation of the dollar(if cut rate next week?), we'll soon be forced to increase our export prices. Imagine all the Chinese manufacturers(not just optical) increase prices at the same time, amid more jobs losing in US, you'll surely see economic crisis.......

Lak Cheong
www.freeformeyewear.com

[For-Life]

Some of Chris' points are valid. Why tint out of house when you can do it in house? But when he said to not sell things like AR, that is pushing low end products with less tangible qualities, thus lower value.

[Chris Ryser]

I don't think Chris meant to offer low end products with less tangible qualities. "Value Products" are probably better words to describe what sort of products independents should carry during a possible recession. ............................................................ ..

There are indeed suppliers offering products with equal tangible qualities, if not better, to those high end, branded ones, but selling at substantial discounts due to lack of a designer name(intangible quality). When cash is short, I think consumer will tend to go for these.

Imagine all the Chinese manufacturers(not just optical) increase prices at the same time, amid more jobs losing in US, you'll surely see economic crisis.......

Lak Cheong
www.freeformeyewear.com

Very well said.......................and makes good sense.

2-3 years ago Optiboarders would not believe that most of the frames they were selling had been produced in China. China was just purely scrap, today everybody even accepts LUX branded frames made in China and purchases them at prices that are equivalent to having been made in Italy.

I just bought a good brand faucet unit for my kitchen sink and the salesman at Home Depot explained to an old women that 97% of the well known brand products were made in China.

Lak you are right brand and high end frames today are mostly different in price and not quality.
Most of today's opticians have never taken any material courses or visited frames factories to see how frames are constructed. So they are not really able or qualified to judge on the quality of a finished frame. They take the salereps word and when given a warranty they go for it as they can not loose.

In my business we are much more careful when purchasing bulk chemicals and packing material from bottles to boxes. When times are good you order from your standard supplier who gives you good service and quality and has been a decent supplier forever.

However when customers purchase products at longer intervals and are suddenly paying in 60 days than the standard 30 they kept for many years you know its time to look at yourself and see that you can streamline your purchasing habits in a more advantagous way.

The you suddenly find new suppliers selling the products at a much lower price, charge less for delivery, are willing to sell smaller quantities and on and on.

My neighbour factory makes wooden stairs for the construction industry with the US Home Depot as his biggest customer. He lays off at least half the workers for 3 days a week, so he had to adjust this way.

There are many ways of preparing for rougher times as long as its done because if you dont, your business might not live through an economic hurrican.

[Chris Ryser]

09/17/07
Welcome to the Reuters Before the Bell news mail.

Alan Greenspan has been talking away over the past couple of days as his long-awaited memoir hits the stores, and one of the things the former Fed chief is saying is that the policymakers should be careful about cutting interest rates.

That's not something Wall Street wants to hear at a time when it's both banking on a rate cut at tomorrow's Fed meeting and wigging out over what's looking like a global credit mess. Right now, mounting troubles at British bank Northern Rock is causing the worry to trump the hope, and stock futures are pointing down.

http://www.reuters.com/investing

[Chris Ryser]

Fed slashes interest rates to buffer economy

Tue Sep 18, 2007 4:18pm ET


By Mark Felsenthal
WASHINGTON (Reuters) - The Federal Reserve on Tuesday slashed U.S. interest rates by a hefty half-percentage point in a bold bid to shield the economy from a housing slump and financial turbulence, sparking a big rally on Wall Street.

The unanimous decision by the central bank's policy-makers took the benchmark federal funds rate, which governs overnight loans between banks, down to 4.75 percent, its lowest since May of last year. The Fed also cut the discount rate it charges for direct loans to banks by a half-point to 5.25 percent.

See whole story: http://today.reuters.com/news/articl...xml&src=nl_dai

[Uni-Clip]

USD dropped quite a bit after the rate cut and looks like it's going to spiral(down) out of control.........Expect frame and lens suppliers going to increase their price soon. We already got calls from parts suppliers requesting price increases even before the Jan 1 review date. Some even ask to change USD quote to RMB quote.......

Lak Cheong
www.freeformeyewear.com

[Chris Ryser]

.........Expect frame and lens suppliers going to increase their price soon. We already got calls from parts suppliers requesting price increases even before the Jan 1 review date.

The Canadian Dollar has come to par with the US Dollar.

That is a devaluation of the US dollard of 45% over the last 2 1/2 years.

Americans will face higher prices very soon on everything that is imported.

A large electronics on line dealer out of China (everything about 45% off US prices has changed his pricing for US dollars to Euros.

[tmorse]

Chris, Chris, Chris. You are forgetting something. My area has been in recession for the past few years. Our major industries have been decimated (actually, now we are starting to move out of it, while the rest of the World moves into it).

What was the result? Four stores closed down (none of mine). All of these stores were low end places that did not sell AR to everyone, did their own coatings, and such. The ones who survived and were profitable were the doctors and us. Why? Because we differentiated ourselves.

Anyone in business know that in tough times, repairs to old glasses go up and volume on New Rx glasses is lower. A reminder that potential bad times requires an adjustment in business philosophy is good advice.:cheers:

[Chris Ryser]

Anyone in business know that in tough times, repairs to old glasses go up and volume on New Rx glasses is lower. A reminder that potential bad times requires an adjustment in business philosophy is good advice.:cheers:

tmorse.........thank for voicing your opinion. We all will have to adapt..........more careful purchasing and take precautions so that customers will notgo elsewhere.

[For-Life]

Anyone in business know that in tough times, repairs to old glasses go up and volume on New Rx glasses is lower. A reminder that potential bad times requires an adjustment in business philosophy is good advice.:cheers:

Adjustment is good advice. But that philosophy is not. Things have changed a lot in these many past years.

[Chris Ryser]

Citigroup says quarterly profit to plunge
Mon Oct 1, 2007 2:18pm ET


NEW YORK (Reuters) - Citigroup Inc (C.N: Quote, Profile , Research), the largest U.S. bank by market value, said on Monday its quarterly earnings will drop 60 percent on $5.9 billion in losses and write-downs from subprime and leveraged loan woes, fixed income trading, as well as weakness in its consumer business.
The profit warning came on the same day that Swiss bank UBS AG (UBSN.VX: Quote, Profile , Research) disclosed $3.4 billion in losses, driven by some of the same factors, and raised questions about whether other banks that have not yet reported third-quarter results will also warn.

See the story at: http://today.reuters.com/news/articl...xml&src=nl_dai

[rbaker]

And, on that news the DJIA hit an all time high. Please try to expand your perspective beyond your pessimistic view and focus on reality. Just remember, the economy as a whole does not necessarily reflect your personal business position.