[linlithgowoil]

i actually think airlines wont be the first to suffer. they are propped up by the government, unlike other industries.

i think all the superfluous crappy service and luxury industries are already starting to suffer. in the UK, it has been shown that this time last year, people had more disposable income. so, going on the assumption that we have less disposable income now, and that food prices and energy prices are continuing to go up, people just plain won't be able to afford to eat at restaurants as much, buy £2 cups of frothy coffee (which probably cost about 1pence to make and tastes the same as instant nescafe) and have their gym memberships (which they never actually use - its just having a gym membership that matters... b*astards).

i am very much looking forward to the collapse of the service economy in scotland. thats all we bloody do here. call centres, banks, financial services, hotels, bars, all that crap that produces no wealth at all. thing is, once the service economy collapses, what next? there's no heavy industries now, no coal mining, not all that much agriculture. i foresee a lot of emigration from Scotland (there is a lot already).

[Ludi]

$this->bbcode_second_pass_quote('linlithgowoil', 'i') am very much looking forward to the collapse of the service economy in scotland. thats all we bloody do here. call centres, banks, financial services, hotels, bars, all that crap that produces no wealth at all.

[ohanian]

Q: Which sector of the economy will be hit first?

A: The sector of the economy which will be hit first have the following characteristics.

1) Highly competative hence very low margin.

2) Depend on transportation as one of its fix cost.

3) Depends on the main economy booming along.

Thus

The small/compact car manufacturing industry.

The airline industry.

The dairy industry.

The tourism travel industry.

[Pops]

If I bold all my type does that mean I’m right?

Anyway I’m not sure airlines are the indicator everyone imagines, they were over extended with too many seats and too much competition way back, so oil prices only added to their problems - it didn’t cause them. And the price of oil certainly hasn’t hurt Toyota, which just had its largest quarter ever, IIRC, though GM & Ford made their own bed and will have to lie in it.

But look at it a different way, if filling the tank is done with cash or ATM and goes from say $30 to $50 a pop, does that mean you quit saving for vacation or flying to Aunt Edna’s funeral - or more likely don’t put those trips on the credit card? It seems to me you would cut back on other out of pocket expenses first: maybe a few less movie rentals and pizzas or 1 or 2 less candy-coffees that week. BTW I heard a tidbit the other day that box office receipts were down the last 10 weeks in a row – going to the movies is an out-of-pocket type expenditure.


Or when you go to the grocery with your $200 budget and it’s gone faster than it used to be, do you think, ‘man we won’t be able to fly to England this year’, or do you simply forego a couple of boxes of Twinkies and that pre shredded Arugula salad mix?

Transport costs will rise and in turn the cost of everything will ratchet up but don’t forget that just about everything is transported to you from a long distance except maybe bread, milk and eggs. The transport sectors will slow but they will only slow in tandem with all the companies whose products are deemed “expendable” to the middle classes.

I guess what I’m thinking is there is so much little Stuff that gets purchased which is completely useless that pointing to the things people really look forward too like vacations and new cars doesn’t seem the right direction - at least in the short term. More likely the trend will be an across the board slowing as more and more money is tithed to Exxon and Aramco.


BTW, did someone mention the packaging industry?

“These price increases have hit firms that rely on plastic for packaging. Pepsi bottling group for example reported last month that net income for the first quarter 2005 was $39 million, compared to 2004’s first quarter income of $50 million. This is the first time that quarterly profit has fallen in almost two years.”

Food Production Daily
--------
One thing I won't miss is those hard plastic packages that take a pair of tin snips to open that protect a $1.98 item!

[Leanan]

$this->bbcode_second_pass_quote('', 'O')r when you go to the grocery with your $200 budget and it’s gone faster than it used to be, do you think, ‘man we won’t be able to fly to England this year’, or do you simply forego a couple of boxes of Twinkies and that pre shredded Arugula salad mix?

[smallpoxgirl]

$this->bbcode_second_pass_quote('Russian_Cowboy', 'T')he supply of USED compact cars is FIXED. If everybody opts for buying a used compact car, there are not going to be enough used compacts for everybody. Somebody will have to buy new compact cars. The price of used small cars has already increased significantly from one year ago.

[lizzybeth]

Don't forget other discretionary spending like:
Restaurants
Music - CDs, Concerts
Clothing (to some extent)
Jewelery
Cosmetics
Home Improvement


I see it already. Everyone at my office is pinched. Except management!
My groceries are WAY up. We are eating balony sandwhiches instead of our usual deli meats. Rib Eye steaks are $9.99 a pound here ON SALE.
They were like $5.99 on sale a few months ago.
I sell Mary Kay cosmetics on the side. All my customers are already cutting back.

[Janick]

In North America, consumers will start spending less. They'll cut out anything that is a luxury and they will hang on longer to some things instead of upgrading (example: computers, cars). Outings (restaurants, movies) will be reduced.

The end-consumer is ultimately what drives a big part of the economy. Anywhere the end consumer will decrease spending, that is what will hit the economy first.

Up here, food hasn't gone up that much. Besides gas prices, I don't think many people here have contracted their spending. The only visible part of the economy that is slightly down is real estate. But that's just because the prices have become ridiculously high.

[cube]

$this->bbcode_second_pass_quote('smallpoxgirl', '.')..... There is not a simple solution to this problem. I think the bottom line is that the standard of living has to drop.

[smallpoxgirl]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('smallpoxgirl', 'I') think the bottom line is that the standard of living has to drop.

[Pops]

I think Wally-World is the canary.
“Wal-Mart's sales have suffered in recent quarters as soaring gasoline prices cut into household budgets, and the world's No. 1 retailer said it expects energy prices to weigh on second-quarter results too.”
http://news.yahoo.com/s/nm/retail_walmart_earns_dc

This article points out that the lower income folks are feeling the squeeze and the poor Waltons are seeing it first, making a paltry 2.5 BILLION in Q1! Up from last year but not the normal growth they are used too.

In contrast, Target did all right because they aren’t just selling the ‘lowest’ price.

[marko]

Given the debt-ridden nature of the US economy (on which most of the rest of the world depends) and the US economy's dependence on consumer spending, I think that the first sectors to be hit will be retail and auto manufacturing, as people cut back on spending, followed by the real estate, construction, and financial sectors, as people go bankrupt and default on mortgages, and as housing prices collapse.

When the financial and retail sectors go, so will the rest of the economy, which now depends on finance and retail.

[PlannerBee]

Trading my 2004 Dodge Ram 2500 Hemi quad cab short bed on Monday for a Subaru Impreza sedan. I am saving about $125 a month on the payment and about $50 a month on insurance. As for the gas....well it gets about double the Dodge. I figure I'll save $75 a month in gas. I think that is a nice savings. Thing is...I like my truck. It so purty. I luuuuuuuv my truck. It's white and really shiny and I feel so safe in it. But, I am embarrassed to drive it now knowing what I know about oil. My friend suggested I get a bunch of blow up dolls and position them in the truck. That way people will think I need a big vehicle like the Dodge and I won't look so squanderous. I can't do that. She made me laugh though. Boo hoo. Bye truck.

[killJOY]

I volunteer for the local fire/rescue. When we go on a "dub" call--alarm sounding somewhere at 2 am--and we're sitting there idling all that diesel fuel away, I could almost scream. How will these fleets manage to operate at current capacity when fuel prices triple? I don't think they will, in short.

[Triffin]

CEO of SW Airlines ( LUV ) on CNBC this
morning .. BTW he's CEO of the only profitable
airline in the industry and that is primarily
due to the fact that they fly only one plane ..
The Boeing 737 series .. Anyhoo and I quote ..

"No one in our industry can be profitable at
$50.00 oil with the presently available equipment"

Triff ..

[RdSnt]

$this->bbcode_second_pass_quote('smallpoxgirl', '
')Yeah. It's very sad, but I think that many environmental laws will start to seem like an untenable nuisance once people start to really struggle. I fear for the fate of the forests. Things don't look bright.

[Leanan]

I fear you are correct. The effects are unpredictable, and could be nasty. Even if we don't get rid of our environmental laws, you know countries like China will be burning coal like crazy. The resulting global warming will impact us all.

It already is. Glaciers are melting all over the world. Some cities which depend on summer glacier melt for their water supplies are facing the end of their water supply within the decade, when the glaciers melt completely. Meanwhile, research on Antartica has shown that the ice sheet there is thicker than they had thought. Hundreds of feet thicker. This is bad news. If it melts, ocean levels could rise 15 ft. or more. This would be a disaster for coastal areas around the world, and some low-lying island nations would go under completely.

Scientists are also worried about what the sudden flood of cold, fresh water will do to ocean currents. While climate change is generally gradual, it can be quite sudden if ocean currents stop. An example is 1816, "the year without a summer":

http://www.islandnet.com/~see/weather/history/1816.htm

In 1816, it snowed in July in the eastern U.S. A killing frost hit in mid-August. All the crops were lost.

Though it was a volcanic eruption that was likely the cause, modeling suggests the mechanism was a sudden interruption of the "global conveyor belt," the temperature and salinity-driven current that circulates through the Atlantic and keeps Europe so much warmer than the U.S. in winter. So weirdly, global warming may cause some parts of the world to actually get colder.

[RdSnt]

$this->bbcode_second_pass_quote('Leanan', 'I') fear you are correct. The effects are unpredictable, and could be nasty. Even if we don't get rid of our environmental laws, you know countries like China will be burning coal like crazy. The resulting global warming will impact us all.

It already is. Glaciers are melting all over the world. Some cities which depend on summer glacier melt for their water supplies are facing the end of their water supply within the decade, when the glaciers melt completely. Meanwhile, research on Antartica has shown that the ice sheet there is thicker than they had thought. Hundreds of feet thicker. This is bad news. If it melts, ocean levels could rise 15 ft. or more. This would be a disaster for coastal areas around the world, and some low-lying island nations would go under completely.

Scientists are also worried about what the sudden flood of cold, fresh water will do to ocean currents. While climate change is generally gradual, it can be quite sudden if ocean currents stop. An example is 1816, "the year without a summer":

http://www.islandnet.com/~see/weather/history/1816.htm

In 1816, it snowed in July in the eastern U.S. A killing frost hit in mid-August. All the crops were lost.

Though it was a volcanic eruption that was likely the cause, modeling suggests the mechanism was a sudden interruption of the "global conveyor belt," the temperature and salinity-driven current that circulates through the Atlantic and keeps Europe so much warmer than the U.S. in winter. So weirdly, global warming may cause some parts of the world to actually get colder.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('', '
')Why a middle-class lifestyle now costs you over $300,000 a year