No doubt about it: the economy is slowing ... or at least losing its luster. That's what you can't help but conclude after reading the anecdotal evidence submitted by readers of this column. (Just look at
and make sure you read JJC's
, who's in the commercial real estate biz: "When the
raised rates last week, a large portfolio deal that we were looking to acquire (for around $58 million) suddenly became worth about 10% less because debt financing became more expensive and available debt proceeds shrank commensurate with the rate rise. Consequently the seller pulled the deal from the market and is now looking to sell off the portfolio in smaller pieces hoping to broaden the range of buyers. The mortgage guys all think that if they raise rates again they might as well go home for the rest of the year."
And there was this, from
: "I could not get anyone to put new siding on my house in suburban Chicago last fall, except at an outrageous price. Now I have three places competing for the bid (all at lower prices than last fall) and all bids say that work can begin immediately. Also, all materials are in stock. I was told by the winning bidder that siding inventory is growing at the
warehouse. You heard it first here."
Indeed, we did, and we thank you for that. But here's another first, from
, who prefers to be called Funding-less in Seattle: "Angel investor money has essentially dried up due to the down market destroying their liquidity. Seed-stage VC firms are hiding and not offering term sheets to even the most promising firms -- I think because perhaps those who have committed to previous funding rounds have no money left to contribute."
But the ultimate sign of a stock-market-related slowdown comes from Subodh, who saw a house in Sunnyvale, Calif. (the heart of Silicon Valley), on the market for one week.
(That in itself is a bad sign.) "And now," he writes, "it has a sign, 'Reduced Price.' " He hasn't seen
for two years. "Does this," he asks, "mean there is trouble in bubble central or it's just a sign of usual summer slowdown?" Yes and yes!
It's easy to understand why after reading
tale. He lives in Seattle, and yesterday his acupuncturist related the story of a daytrader friend who made $130,000 trading in 1999. However, she lost $260,000 in April. Another friend of the acupuncturist has filed for bankruptcy "and has had to sell their house due to margin calls this year." Finally, Steve has his own tale of woe (which his acupuncturist is sure to pass on to others): His own brokerage account stood at $3 million at the end of February. Last night it was $700,000. "Hell yes," he writes, "we are not spending like we were just two months ago."
Steve, you're not alone.
writes and says that he works for a company where the average sales rep makes around $150,000 a year. Most are in their early 30s and most have been hurt, badly, by the market's rout. For example, he lost $400,000 and has cancelled plans to buy a new house closer to the beach. "Was shopping for new Mercedes; my Toyota is fine for now." Then there's Mike, who lost $200,000, and had to settle for a $250,000 condo instead of the $600,000 home he was looking at. Mark, meanwhile, lost $700,000 and "has stopped spending completely. Thinks the world is going to end. Used to drop $500 every weekend on drinks at the clubs. Says he is going to sell his $60,000 BMW." The list goes on and on...
My favorite comes from Steve Turadek, who writes, "These slowdown anecdotes remind me that my 'broken headlamp' indicator has been twitching. This is roughly the percentage of cars on the road with a burned-out head lamp. It has been two or more years since I had seen many. About five months ago I started noticing them again.
"Lowlifes like me who buy used bulbs at the junk yard for 50 cents don't sweat this expense. I guess the guys who pay the dealer $40 for the experience would hold off. Still, I had considered this to be a tight indicator of the pits of economic despair."
Well, I don't think it has gotten
bad yet. There are still
of "Help Wanted" signs where I live. Remember, we're just talking about taking the upper edge off the economy. But that leads to something else.
says that if I'm asking for anecdotal evidence of a slowdown, I ought to ask for examples of the reverse: signs of business increasing. "After all," he says, "let's get both sides of the story." Right he is, so if you know of any anecdotal contrary indicators, send 'em along and I'll include them in the next edition of ... The Hotline.
But wait, before we go, I just can't get this Costco
surprise out of my head. They blame it in part on the stock market, and maybe so. But on our TV show a few weeks ago I questioned a guy who likes Costco, saying that it appears that the competition from my local
is a real threat to the warehouse clubs. I'm now buying club-type stuff at the grocery store, stocking up whenever they have club-like savings. I actually will clean out a shelf!
And rather than going to Costco once or twice a month, I now go every two or three months to stock up on bottled water, about the only thing the grocery store doesn't compete on. Am I alone with this observation/experience? That, my friends, really
it for today's edition of ... The Hotline. Over and out.
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
email@example.com. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.