Into the Storm

| November 18, 2006

100 Dollar Bill

I get to have some interesting encounters in my job. For the last 18 months I have been campaigning first in the DoD and then in the commercial space to bring to market a new kind of software. It’s job in life it digest massive amounts of data and event information to come up with a series of metrics and conclusions about what is going on, and what the state of key indicators and factors are. This applies to how much money is sitting in your bank vaults, how many customers are visiting your property (and how much they are spending) to things such as “show me the last 4 images of the Korean Yongbyon reactor that have trucks in them”.

This software tends to get wired into the guts of the business cycle for our customers. We set it up and maintain it, and as such we get to occasionally glimpse what is going on. Without naming names, and without getting anyone (especially myself) into trouble, here is some of what seems to be emerging.

Hospitality Customers – In general they are down in every category. The number of people coming to visit and spend time at these destinations are down between 10% – 20%. Fewer people are coming, and when they come they are spending less. The last 3 years have been very good for these folks, and they know that leaner times are coming. When they read the results of our software, they agree that things are slowing down now.

Financial Customers (Credit) – Our customers tend to focus credit to consumers. The application for new credit, falling off rapidly. In addition a higher percentage of exiting debt is going bad. Surprisingly enough this is even reaching into some “seasoned” credit is going bad. Seasoned credit are accounts that have been around for a few years, and have established and stable payment track records. They are looking for a slowdown, according to them things have actually started to slow down now.

In case you may not have read, the US economy is slowing down. Some segments that are “wants” are slowing down a bit faster than the “needs”. That does not mean that the US economy is in a recession, or going into one. But it does mean that it is trending this way now.

Update

Wonderful site for tracking the economy is Calculated Risk. The most recent post has a clip from the Orange County Register’s interview with economist Chris Thornberg. The key point is:

Q. What might change your outlook — good or bad?
A. The key is consumer spending. If people respond to a cooling in housing prices by cutting back on home spending it could get ugly out there in the rest of the economy very quickly

While my evidince is not a very large data set, it does point to a measurable slowdown in consumer spending.

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Category: Economics, Information Technology, Main, Recession Watch

About the Author ()

Bruce Henderson is a former Marine who focuses custom data mining and visualization technologies on the economy and other disasters.

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