2009 R.I.P. and those Dead Cat Bounces...

[BocaBum99]

That's why I don't wear a watch.

I routinely wear a diamond studded Patek Philippe on one wrist and a $14.99 Casio on the other just to throw them off.

 

[bizaro86]

Maybe Canadians are more conservative, but I know a number of people who could easily afford to buy hotel branded timeshares in Hawaii from the developer and pay cash who wear cheap watches. It is also possible they're all just engineers who have no sense of fashion or taste. (As a note to fair comment, I work for engineers, being one myself)

It's possible that those salesman are cutting out good prospects using the watch technique. Although in fairness, maybe people who are too practical (or cheap, depending on your POV) to buy an expensive watch aren't likely to buy a big bucks timeshare anyway.

Michael

 

[eal]

From a fellow Canadian/Calgarian

I don't pay more than $5 for a watch or $1 for a timeshare...

 

[bnoble]

I know a number of people who could easily afford to buy hotel branded timeshares in Hawaii from the developer and pay cash who wear cheap watches...Although in fairness, maybe people who are too practical (or cheap, depending on your POV) to buy an expensive watch aren't likely to buy a big bucks timeshare anyway.

We have a winner!

 

[thinze3]

... If they had the cash to afford the pricey watch, they probably got (and keep) their money by making good deals.

Never knew a TS Sales weenie who let the customer's finances stand in the way of a sale.

Cheers

Or the opposite.

The middle-aged gentleman with the Rolex , the bermuda shorts and the old beat up Panama hat can pay cash. This guy to the left.
The fellow with the rolex, name brand shades and shirt probably will have to finance and may be maxed out on his credit from buying the watch. The guy in the middle.


ONLY KIDDING!

 

[Twinkstarr]

I think this is an age old problem with salespeople, not something new that sprung up.

My late mother worked in an exclusive woman's clothing store, the sales ladies were always getting called to meetings because they would ignore the "woman who dressed like the cook" that paid cash for a seasons worth of clothes vs. "society woman dressed to the nines" that put her purchases on credit that took months to pay if ever.

Mom worked in accounting, so she used to know back in the 1950's who the Society page deadbeats were.

 

[mas]

...They could have different rooms where you wait for the salesrep to come in and sell you a timeshare - the "Rolex room", the "Casio room", the "Timex room", and the "Can't afford a watch" room. I could see folks buying a higher priced watch to get into the right room...

Boy; this is a great idea...

:hysterical:

So true...

 

[PerryM]

Just 2 categories is what the timeshare industry will settle for...

Honestly I think that the timeshare industry will settle for just these two categories of potential buyers:

• Has a heart beat
  
• Rigor Mortis hasn't set in yet

 

[calgarygary]

Honestly I think that the timeshare industry will settle for just these two categories of potential buyers:

• Has a heart beat
  
• Rigor Mortis hasn't set in yet

I think your underestimating the industry. Isn't part of their training learning to work puppet strings?

 

[bizaro86]

Quote:
Originally Posted by PerryM
Honestly I think that the timeshare industry will settle for just these two categories of potential buyers:

Has a heart beat

Rigor Mortis hasn't set in yet


I think your underestimating the industry. Isn't part of their training learning to work puppet strings?

This attitude on their part is probably part of the problem with this industry. If they focused on selling timeshares to people who could afford them, you'd have less foreclosures, delinquent MFs, and people dumping their units resale for pennies because they can't afford them.

Additionally, if you have satisfied customers (admittedly a big IF for some systems/resorts) you'd have a better qualified group of owners and their friends/family to upsell to.

Michael

 

[MuranoJo]

I see it all the time--Example: I run into a high-end furniture place on my own, wearing jeans and tennies and I get a very different response than when I go in with jacket, nice shoes, and hubby. Too funny, and too sad for the sales people. Their major loss.

 

[teepeeca]

I wear a GOOD watch !!!

Pity---Pity !!!

If it takes a "good watch" to be "marked" as a "good" timeshare prospect, I guess that leaves me out. Depending upon where I am going, I "might" wear a "good" watch, OR, one that I bought for $19.99 !!!

Whoopt-De-Dooo !!! What in the HE** does wearing a "good" watch have anything to do with "if" I would want to buy a timeshare, or not ??? I "sorta hate" being "marked" that either I "CAN" or "CAN'T" buy any timeshare !!! "IF" I want to buy a timeshare, I will, if I don't, I won't.

I DO NOT own "branded" timeshares---really don't need them, BUT, I "DO" occupy MANY Hawaii timeshares, and am VERY happy with them. (How about 8-12 weeks of timesharing in Hawaii every year---DO NOT own that many "Hawaii" timeshares---BUT, I "CAN" get Hawaii timeshares that I want !!!) I guess that I don't want to pay $60 for two sandwiches and two mai-tai's at some Hawaii resorts---(see other threads---Hawaii boards[?[)---but I really "DO" have enjoyment in Hawaii !!!

Tony

 

[LLW]

My advice:
(If you should care) DO NOTHING – don’t buy and don’t sell. Use the timeshare exactly as the developers sell them – hold on to them and take fantastic vacations.
**************************************************
So my new advice is:
HOLD off buying or selling a timeshare unless 2 bags of groceries cost more.
**************************************************
Never buy a timeshare that costs more than the free gift the developer hands out.
**************************************************
Aggressive buyer:
Buy when the timeshare costs less than the MF.

Conservative buyer:
Buy when the timeshare costs less than your wrist watch.
**************************************************
Now we need some rules for selling..... (and not the $1 on eBay one)

So Perry, which of these advice are you following and why? Looking at ebay is so much fun, and a great exercise in self-discipline!

 

[PerryM]

Set your trap lines and wait for the prey....

So Perry, which of these advice are you following and why? Looking at ebay is so much fun, and a great exercise in self-discipline!

My general advice is to just do nothing - certainly don't panic and sell your timeshares for $1 on eBay. There is an entire year for things to change either for the better or worse - I'm betting on much worst but that's just a WAG on my part.

I like renting out expensive Marriotts at ski resorts and I have my eyes open for a once-in-a-lifetime bargain and that means bypassing the resellers -no need to give them $2,500 or so since I can use a closing company myself.

Name a ridiculous price for a fantastic resort/unit/week and cut that in 1/2 and wait for the price to come to you. If you can afford the lifetime MFs that come with these fantastic bargains.

But don't get greedy and snap up too many - the actual resort will have its own set of problems that might become yours too.

So set your trap lines folks...and wait....

P.S.
To recap: in our position we don't need another timeshare for our use. I'm looking for rental inventory only and have a rental plan that will justify a timeshare at a certain price point. It's just a business decision on my part to buy more.

If you do buy don't be upset if prices tank below your purchase price - I see nothing to indicate that a bottom is forming now in real estate. So far timeshares are lagging real estate by 2 years. I'd bet that when real estate does bottom out timeshares will lag by at least 2 years.

So that ridiculously price point I talked about should appear to be a joke to you now - it could become reality later and if you don't set a price point now you will just keep lowering your price until the rebound occurs.

Use some indicators like Marriott starting to exercise the ROFR and throw in that Dead Cat Bounce as a warning that even Marriott might be wrong and get all the inventory it wants and stop the ROFR again.

 

[toocherie]

I personally like the Disney comment - "prepaid vacations".
BUT, what are the MF's at the Disney resorts? Are they comparable to Marriott?

My MF's for 160 points at Saratoga Springs are around $700 for 2009--less than my MF's for the Marriott I just bought (which is $900).

 

[bnoble]

A full week, in peak but non-holiday time, in a 2BR in Disney is no less than about $1,050---that's if you use BLT points (the cheapest dues) to reserve at Old Key West (the cheapest points-per-night). OKW owners pay more like $1,350 in annual dues for that week.

 

[thinze3]

... So far timeshares are lagging real estate by 2 years. ...

WHAT ???

Perry, Marriott resale "selling" prices have dropped by as much as 50% or more. Pick a place, Hawaii, Desert Springs, Fort Lauderdale. Do you know of any single location where real estate prices have dropped by that amount, much less the entire market?

 

[PerryM]

WHAT ???

Perry, Marriott resale "selling" prices have dropped by as much as 50% or more. Pick a place, Hawaii, Desert Springs, Fort Lauderdale. Do you know of any single location where real estate prices have dropped by that amount, much less the entire market?

I'm talking about developer prices. As far as I know no major developer has reduced their sales prices. These are not "specials" but everyday developer sales prices.

But I'm just guessing here - I don't keep up with but a few developers.

As I've said elsewhere here when Marriott reduces their normal and customary prices by just 1 penny the timeshare bubble has burst. 2 years after real estate has peaked the timeshare industry seems to be oblivious to the real world.

I think it would be worth keeping a chart of Marriott, Westin, Westgate, Wyndham, WorldMark as to when these major developers start lowering their asking prices. These would be their posted asking prices.

Smaller developers may already have started lowering prices - I don't know.

Once Marriott stopped exercising the ROFR prices started falling - you would expect this if you believe the ROFR was responsible for higher resale prices. If you didn't believe in that concept I guess maybe lower average temperatures around the globe might be the culprit for falling Marriott resale prices - I'm just guessing here.

 

[Vacation Dude]

Just check eBay completed sales listings for timeshares and it confirms the timeshare market has crashed.

 

[rsnash]

Also on eBay, many sellers are paying the closing costs. I'm now hoping to purchase something where all you pay is the 2009 maintenance plus winning bid.

There were two auctions for the same resort, one had 0 closing costs (MF+bid), one had a big notice about the $250 discount off closing, but when you looked at the bottom of the page, there was still over $800 in closing costs & transfer fees (plus MF+bid). Which one would you bid on?

I wonder if in a couple of months (well after 2009 MF are (hopefully) paid, ads will have 0 closing costs and 2009 MF included, so all you pay is winning bid and start w/MF in 2010. I don't think prices could get any lower unless they paid you 2010 MF to take it over!

 

[tombo]

.Once Marriott stopped exercising the ROFR prices started falling - you would expect this if you believe the ROFR was responsible for higher resale prices. If you didn't believe in that concept I guess maybe lower average temperatures around the globe might be the culprit for falling Marriott resale prices - I'm just guessing here.

Perry resale prices fell all spring and summer while ROFR was being exercised. Marriott was still ROFR'ing early fall 2008 as prices kept falling. If ROFR kept prices up, they wouldn't have fallen until October or November when they stopped using ROFR. Of course while prices fell and Marriott continued to ROFR, the faithful somehow believed that ROFR was saving them. Honestly the biggest drop in resale prices on Marriotts occured this spring and summer while ROFR was occuring. Prices have continued to drop after ROFR has ceased, but they were dropping before, and the percentage of drop is IMO less since ROFR ceased.

Of course when the economy improves sales will increase before Marriott ever ROFR's a week. Sales will continue to increase in price until Marriott feels they can make a profit buying weeks. Once they ROFR the first week, any price increase on the resale market will be credited to the magic of ROFR ignoring the fact that resale prices were rising before ROFR resumed.



The 10 Rules of ROFR given by Marriott to all the faithfull:

1.If prices drop while we are ROFR'ing, you must continue to believe that ROFR keeps resale prices high (disregard the facts).
2.If prices CONTINUE to fall after ROFR ceases, that will be proof positive that prices fall when there is no ROFR. (All of our faithfull must ignore the fact that prices fell while we ROFR'd, but instead you must focus exclusivelly on any price drops since ROFR stopped).
3. ROFR props up your resale prices. We have no proof that it actually props up prices, you will simply have to trust us because no timeshare salesman or developer would tell you anything that wasn't true.
4.Once ROFR is stopped, prices can't rise until Marriott starts ROFR'ing again!
5.If prices begin to rise due to a good economy even though ROFR hasn't yet been exercised, ignore the price increases totally as it is an anomally.
6. Even if a situation ever occurs where there are months of increasing resale prices before we ROFR, this fact must be disregarded too.
7. When we do resume exercising ROFR, any subsequent price increases are proof that ROFR props up prices.
8. We invented ROFR to help get our customers high resale prices.(You must ignore the fact that when prices dropped to their lowest points ever in 2008 that we stopped ROFR'ing).
9. We will continue to ROFR to make sure that resale prices at our resorts remain high and to set a floor price (oops we quit ROFR'ing so once again just trust us on this and disregard the facts).
10.You must never question whether ROFR helps you or not. Repeat to yourself again and again, "Thank you Marriott for ROFR".

 

[tarabell]

QUOTE=PerryM;645926]Just got back from 2 wonderful vacations – one at the Hyatt Sunset Harbor in Key West, FL for Christmas week and family and friends vacation at Park City at the Park Plaza over New Years week – thanks WorldMark for the great exchanges (we also own at the Park Plaza). Our Park Plaza vacation had us staying in 3 1-BR units and we had just a ball.

Thank timeshares for the memories.

I’ve been forecasting the “timeshare bubble bursting” for a few years now and I can’t think of a better year than 2009 for it to unravel. For 40+ years the timeshare industry has created a phony market that has little bearing to the underlying real estate that it sells (Disney and other RTU units are exempt). Every Friday we could count on the developer hiking up the prices and warning Ma and Pa who stumbled into the sales gallery for that free gift that a price increase was coming.

You know more about this industry than I ever will, so i have zero reason to doubt any of your assertions.

Well for the past 2-4 years our government has been selling us out for a handful of votes – both parties are guilty of this. So we have come to the point where in Q4 of 2008 the USA has become bankrupt – the total worth of all the folks here and the corporations owned by them can’t equal the unfunded liabilities we, as a nation, owe.

I have said this previously and I'll say it again, although we face major issues, you have no idea how the finaincial systen works (or doesn't). We can print and inflate our way out of default. It will cause major problems if necessary, but not bankruptcy. Second, almost everyone that takes out a mortgage has more debt than their net worth at the time they take it out. This fact doesn't mean that they will go bankrupt. I would guess when you bought your first house, the vlaue of the mortgage exceeded your then CURRENT net worth. As a % of GDP many european countries have a higher current debt ratio than does the U.S. Finally, there is about 7 trillion of wealth that will pass generationally in the next 2 decades. This wealth is about 60-70% of all current federal obligations. Can you say increased estate tax? My guess is that is what will happen.

Bankruptcy of the USA has never happened before (maybe while we fought our war of independence; I don’t know) but we now are in the same boat at some of our largest corporations.

Corporate debt at the fourtune 500 level is the lowest it has been in over 3 decades. You must have missed this.

We only are worth about $57 trillion dollars and our government is handing out trillions of dollars like candy to all those that can then grease the palms of the politicians who are after reelection. $1 trillion is about $3,300 for each man, woman, and child who live in the USA. Throw in interest charges and inefficiencies of collecting that money and that’s easily $5,000 that will have to be paid back for each person.; per trillion dollars Almost every day the government is talking about handing out another trillion dollars – when will it
stop?

The federal government is borrowing at a rate of effectively zero in the short term and 2% in the longer term. when inflation takes hold, much of the interest on the debt will have been free or even a negative interest rate

The largest Ponzi scheme ever created – Social Security – will join the headlines as the “Sub-prime mortgage fiasco”, “Fannie May and Freddie Mac fiasco”, “Ponzi scheme fiasco” and other headlines that point out that our government has gone insane.

No ponzi scheme has the ability to print money. Although it resembles a Ponzi scheme, this argument is pure hyperbole.


What does this have to do with timeshares? I believe they will face reality and implode like the rest of real estate. Many folks look to Q4 2009 to bottom out the real estate market. As of today the timeshare industry hasn’t reflected the 12% loss from the high of a few years ago – the timeshare industry is a phony market which has not reflected supply and demand.

Some timeshare developers will survive and some will probably join the Edsel as an idea that made sense at one time but later folks shake their heads and ask “What were they thinking?”

Some timeshare resorts will probably succumb to owners just walking away from the MFs and developers going belly up.

What to do:
I visit many chat rooms and I don’t come to chit chat normally – I give my opinion and hope to learn other view points. Here are my opinions of the timeshare industry on Jan 4, 2009:

Look at Zillow and see the average USA home fall from $238k in Q4 of 2006 to the average today of about $209k – a loss of 12%.

Buying a timeshare:
For those of you daredevils who think today is a great day to snap up a timeshare use Zillow to find real estate near the timeshare and see what kind of loss they have experienced. Since I was just at Park City, UT, you can look up Utah and see that has suffered the same 12% loss as the rest of the USA. (Park City doesn’t have the details needed to compile the sales stats)

Developer:
So when will Marriott reflect a 12% drop in the sales price for their Summit Watch and Mountain Side? Who knows? But they have decided to ignore reality and just hold their record high asking price while they look for Ma and Pa to stumble into the sales galleries to buy at all time record asking prices.

Do the same with any timeshare you might want to buy and ask the developer why they haven’t lowered their prices like everyone else. Who knows, maybe they might do something for you. Marriott is just an example – pick any developer and do the same.

Resale:
Since some developers have stopped exercising their ROFR resale prices should come down – if not, why not? Can we finally answer the question if the ROFR holds up resale prices - you decide.


Selling your timeshare:
For those of you feeling the pressure of ever increasing MFs and want to sell – expect to get whacked very hard for wanting to sell now. Only you know how much you are hurting and maybe selling your timeshare for $1 feels good now but when timeshares do recover you know you will be kicking yourself in the butt.

My advice:
(If you should care) DO NOTHING – don’t buy and don’t sell. Use the timeshare exactly as the developers sell them – hold on to them and take fantastic vacations.

The RTU timeshares, like Disney, don't reflect real estate prices at all. They are simply pre-paid vacations but if timeshare owners rent their units to cover the MFs expect even Disney to feel the bubble bursting.


When the timeshare bubble bursts and its time to buy:
Zillow will show when the real estate market turns around – the developers, like Marriott, will start to exercise their ROFR and start buying firesale bargains again – this would be 2 indicators to verify that a bottom might be in and its time to buy a once-in-a-lifetime timeshare bargain.

Dead cat bounce:
In the stock market there are false bottoms reported all the time – they have the affectionate title of “Dead cat bounce” – I would certainly expect some in real estate too. So just because a few indicators might show a bottom – there will be 40+ years of phony-baloney prices that will finally reflect reality.

So that’s my opinion – I’m sure you have yours. It will be fun to watch all of this unfurl in 2009 and hopefully some here will do well and not too many will blunder and get stuck.

Just remember that there are bulls, bears, and pigs – the pigs always get stuck.

Conclusion:
We are happy timeshare owners and plan to use them as they are advertised - for vacations and to be passed down to heirs.

Your timeshare arguments make sense to me and you know way more than I do. I bought mine for the smae purpose as you bought yours (bought resale). I do not see it as an investment and realize it is not immune from a cycle of deleveraging. However after deleveraging abates, the next cycle is inflation. That is unless the Fed can mop up all of that liquidity that has been injected (as well as all of the other central banks). My best guess is, no way they accomplish that without some advanced inflation. In fact the banks would welcome some higher than normal inflation. If it gets out of control, then where does that leave a purchased asset vs ongoing increases in vacation costs? That's when the purchase of assets in a depressed cycle makes one look quite bright. My belief isn't if, it's when. Unfortunately, NOBODY knows that answer....we can all only guess

Happy 2009 to everyone.[/QUOTE]

 

[PerryM]

QUOTE=PerryM;645926]Just got back from 2 wonderful vacations – one at the Hyatt Sunset Harbor in Key West, FL for Christmas week and family and friends vacation at Park City at the Park Plaza over New Years week – thanks WorldMark for the great exchanges (we also own at the Park Plaza). Our Park Plaza vacation had us staying in 3 1-BR units and we had just a ball.

Thank timeshares for the memories.

I’ve been forecasting the “timeshare bubble bursting” for a few years now and I can’t think of a better year than 2009 for it to unravel. For 40+ years the timeshare industry has created a phony market that has little bearing to the underlying real estate that it sells (Disney and other RTU units are exempt). Every Friday we could count on the developer hiking up the prices and warning Ma and Pa who stumbled into the sales gallery for that free gift that a price increase was coming.

You know more about this industry than I ever will, so i have zero reason to doubt any of your assertions.

Well for the past 2-4 years our government has been selling us out for a handful of votes – both parties are guilty of this. So we have come to the point where in Q4 of 2008 the USA has become bankrupt – the total worth of all the folks here and the corporations owned by them can’t equal the unfunded liabilities we, as a nation, owe.

I have said this previously and I'll say it again, although we face major issues, you have no idea how the finaincial systen works (or doesn't). We can print and inflate our way out of default. It will cause major problems if necessary, but not bankruptcy. Second, almost everyone that takes out a mortgage has more debt than their net worth at the time they take it out. This fact doesn't mean that they will go bankrupt. I would guess when you bought your first house, the vlaue of the mortgage exceeded your then CURRENT net worth. As a % of GDP many european countries have a higher current debt ratio than does the U.S. Finally, there is about 7 trillion of wealth that will pass generationally in the next 2 decades. This wealth is about 60-70% of all current federal obligations. Can you say increased estate tax? My guess is that is what will happen.

Bankruptcy of the USA has never happened before (maybe while we fought our war of independence; I don’t know) but we now are in the same boat at some of our largest corporations.

Corporate debt at the fourtune 500 level is the lowest it has been in over 3 decades. You must have missed this.

We only are worth about $57 trillion dollars and our government is handing out trillions of dollars like candy to all those that can then grease the palms of the politicians who are after reelection. $1 trillion is about $3,300 for each man, woman, and child who live in the USA. Throw in interest charges and inefficiencies of collecting that money and that’s easily $5,000 that will have to be paid back for each person.; per trillion dollars Almost every day the government is talking about handing out another trillion dollars – when will it
stop?

The federal government is borrowing at a rate of effectively zero in the short term and 2% in the longer term. when inflation takes hold, much of the interest on the debt will have been free or even a negative interest rate

The largest Ponzi scheme ever created – Social Security – will join the headlines as the “Sub-prime mortgage fiasco”, “Fannie May and Freddie Mac fiasco”, “Ponzi scheme fiasco” and other headlines that point out that our government has gone insane.

No ponzi scheme has the ability to print money. Although it resembles a Ponzi scheme, this argument is pure hyperbole.


What does this have to do with timeshares? I believe they will face reality and implode like the rest of real estate. Many folks look to Q4 2009 to bottom out the real estate market. As of today the timeshare industry hasn’t reflected the 12% loss from the high of a few years ago – the timeshare industry is a phony market which has not reflected supply and demand.

Some timeshare developers will survive and some will probably join the Edsel as an idea that made sense at one time but later folks shake their heads and ask “What were they thinking?”

Some timeshare resorts will probably succumb to owners just walking away from the MFs and developers going belly up.

What to do:
I visit many chat rooms and I don’t come to chit chat normally – I give my opinion and hope to learn other view points. Here are my opinions of the timeshare industry on Jan 4, 2009:

Look at Zillow and see the average USA home fall from $238k in Q4 of 2006 to the average today of about $209k – a loss of 12%.

Buying a timeshare:
For those of you daredevils who think today is a great day to snap up a timeshare use Zillow to find real estate near the timeshare and see what kind of loss they have experienced. Since I was just at Park City, UT, you can look up Utah and see that has suffered the same 12% loss as the rest of the USA. (Park City doesn’t have the details needed to compile the sales stats)

Developer:
So when will Marriott reflect a 12% drop in the sales price for their Summit Watch and Mountain Side? Who knows? But they have decided to ignore reality and just hold their record high asking price while they look for Ma and Pa to stumble into the sales galleries to buy at all time record asking prices.

Do the same with any timeshare you might want to buy and ask the developer why they haven’t lowered their prices like everyone else. Who knows, maybe they might do something for you. Marriott is just an example – pick any developer and do the same.

Resale:
Since some developers have stopped exercising their ROFR resale prices should come down – if not, why not? Can we finally answer the question if the ROFR holds up resale prices - you decide.


Selling your timeshare:
For those of you feeling the pressure of ever increasing MFs and want to sell – expect to get whacked very hard for wanting to sell now. Only you know how much you are hurting and maybe selling your timeshare for $1 feels good now but when timeshares do recover you know you will be kicking yourself in the butt.

My advice:
(If you should care) DO NOTHING – don’t buy and don’t sell. Use the timeshare exactly as the developers sell them – hold on to them and take fantastic vacations.

The RTU timeshares, like Disney, don't reflect real estate prices at all. They are simply pre-paid vacations but if timeshare owners rent their units to cover the MFs expect even Disney to feel the bubble bursting.


When the timeshare bubble bursts and its time to buy:
Zillow will show when the real estate market turns around – the developers, like Marriott, will start to exercise their ROFR and start buying firesale bargains again – this would be 2 indicators to verify that a bottom might be in and its time to buy a once-in-a-lifetime timeshare bargain.

Dead cat bounce:
In the stock market there are false bottoms reported all the time – they have the affectionate title of “Dead cat bounce” – I would certainly expect some in real estate too. So just because a few indicators might show a bottom – there will be 40+ years of phony-baloney prices that will finally reflect reality.

So that’s my opinion – I’m sure you have yours. It will be fun to watch all of this unfurl in 2009 and hopefully some here will do well and not too many will blunder and get stuck.

Just remember that there are bulls, bears, and pigs – the pigs always get stuck.

Conclusion:
We are happy timeshare owners and plan to use them as they are advertised - for vacations and to be passed down to heirs.

Your timeshare arguments make sense to me and you know way more than I do. I bought mine for the smae purpose as you bought yours (bought resale). I do not see it as an investment and realize it is not immune from a cycle of deleveraging. However after deleveraging abates, the next cycle is inflation. That is unless the Fed can mop up all of that liquidity that has been injected (as well as all of the other central banks). My best guess is, no way they accomplish that without some advanced inflation. In fact the banks would welcome some higher than normal inflation. If it gets out of control, then where does that leave a purchased asset vs ongoing increases in vacation costs? That's when the purchase of assets in a depressed cycle makes one look quite bright. My belief isn't if, it's when. Unfortunately, NOBODY knows that answer....we can all only guess

Happy 2009 to everyone.

[/QUOTE]


I admit that I’m a neophyte when it comes to the workings of the federal government – they can print money out of thin air and can commit to promises that exceed the worth of all 300+ Million folks that live in the USA. Social Security is the largest Ponzi scheme ever devised and no one seems to care.

At some point all of this will come crashing down on us and the politicians will simply say “What happened?” and plead dumb. Just as the various federal fiascos in the past few months seem to come out of no where so will the mother of all calamities hit us at some point.

This cannot go on forever.

Open your wallet and take out a $20 bill – just what does it represent? It’s not backed by a single thing but the words from our politicians.

The trick is to prepare for all of this and to somehow make a buck or two in the process.

Social Security was created as a Ponzi scheme – the money you put in is used for the benefit of folks who entered the scheme earlier – the very definition of a Ponzi scheme. The way the federal government will postpone its inevitable collapse is to confiscate all the retirement funds and incorporate them. This will simply postpone the collapse a few years.

Our government has a track record of breaking into bank vaults and confiscating gold – IRAs are much easier to confiscate. During WW II our government had no problem forcing oriental Americans into concentration camps. It will happen.


None of these problems is going away and they will accelerate with each trillion new dollars squandered.

Before someone buys a timeshare, even for $1 on eBay, they really need to consider where we stand - its on quicksand.

 

[tarabell]

I admit that I’m a neophyte when it comes to the workings of the federal government – they can print money out of thin air and can commit to promises that exceed the worth of all 300+ Million folks that live in the USA. Social Security is the largest Ponzi scheme ever devised and no one seems to care.

Again, no Ponzi scheme has the ability to print it's own money. Are the future liabilities an issue, yes, a big one. Calling it a traditional Ponzi scheme is inaccurate. It may walk like a duck, but it doesn't quack like a duck, I'll settle for a platypus maybe, but not a duck.

At some point all of this will come crashing down on us and the politicians will simply say “What happened?” and plead dumb. Just as the various federal fiascos in the past few months seem to come out of no where so will the mother of all calamities hit us at some point.

This cannot go on forever.

Open your wallet and take out a $20 bill – just what does it represent? It’s not backed by a single thing but the words from our politicians.

Agreed that is the backing. The thought of backing currency by gold, is now unattainable. It would put such a strain on capital movement that it would bring commerce on a global scale to it's knees. Another point, you can't eat gold, you can't drink it, and industrial use gold is abundant. In fact, it has little intrinsic value except for human adornement. The reason that gold is a hedge against inflation, is becuse we think that it is. No other real reason anymore. I'll take land, food, and water and shelter.

The trick is to prepare for all of this and to somehow make a buck or two in the process.

When delevering is going on (now), cash is king. Assets fall in value, so cash will by more assets in the future. At some point in the cycle the situation reverses. Inflation takes over due to the overabundance of money as the Fed tries to flood the system with money to prevent asset values from falling further. Right now, there is a glut of money out there. Banks normally keep excess overnight deposits of about 2 billion. In December that number got to 265 billion of excess deposits. If there is so much liquidity out there, why is nothing happening? The simple answer is that the money is not moving. The velocity of money is very low. Banks are hoarding capital to prepare themselves for the coming defaults of all kinds of debts. Believe it or not, this eventually ends. At some point the money will start moving again, and there is a lot of it out there. If the fed cannot get it out of the system fast enough, then you get inflation (too much money in the system). At the starting point of an inflation cycle, the worst thing you can have is cash. It's value declines over time, while asset values rise. You want debt (leverage), because you will pay it back in the future with dollars that are worth less than before. Unfortunately, it is difficult if not impossible to time the cycle. You seem to think that assets will never rise in value again. In my judgement, that is incorrect. I would agree with you that they will probably fall further, but at some point they will rise again.

Social Security was created as a Ponzi scheme – the money you put in is used for the benefit of folks who entered the scheme earlier – the very definition of a Ponzi scheme. The way the federal government will postpone its inevitable collapse is to confiscate all the retirement funds and incorporate them. This will simply postpone the collapse a few years.

Cannot agree that the Feds will take this action (although anything is possible). This idea came from a crackpot professor in California. Obviously the right has grabbed it as a political tactic. By the way, I'm not passing judgement. I think Paul Krugman is also over the top in pushing a left wing political ideology disguised as economics (Nobel prize or not). In my mind, a more likely scenario is to devalue the currency through excess supply and pass legislation to hold the benfits at some point in time in the future. This coupled with tax increases is a more likely outcome. The government has already changed the definition of inflation and cost of living several times to lower the real value of the benefit,

Our government has a track record of breaking into bank vaults and confiscating gold – IRAs are much easier to confiscate. During WW II our government had no problem forcing oriental Americans into concentration camps. It will happen.

Fear does cause people and governments to do irrational things, but I still won't buy IRA confiscation.

None of these problems is going away and they will accelerate with each trillion new dollars squandered.

Before someone buys a timeshare, even for $1 on eBay, they really need to consider where we stand - its on quicksand.[/QUOTE]

 

[TheHappyWanderer]

I am a relative newbie to timeshares. I only own one timeshare, and I have probably a stupid question for the experts here. I have also considered getting into the inexpensive timeshares that are basically free (save for the maintenance fees) like Denise bought.

But I always wonder, is there a real risk that if the timeshare market crashes further, and more and more timeshare owners become delinquent on their accounts, that I might end up being stuck paying more and more money beyond the maintenance fees, (or else maybe be stuck paying much higher maintenance fees), to make up for the delinquencies and the poor market for timeshares, so that I end up wishing I never bought the "free" timeshare at all? I mean in that situation, if I can't find another buyer, I can't just renounce my timeshare ownership and walk away right? Or is that situation so unlikely its not worth worrying about?