World Economic Crisis - How will it affect our favourite toy?

[frogstudio]

Hi all you dear Lego lovers. I was just watching the news at home about the Worldwide Economic Crash and begun wondering how this would affect ou favourite hobby. Personally, I think that, on one side, most of us will be having less cash to spend on it. On the other hand, and due to this same fact (people having less money to spend and a general retraction in all economies), I'm sad to say that possibly TLG will put on hold many new sets (or at least, that's waht I would do... why realease really good designed and expected sets, such as a new Pirates line and farm sets when people wont be able to buy them and be good sellers????). Well, those are my thoughs... Gloomy, but I would like to hear yours. Cheers to all from down south, in Argentina...

[furious]

The American Economic Crisis more like it.

America needs to understand that the 'world' is what is outside its borders.

[Stash2Sixx]

And many Americans DO understand that!

And judging by the second post in this thread, this topic is looking to take a turn for the worst, so I'm gonna leave my comment at that.

[KimT]

The American Economic Crisis more like it.

America needs to understand that the 'world' is what is outside its borders.

Careful - no flaming.

I'll be watching this topic and if it goes off-topic, I'll shut the doors and close it instantly.

Read the first post and comment on that people.

[Shadows]

The American Economic Crisis more like it.

America needs to understand that the 'world' is what is outside its borders.

You may want to become more aware of the world around you and what is happening in it as well as the global effect the US economy can have. The world is not what sits outside US borders, it's what sits on the entire planet, the US included.

When the US hurts, the world hurts, it's the nature of a global economic model like this.

While the US situation is bad enough on it's own, there are similar problems, failures and bailouts occurring throughout Europe, some because of US weakness, some because of the same kinds of poor decisions and risky loans being made there, and all of that is having an effect outside of those regions (the Asian market, for example).

This is not a US problem, or a European problem, this is just what frogstudio said, worldwide.

How will that effect LEGO? They'll probably do what most companies would in a similar situation, take fewer chances and focus on the core product line. Sometimes, that's just the kind of thing a company should have been doing all along, so I wouldn't view it as particularly negative, just a little boring as the stranger things are set aside in favour of the known winners.

Personally, if I was TLG, I'd reevaluate what lines are selling the best and kill off anything weak.

[KimT]

I think the crisis is actually a Western Crisis.

The appartment I bought 3 years ago rose furiously in value the first 2 years.

Raising the market price from 250.000 EUROS to nearly 300.000 EUROS.

Then the price dropped in the last year or so, back to 250.000 and now it's actually lower, even thought I "fixed" the place up with ethernet, antenna, telephone and cross-link boxes (allowing full control of all lan-sockets).

Plus the ordinary wall fixing and painting.

Total: 8.000 EUROS (which are kinda down the drain )

Luckily I didn't borrow the money in the freed value when the price was up.

A lot of people did and they're to put it mildly in deep shit now.

I think the same thing has happened in the US and thus it's the same problem.

Prices have dropped up to some 30-40% of the market value here and it hurts a lot of people.

Earlier a house could be sold within days, now it takes a year or more

Wether this will affect TLG or not is unsure.

It was predicted to do so last year, but it certainly didn't.

Hopefully Vig-Knudstorp and his people are prepared for this - I am certain they are.

[Tenorikuma]

The current "crisis" is a correction. Hundreds of billions of dollars of bad investments have been destroying wealth, dragging the economy down, and generally preventing people from being able to buy enough Lego.

With the correction, the banks responsible for the bad investments (mostly located in countries with poor monetary policy, like the US) will go bankrupt, and their assets will be transferred to other banks and companies that can use them in a profitable manner. In the meantime, the exhaustion of lendable resources will force people and companies to increase their savings rate for a while, but ultimately we'll be better off than before, and be able to buy more Lego than before, so long as governments don't screw things up more through inflation or something.

In the meantime, Lego is getting an increasing share of business from growing markets in Eastern Europe and Asia. Hopefully that will help to offset any problems elsewhere.

Edited September 30, 2008 by Tenorikuma

[brickzone]

In all probability, really it is just a couple years of a downturn, and many ordinary companies like Lego should weather the storm fine. One has to assume that the worst-case scenario shall not come to pass; that of the Western economic system continuing a downward spiral, with financial institutions collapsing one-by-one and ultimately leading to most business being halted and mass job losses.

Folks with jobs, although they may be worried if they have mortgages etc. and worried about job security, there are plenty of them who will very soon feel richer in real terms - when they have money and others don't. Such people are going to be buying Lego! I am glad that the European Central Bank is concentrating its efforts most on trying to dampen inflation - because that is the one thing that makes everyone poorer. Of course, with money saved in a deposit account, I am also somewhat biased in this respect.

Anyway, Lego seems to be selling quite well as of yesterday in my own area. Maybe people are going for traditional toys, or those they remember in the last recession (early 1980s Ireland), or else toys that last. Whatever the reason, the stores seem to have an extensive range which is selling well. I do look forward to the shops making a bit more effort to get business. We have had very little competition in most areas of retail for the last number of years here in Ireland - due to too many undiscerning well-off consumers who'll just pay any old price.

[Zorro]

Actually we in Belgium feel the crisis equally, the local market (BEL 20) has lost more then 40% since january 2007.

And my bank, Fortis, has totally crashed! An emergency government fund from the BeNeLux governments is pumping 11 billion euros (16,5 Billion USD)into it to save it from going under.

If my bank goes broke, so will I and then I wont be able to buy much Lego anymore (probably would be forced to sell some )

This however is an unlikely event, and even when it goes broke we have received government assurance they will garanty our bank saldo's. But if other banks (like Dexia, who is also in big trouble) goes broke at the same time, there is no way in hell the Belgium government can pay all savings the population made...

Today it looks a bit better though, BEL-20 going up for 5% (around noon 12h)

Its not just the USA that has to suffer

Edited September 30, 2008 by zorro3999

[Tenorikuma]

If my bank goes broke, so will I and then I wont be able to buy much Lego anymore (probably would be forced to sell some )

This however is an unlikely event, and even when it goes broke we have received government assurance they will garanty our bank saldo's. But if other banks (like Dexia, who is also in big trouble) goes broke at the same time, there is no way in hell the Belgium government can pay all savings the population made...

I have to ask, why do you keep your money in a bank that's bankrupt? Surely there are other banks around.

[Lt. Col. Thok]

Indeed, the American Economic Crisis is a model for the rest o the world; in a few years, Canadians and other people will be feeling the economic crunch. One way that people decided to weather it is by jetisoning their credit cards , which is a wise idea. By the look of it, TLG is still going strong, and most likely will survive the recession. However, its customers who carry their money in banks tied up through mortgage scandals are pretty screwed.

[Captain Green Hair]

Only noticable thing here is that y stock has dropped dramatically...

Next the houseprices will drop, wich will result in people staying in their houses not being able to sell wich will result in a raise of the rent on the morges.

Things are bad, and will get a little worse here.

My personal situation isn't affected yet, only thing possible is that my house has dropped in value....but i wasn't planning on moving yet and my rent is fixed untill late 2010.

I do hope the US comes up with a decent plan to fix the situation, this may result in tax payers paying a little extra, but if they don't, man...i don't wanna think about the outcome of that... (yeah start paying the Dutch tax rate )

My lego budget has dropped, but that is because i bought a motorcycle.

So half budget on!!

[Zorro]

I have to ask, why do you keep your money in a bank that's bankrupt? Surely there are other banks around.

Not one thats not nearly broke as well ...and Fortis is now a government owned bank.

Fortis and Dexia went nearly broke in 3 days !!! 4 days ago nthey said they had enough money to stand by, yesterday they went down anothe 20%; Today they are going up a lot! Just like ALL Belgian bancs!

IFwe all get our money out now, we WILL go ALL broke, that a financial rule...(yes im a good person thinking about other people like that )

I trust in my government...and I dont believe i will lose my money(not that its that much of a fortune, im only 25years old, no inheritances yet). I also still have a small flat in Brussels I could sell in case of emergency.

YEEZ, did I really say I trust the government??

Edited September 30, 2008 by zorro3999

[Captain Green Hair]

Not one thats not nearly broke as well ...and Fortis is now a government owned bank.

Fortis and Dexia went nearly broke in 3 days !!! 4 days ago nthey said they had enough money to stand by, yesterday they went down anothe 20%; Today they are going up a lot! Just like ALL Belgian bancs!

I trust in my government...

YEEZ, did I really say that??

Do you even have a gouvernment at the moment?

[Zorro]

Do you even have a gouvernment at the moment?

Are you referring to the Flemish, the Brussels, the Wallons, or the Federal Government? Or do you mean the Dutch community governemet? Or the French comm. gov.? The German comm. government?

Please be more specific!

Yeah...I know...its to cry about...

Maybe we Flemish people should just join the Netherlands

(no political view involved)

[Captain Green Hair]

Are you referring to the Flemish, the Brussels, the Wallons, or the Federal Government? Or do you mean the Dutch community governemet? Or the French comm. gov.? The German comm. government?

Please be more specific!

Yeah...I know...its to cry about...

Maybe we Flemish people should just join the Netherlands

(no political view involved)

No, no, no, i love Belgium as it is, you do not want to join us, trust me

[Bob]

My mom was a stockbroker. She told me all the time that like a cycle, we will come back. If we hit full on depression it might take longer, but we will still come back. I doubt it will be as bad as 1929 and the Great Depression, (only because there was a drought and food shortage). In America and all over the world, it wont matter whos elected President, Prime Minister, and the other places of power.

Just because one leader in that time period helped (FDR), and I say helped alittle. In about a two years (If the stock markets don't all crash) we will be back to the normal cycle, and maybe even a boom.

Although, this is me getting into economics, which I know very little about.

We need a big war. Wheres a crazy dictator when you need one?

[snefroe]

1) for a veeeery long while we had an extremely low inflation of less than 2%. borrowing money was veeeeery cheap, as a consequence, many people decided to buy a house or property, even though they could not really afford one. Banks didn't mind because they were signing deals on a daily basis, and they never bothered about the high risks they were taking. Then inflation and unemployement rates went up, so loanes where not only getting more expensive, many people lost their job. people could deal with their loanes anymore. banks lost loooooooots of money ... this is what caused the problem in the US.

Many other banks in the world are shareholders and investors in the US banks, so as a result, they lost quite a lot of money too.

We, Europeans, are lucky though... European governments and all European banks automatically back up each other in case of major financial trouble... For instance, right now the largest Benelux bank, Fortis, has a major financial problem because they just bought another bank for too much money. three governments are now buying a part of the bank for about 12 billion euro, only to sell it later again when the value of the bank's shares is ok again... there's no risk, nor has there ever been, for anyone's savings. Besides, it's the US own fault. If you don't regulate your financial sector and believe in an extreme way of capitalism, like the Americans seem to do, then this is part of the game. The fact that the Capitol did not accept the last plan to deal with the problem only shows that US politicians are... and i'm being polite here ... morons who should be jailed...

2) the reason why so many people feel there's a crisis is because A: everybody, including the media, says it's a crisis (if you repeat something long enough, people will start to believe it's true); B: prices have gone up because demand is high. not just for luxurious products, but for basic things, like practically any type of common food, wood... we're just being confronted here with what so many people have been saying for decades: this space ship called earth does not have enough provisions on board for 8 billion people, not if they all consume as much as we, people of the west, do...

3) yep, houses are getting really expensive too and salaries are not going up in the same way, so you can buy less with what you make and we want more and more. So suddenly, we feel there's a crisis going on. there isn't... last week we heard here in belgium that the number of travels to sunny countries far far away has gone up with 40% People have never ever spent so much on travels, cars, restaurants as in 2008... Besides, in terms of unemployement, it's never been as low as today...

[Captain Green Hair]

1) for a veeeery long while we had an extremely low inflation of less than 2%. borrowing money was veeeeery cheap, as a consequence, many people decided to buy a house or property, even though they could not really afford one. Banks didn't mind because they were signing deals on a daily basis, and they never bothered about the high risks they were taking. Then inflation and unemployement rates went up, so loanes where not only getting more expensive, many people lost their job. people could deal with their loanes anymore. banks lost loooooooots of money ... this is what caused the problem in the US.

Many other banks in the world are shareholders and investors in the US banks, so as a result, they lost quite a lot of money too.

We, Europeans, are lucky though... European governments and all European banks automatically back up each other in case of major financial trouble... For instance, right now the largest Benelux bank, Fortis, has a major financial problem because they just bought another bank for too much money. three governments are now buying a part of the bank for about 12 billion euro, only to sell it later again when the value of the bank's shares is ok again... there's no risk, nor has there ever been, for anyone's savings. Besides, it's the US own fault. If you don't regulate your financial sector and believe in an extreme way of capitalism, like the Americans seem to do, then this is part of the game. The fact that the Capitol did not accept the last plan to deal with the problem only shows that US politicians are... and i'm being polite here ... morons who should be jailed...

Unfortunatly similar loan and morgue constructions have been used here too, but we are lucky unemployement is low...

Only now the rules are being strictened...just in time? The near future will tell us that...

2) the reason why so many people feel there's a crisis is because A: everybody, including the media, says it's a crisis (if you repeat something long enough, people will start to believe it's true); B: prices have gone up because demand is high. not just for luxurious products, but for basic things, like practically any type of common food, wood... we're just being confronted here with what so many people have been saying for decades: this space ship called earth does not have enough provisions on board for 8 billion people, not if they all consume as much as we, people of the west, do...

China is actually starting to use more then the entire western world, they need to innovate on more efficient use of energy, or we will have an even bigger problem...

3) yep, houses are getting really expensive too and salaries are not going up in the same way, so you can buy less with what you make and we want more and more. So suddenly, we feel there's a crisis going on. there isn't... last week we heard here in belgium that the number of travels to sunny countries far far away has gone up with 40% People have never ever spent so much on travels, cars, restaurants as in 2008... Besides, in terms of unemployement, it's never been as low as today...

Are these figures for the whole year, or just the first half?

Because if it is the first half, i'm curious how the second half will go...

[Zorro]

I dont think people will travell less YET with this kind of "crisette", but if it gets any harder, we might notice a drop in travel-bookings.

Pfff...after hearing the news 5 minutes ago, it seems the financial market in belgium is clearing up a bit...

So I still will have money to buy lego...

TLC is sturdy as it was. It will never go bancrupt with fans like us around. if they make losses all they have to do is to raise the prices a little, most of us will keep buying their sets anyway...

[Eilif]

My LEGO buying is down.

My situation: I recently bought a house in Chicago. I got a good deal. Not counting my downpayment, I had an additional chunk in equity in the house when I moved in. I wasn't buying as an "investment", so even though the value of the home has probably dropped down to it's purchase price, I'm not in a bad place.

Not having that equity, means that we couldn't secure a home-equity line of credit when my wife recently returned to school, so we live off my salary and her meager school loans. We're good a cutting costs, an don't carry any other debt so thankfully we're not hurting or really struggling. I knew that my LEGO buying would fall off some when my wife returned to school, but now my LEGO buying is way down, and I am concentrating more on trading for LEGO than buying LEGO.

[KimT]

3) yep, houses are getting really expensive too and salaries are not going up in the same way, so you can buy less with what you make and we want more and more. So suddenly, we feel there's a crisis going on. there isn't... last week we heard here in belgium that the number of travels to sunny countries far far away has gone up with 40% People have never ever spent so much on travels, cars, restaurants as in 2008... Besides, in terms of unemployement, it's never been as low as today...

Yup. Low unemployment, loads of people living over their standard.

Spend your money wisely, don't buy food, buy LEGO

[Zorro]

Yup. Low unemployment, loads of people living over their standard.

Spend your money wisely, don't buy food, buy LEGO

Listen to santa Claus people, he knows whats he's talking about!

Lego is the wisest investment you can have, look at the Pirate and Star Wars sets !

Some sets double their value in 2 years time !

And those rates are almost guaranteed.

Who needs "food", "water" or "housing" anyway... There will always be rodents/roadkill, rain and bridges

[SlyOwl]

It just makes BLing from America more expensive - but I was lucky to pay for an order just hours before the pound dropped sharply

Unfortunatly similar loan and morgue constructions have been used here too, but we are lucky unemployement is low...

Only now the rules are being strictened...just in time? The near future will tell us that...

:laugh: They're dropping like flies

I think you mean mortgage

[JINZONINGEN73]

The world's run by certain corrupt banking families who have been doing "this" from back in Napoleon's time. Some slightly further.

All these economic, environmental and so-called "terrorist" acts are, I believe, fully orchestrated.

(Hey, there's some nice money to be had when you're funding both sides of a war!)

These terrible events in recent human history seem to be premeditated well in advance.

The interesting thing is, even with all the evil and corruption, Lego is still going to be on the shelves no matter what. Despite competitors, Lego is just too much of a staple child's toy to sink into oblivion. Should a couple nukes go off in a few places here and there, you can bet that there'll still be sets released that year, even if they are on par in complexity with those offered in 90's McDonalds Happy meals. (lol)

But they'll be there.

I am whole-heartedly hoping that our drains in our personal budgets in the darkness to come is due to us at the very worst buying food... and not more ammo to hold off our neighbors (both foreign AND domestic) at bay from taking that food.