[AKSA]

Folks,

The fiscal fun the world is passing through at present will have far reaching repercussions.  As in all these things, it's about confidence.   

It appears the Banks are now reluctant to lend to each other, and very cagey about lending to retail customers.  Over the last twelve months, mortgage defaults in the US have sharply increased, and now they are beginning to increase around the developed world.  As well as the famous Bear Stearn and Lehmann Brothers failures, there have been more bank collapses in Britain, Belgium, and Iceland - and doubtless more to come across Europe.  Yesterday GM shares dropped 30% in the US.  Soon other countries will show high mortgage defaults too, with commensurate effect on real estate values, and in the years to come all taxpayers will foot the bill for the bank buyouts which are becoming commonplace.   

This is arguably the biggest recession/depression any of us have seen in our lifetimes.  But there is cause for optimism.  Life goes on, after all.   

While people are running scared, postponing their lives, taking no holidays and avoiding any expense, pent up demand slowly mounts.  Eventually, people always buy things.  This is a crisis of confidence as much as anything else, and its worth remembering there are only a few people around whose material wealth has actually dropped substantially.  I've gone down a few thousand here and there on my home investment, and some shares, but life goes on pretty much unchanged and the sun still rises every day.  The Gen Y folk who have overstretched their credit cards might have a few issues, particularly if they lose their jobs, but unemployment is much as it was six months ago.  It may change, that is true, but there are still plenty of folk around with money and this recession will not last more than a year or so.  This has all happened before in some form or other, and people will still eat, make love, build amplifiers, and listen to music, possibly in that order....... aa

What I find unexplainable is the drop in the Australian dollar.  In the last six months it's dropped from 97c to 68c US.  Yet we are more insulated than most economies with our huge resources boom, and our government surplusses for the last four years are the stuff of legend.  But there's an opportunity for AKSAphiles here.....

Since my products are all denominated in AUD, now is the time to buy - a project for the Northern Hemisphere winter, just coming on!!

Cheers,

Hugh

[zybar]

68 cents on the dollar...very tempting.

That means your excellent Soraya amp is now only $3500 + shipping!!  Wow, that is a lot of amp for the money.   

Hugh, will any of your gear be used at RMAF?

I know I was very impressed with your amp in David Ellis' room last year.

George

[AKSA]

George,

There will be none of my gear at RMAF, sadly.  I decided three months ago not to attend;  I did work a deal with Wayne at RMAF last year, and that was a terrific boost, but sold nothing to any attendees, and felt that in view of the horrific distances, high cost of accommodation and gathering thunder clouds on the horizon that it probably was not worth the trip this year.  I disappointed Wayne by pulling out as I did;  but he is going in with Tweak Geek this year, and Bill Richardson, as I understand, so no damage done.  However, from an entirely unpredictable corner, the exchange rate has come to Aspen's rescue!!

The amp you heard was Soraya I.  It's a wonderful amp, George, but now I have an amp, Soraya II, which is even better.  I experienced an epiphany of design shortly after returning from Denver last year, and created the best voltage amplifier I have ever seen/heard using solid state.  This new amp has greater clarity, longer decay, better layering of complex music, and much quieter presentation than the original, and is the same price, $AUD5300.  The one hitch is a fair thump at switch on, but it's not damaging for the speakers.  I've been road testing this amp for a year, to be sure it's utterly reliable, and it has proved so.  I'm working on the copy right now......

Because I much prefer to build power amps, and because the Swift is so labor intensive, I have decided to discontinue the preamp.  It's a beautiful, beguiling preamp, no question, but it's very difficult to build.

Cheers,

Hugh

[Kevin Haskins]

George,

There will be none of my gear at RMAF, sadly.  I decided three months ago not to attend;  I did work a deal with Wayne at RMAF last year, and that was a terrific boost, but sold nothing to any attendees, and felt that in view of the horrific distances, high cost of accommodation and gathering thunder clouds on the horizon that it probably was not worth the trip this year.  I disappointed Wayne by pulling out as I did;  but he is going in with Tweak Geek this year, and Bill Richardson, as I understand, so no damage done.  However, from an entirely unpredictable corner, the exchange rate has come to Aspen's rescue!!

The amp you heard was Soraya I.  It's a wonderful amp, George, but now I have an amp, Soraya II, which is even better.  I experienced an epiphany of design shortly after returning from Denver last year, and created the best voltage amplifier I have ever seen/heard using solid state.  This new amp has greater clarity, longer decay, better layering of complex music, and much quieter presentation than the original, and is the same price, $AUD5300.  The one hitch is a fair thump at switch on, but it's not damaging for the speakers.  I've been road testing this amp for a year, to be sure it's utterly reliable, and it has proved so.  I'm working on the copy right now......

Because I much prefer to build power amps, and because the Swift is so labor intensive, I have decided to discontinue the preamp.  It's a beautiful, beguiling preamp, no question, but it's very difficult to build.

Cheers,

Hugh

Glad to hear you have some good news Hugh!    I didn't go to RMAF and I'm a lot closer than you.    You guys in Oz should have an audio show.   I'd love to find an excuse to come spend a week in Australia. 

[Freddy57]

  Ah yes the rollercoaster stockmarket has left many here in the states a bit queasy.  I have taken to NOT watching the news too closely as it is filled with too much depression and as much political slosh as well.  The TV shows in the evening all seem to solve their problems within the hour.  How nice for them.  Unfortunately this unrealism is also unsettling.  So I have taken to just listening to my trusty old Lifeforce 100 with a small pile of cds.  Its amazing how good music will get you through some tough times.  Thanks All, VERN

[AKSA]

Ah, Kevin,

Thanks for your post - I think Denver is essentially for a look see, it's primarily marketing, not sales, and thus it's more oriented to the larger businesses which can indulge a little marketing and use the show to make business connections.  I loved it, I really did.  I met Nelson Pass, Lyn Olson, John Attwood, Wayne Waananen, John (?) Vandersteen, and quite a few others, and had a wonderful time.  But ROI was low, and I need to be careful.....

We do in fact have shows in Oz, both in Melbourne and Sydney, but they are dominated by overhead projectors, flat screen TVs, blue ray DVD, and subwoofers which make more noise than the car audio nats........  need I say more?

Vern,

Always a pleasure to hear from you.  I'm thrilled that you love your Lifeforce - there is indeed something about that amp which rakes you in......

Hugh

[raptor]

What I find unexplainable is the drop in the Australian dollar.  In the last six months it's dropped from 97c to 68c US.  Yet we are more insulated than most economies with our huge resources boom, and our government surplusses for the last four years are the stuff of legend. 
Cheers,

Hugh

I think it mainly relates to the expectation that our interest rates are on the way down Hugh, 1% this week and I expect another 0.5% next month. The other issue weighing heavily on the AUD is the sharp fall in commodity prices and the suspicion that the quantities exported will also be reduced.

It means my buying music from O/S has come to a grinding halt.

By the way I am still absolutely delighted with my Soraya; I must re-post in the listening impressions thread as I've got a fair number of hours on it now. I don't turn it off though, the thump at switch-on is too disturbing for me. It is, however, my only criticism of a wonderful power amp; extremely detailed and very fast on the transients. Every night I sit listening with a big grin on my face.

[whubbard]

Well Hugh,
It looks as if I bought my gear at the wrong time. However, I couldn't have been happier that I was able to get them 'working' as the warm days of summer wrapped up in the north-east. Unless there are any small Aspen products being released in the near future, I think I've got your product line covered from start to finish!

Whatever happened to the DAKSA...? 

-West

[MikeC]

Hi Hugh

I think the Aus dollar has lost value for two reasons; firstly, the general decline in resources demand with the global slowdown, and more recently, the rush of US investment banks out of foreign investments at any cost as they struggle to raise dollars to maintain liquidity. Also, investment is sentiment driven, and fear is driving people out of equities. There is no real difference with any other emerging market or resource based currencies. I imagine that the Australian stock exchange has quite large foreign exposure due to the big resource companies like BHP-Billiton. These shares are sold in Aus dollars and repatriated as US dollars, hence a demand for US dollars and a surplus of Aus dollars.

Paradoxically, the US dollar is strengthening at a time when their economy is the weakest, due to the buying up of offshore dollars.

That's my simplified economic theory anyway 

As you said, life goes on. Just got home, watched some TV with my kids, listened to some music (Paul Simon - Graceland on LP), and now it's bedtime, at least for them. Weekend tomorrow, and hopefully an early morning ride if the weather is good.

Mike

[Frihed91]

Ah, Kevin,

Thanks for your post - I think Denver is essentially for a look see, it's primarily marketing, not sales, and thus it's more oriented to the larger businesses which can indulge a little marketing and use the show to make business connections.

RMAF is full of tire kickers and test drivers.  A lot of big vendors do not participate for that reason.  But it is a fun show for the public and it attracts a lot of vendors with top notch equipment.  In the last 2 years, I bought a set of speakers, 2 sets of mono block amps (tube and SS), a tube preamp and two nice headphone amps (tube and SS), plus  a bunch of cables.  I saw another tube preamp there last year and just decided to buy it, too, a deHaviiland UV2.  But I am not attending this year. 

Australia is long way away.  I hope your stuff is professionally packaged.  I see more and more small mfrs using professionally made form-fitting foam inserts and my stuff gets to DK from North America without a scratch.

I like your attitude, by the way.  I'll try to take your advice.

[miklorsmith]

Do you make a 12v power supply?

[AKSA]

MSmith,

Thanks for the post, no 12V supply, only 5V and 9V supplies for the SBIII and the Duet.  But I could accommodate it if you wish.  What would you like it for?  Do you know the current draw?

Thanks Neil and Mike for the comments about the market;  much appreciated.

Fridhed,

I think you are right, but that's not to detract from RMAF.  I loved my time there last year;  and I loved the Denver area, sensational part of the world.

I package my gear carefully in bubble pack with lots of polystyrene blocks.  Can't be too careful!

West,

Yes, I'm very sorry, you did, it appears, buy at the wrong moment.  It's hard to get these things right, almost no one does.  But I'm delighted you are happy with the sound, and that you have it all up and running.  As I've remarked, your active system with Orions is a huge achievement, even for a professional in the area, and at your age and experience it all makes you something special.

Cheers,

Hugh

[Geoff-AU]

As in all these things, it's about confidence.   

Yep, and all kicked off because of dodgy tactics employed by mortgage vendors in the US.  And how fitting that two major financial institutions over there have collapsed.  Over here though, the banks are all crying "woe is me" while continuing to charge substantial fees and will no doubt still post healthy profits despite the turmoil.

It officially gets a "bah humbug" from me

[AKSA]

Geoff,

On the matter of fees from Oz banks, I have to add my 2c.

Let me broadcast what they do for business accounts in this country to our fellow AKSAphiles worldwide..... (I do not like the Banks here!).

1.  No interest paid on business accounts.
2.  $7.50 account fee each month.
3.  2.5% merchant fee for CC transactions.
4.  $33 monthly fee for EFTPOS machine.
5.  $20 fee for international money transfers, flat.
6.  You pay a $35 dishonor fee if someone gives YOU a check which bounces.
7.  $2 fee each time for periodic payments.

There are four big banks here in Oz, and they enjoy a cosy relationship where their fee structures are very closely aligned.  They make profits varying from $1.5B to $4B a year;  these are very lucrative institutions.  I read some years ago that 65% of their income is generated by banking fees, most of the rest by interest on loans.

From what I saw, yes, the US lending practices became sloppy in the finish, with healthy profits generated by lending to people with little capacity to pay.  That's sure bad, and a big contributor to what is happening now.  Oz has been poorly served by its Banks, however, and the situation is compromised by our high rates of taxation.  Government has a tacit deal with the Banks here;  they need taxpayer deposit details for obvious reasons;  the tradeoff is that the Banks are, to some extent, permitted to collude over fees and charges.  But in connection with the sub-prime crisis I think it is now clear that regulation is essential, since most corporations have no scruples about how they make their money.  To them it's survival;  to us, the punters, it's profiteering.  Clearly government regulation is required to prevent these excesses.

Sorry, OT,

Hugh

[whubbard]

will no doubt still post healthy profits despite the turmoil.

...not quite so.

 The really problem lies in the fact that too many people took the 'American Dream' to a new level. They took out loans they could never afford in an inflated housing market. The governments and the banks were thinking that they were doing a great thing for the nation by handing out all this money and the banks somehow thought that most of this would be paid back, even if it wasn't even possible. Well now the banks went ahead and sold all these loans off to investors. Who in turn thought it was going to be a brilliant investment when all these loans were paid back. Well a lot of these loans didn’t quite get paid back…

The aftermath is that there is now a lot of 'lost' money. The banks have most certainly been affected by the crash in the economy. Other than Wells Fargo and a few select other, the profits will be far from good. They are really all just trying to stay alive at this point, especially the smaller, local banks that gave out a lot of these loans and held on to them as people continued to default. Thats why the FDIC now insures up to $250k for the time being so that people can feel safer about their bank. Hopefully the market will have a slight rebound soon, but I would guess is will then fall again…and then slowly rebound over the next few year, but you never really know.
-West

[pbrstreetgang]

West I must expand a bit as I feel it is important.

"The really problem lies in the fact that too many people took the 'American Dream' to a new level. They took out loans they could never afford in an inflated housing market."

True to some extent, Due to the low return on safe investments (Treasuries and MM) dating all the way back to the Greenspan era and the refusal to raise rates the Vast International monetary funds demanded more on their money and investment banks and soon everyone started providing that in new instruments. Along with other things such as govt pressure for "affordable housing" and reckless moves by Fanny and Freddie all that money from those investment banks was falling from the sky. The lenders didnt care at all because they were not going to hold any of the notes. They were going to pass them off.

Most of the people were given and approved for vast sums of money they had no business having but the greedy lenders structured it in a way that they could afford it for a while- This is predatory and wrong. The fact of the matter is over 96% of even these loans are currently being paid. The compounding effect of bundling them has caused vast exposure. Thats the least of the matter. The insurance offered (Credit Default Swaps) offered by the huge banks- Stearns, AIG Lehman Bros. imploded these giants instantly. See they bet the farm on the front end and the back end. This is many TRILLIONS more than the actual cost of the loans due to the inflated perceived value of the "financial investment" This is what instantly imploded the big boys.

"The aftermath is that there is now a lot of 'lost' money. "
True some say over half the worlds accumulated wealth.


"The banks have most certainly been affected by the crash in the economy. Other than Wells Fargo and a few select other, the profits will be far from good. "

Very true, but most deposit banks with sound practices should be fine.


"They are really all just trying to stay alive at this point, especially the smaller, local banks that gave out a lot of these loans and held on to them as people continued to default."

More correctly the players in this scheme and really were the rubber meets the road was a major issue in all this. They basically didnt care and wrote in anything to marginally cover themselves. They basically forgot basic banking, ethics, decency, and morality. They lied, forged, stretched and squeezed. They were going to stick it to the common folks that were not informed and or smart and the Investment banks to the investors on the top. A lot of the bad stuff happened here. Only when they couldn't shovel them upstairs to the banks and investors did the Oh crap light go off and they realized they just did this to themselves and ruined their bank. These are not the ones that get bailed out.

"Thats why the FDIC now insures up to $250k for the time being so that people can feel safer about their bank. "

Yes but mainly to not cause panic and bank runs for money.


I encourage anyone to read and watch these as they are nearly perfect explanations (without getting too technical)

first a transcript from major policy makers, economists and officials from NPR
http://www.thisamericanlife.org/extras/radio/355_transcript.pdf

Then the excellent 60 min video about the real problem
http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

[raptor]

Hugh, I hope that you are not really letting your bank do these things to you. My comments are:

1.  No interest paid on business accounts. You should have an internet banking account to hold any excess funds. Transfer to and from your business account as required. No fees are charged on the account and currently interest rates are around 6%, calculated daily, paid monthly.


3.  2.5% merchant fee for CC transactions. If you're a member of VECCI, merchant fee on CBA is (I think) 1.5% You don't want to accept AMEX or Diners if you can avoid it; their rates are even higher.


6.  You pay a $35 dishonor fee if someone gives YOU a check which bounces. Only if you can't be bothered complaining. The regulations state that the bank is entitled to recover reasonable costs incurred in processing a dishonoured cheque. The banking ombudsman has held to date that around $10 is reasonable. If it's more than that, complain to your bank.

7.  $2 fee each time for periodic payments. Avoid setting up PP's through the bank, use your online account instead to set up monthly payments. Your transaction fee should be less than $2.

Aussie banks are highly skilled at fee extraction, it makes a significant contribution to their profits. Only by organising your finances carefully can you keep their gouging to a minimum.

[AKSA]

Thanks Neil!!

Yes, they are doing this to me, difficult situation.

I have moved some things to St Georges, they appear better.

Hugh

[raptor]

I have moved some things to St Georges, they appear better.

Hugh

Only temporarily I'm afraid. When Westpac takes them over I expect service levels will deteriorate and fees will climb. They have to get their synergistic savings from somewhere and the analysts are predicting that it will be earnings per share positive from year 1.

With the costs involved in integrating their systems I think that staffing levels will be significantly reduced.

[andrewbee]

The "meltdown" is the fault of greed on the part of financial institutions.
 In a nutshell, In the USA, lenders put money in the hands of those who could not afford it on the pretext of never ending real estate appreciation where the mortgagee would have the requisite equity in a few years with said appreciation.

These mortgages were wrapped in pretty paper and sold and traded eventually becoming the basis for several funds which were traded internationally.

The MAIN reason for the US Govt stepping in is there are lots of countries with money invested in the USA e.g China had 380 billion in Freddie / Fannie alone. You don't want to upset international relations anymore than you really have to.

The reason for the fall? It boils down to jobs. You cannot send jobs overseas because its is cheaper to produce, you are giving away everything, only shareholders benefit from this sort of madness. To compound this, after you send the jobs overseas you then buy your product back!

The only way to grow is to produce goods or services, people have jobs and more importantly the money stays within your own economy.
If you don't believe me read Adam Smith.

The consumer also has part in this. We constantly want everything cheaper, we buy inferior goods from overseas to save a dollar but disregard the fact that the cheaper product comes from a country with questionable working conditions, which include health, safety and employee rights. We figure if it lasts a year it was worth it and we can buy another. Wrong. That certainly is no way to create wealth, your wealth anyway, others yes.

What will be interesting is to see the same financial institutions being saved by the US taxpayer, trading the worthless paper in a way to make a profit from it all.