Did I miss something this week? What is happening with SSR resales??

[Chuck S]

Try this http://wdtc.disneyinternational.com/

It still wouldn't let me price it. But let's look at a near equivalent using US prices.

Studio at OKW, check in Aug 9, depart Aug 23. With DDP and 10 day MWY hopper & water $5366.46 + tax. 5366.46*58% = $3112.55 + tax or $3517.18. for 2 adults.

Same studio on points: 207 points

Dues: 4.73 pp
My initial DVC purchase: $51/50 years = $1.02 or 5.75 total
5.75 * 207 = $1190.25 + 14 nights DDP (1118.60) = 2308.85
2- 10 day MYW Hopper +water $674+tax or 717.81

2308.85
+717.81
3026.66

DVC is still $490.52 cheaper after the discount.

 

[Chuck S]

Chuck, do you know how DVC determines which DVC resort(s) they'll turn villas over to CRO from to offset member trades ? ie, if I as an OKW owner trade out is DVC turning over to CRO a villa from OKW ?

TIA

I don't think anyone but DVC knows that answer. Probably something to do with the lunar cycles, planetary alignments, and sun spots.

 

[JimMIA]

Yes, just today, 1100 GM dealerships closing, additional 65,000 people will be unemployed....

Yes -- that's the prelude I was referring to. If you do the math, they actually plan to close about 2,600 dealerships total. And that's the tidy part.

Neither GM nor Chrysler is viable long-term unless a bankruptcy court abrogates their labor contracts and resolves the bankruptcy according to established law. Even if their products were as good as their competitors (which they are not), American car companies can't compete with labor costs which are 50-60% higher than their competitors. I think GM and Chrysler are both headed for liquidation.

(As are a lot of banks. How do you take away the rights of secured creditors in the auto industry and then expect those same investors to put money into toxic assets in the banking industry? Doesn't make any sense.)

Chrysler has been through Ch 11 with a bailout before, and they've been through foreign ownership before. Neither brainstorm worked. I understand the politics of the situation, but no firm owned 55% by the employees' retirement plan is going to be attractive to investors and the failure of their products is pretty well-established. GM may be a little better off, but not much.

But those firms - the banks and auto companies - are not where the real impact will come. The real impact is with their suppliers of everything from raw materials to toilet paper, and the local businesses who depend on the failed firms' employees as customers. The ripple effect, which economists call the "multiplier effect" is much worse than the underlying event like a bank of car company failure.

As much as we rely on (or hope for) the government to fix the economy, it really can't. The economy is simply too big for the government to really "fix." The economy will fix itself -- on its terms, timetable, and in accordance with economic reality, not political agendas. But it is going to be ugly.

If I were buying DVC, I'd sure wait a year or two. I wouldn't be surprised to see "new" DVC prices in the 80's and resales in the 40's a year or so from now.

 

[5forDiz]

I don't think anyone but DVC knows that answer. Probably something to do with the lunar cycles, planetary alignments, and sun spots.

So it would seem !!!

It does have me wondering if OKW & SSR are DVC's ' go to ' (for lack of a better way to put it) when turning over to CRO - - just doesn't seem like it could mainly be because that many OKW & SSR owners are consistently trading out.

 

[lapeter]

You have hit the nail on the head. Too many people think the worst is behind us and it ain't so.

Yes -- that's the prelude I was referring to. If you do the math, they actually plan to close about 2,600 dealerships total. And that's the tidy part.

Neither GM nor Chrysler is viable long-term unless a bankruptcy court abrogates their labor contracts and resolves the bankruptcy according to established law. Even if their products were as good as their competitors (which they are not), American car companies can't compete with labor costs which are 50-60% higher than their competitors. I think GM and Chrysler are both headed for liquidation.

(As are a lot of banks. How do you take away the rights of secured creditors in the auto industry and then expect those same investors to put money into toxic assets in the banking industry? Doesn't make any sense.)

Chrysler has been through Ch 11 with a bailout before, and they've been through foreign ownership before. Neither brainstorm worked. I understand the politics of the situation, but no firm owned 55% by the employees' retirement plan is going to be attractive to investors and the failure of their products is pretty well-established. GM may be a little better off, but not much.

But those firms - the banks and auto companies - are not where the real impact will come. The real impact is with their suppliers of everything from raw materials to toilet paper, and the local businesses who depend on the failed firms' employees as customers. The ripple effect, which economists call the "multiplier effect" is much worse than the underlying event like a bank of car company failure.

As much as we rely on (or hope for) the government to fix the economy, it really can't. The economy is simply too big for the government to really "fix." The economy will fix itself -- on its terms, timetable, and in accordance with economic reality, not political agendas. But it is going to be ugly.

If I were buying DVC, I'd sure wait a year or two. I wouldn't be surprised to see "new" DVC prices in the 80's and resales in the 40's a year or so from now.

 

[gkrykewy]

Yes -- that's the prelude I was referring to. If you do the math, they actually plan to close about 2,600 dealerships total. And that's the tidy part.

Neither GM nor Chrysler is viable long-term unless a bankruptcy court abrogates their labor contracts and resolves the bankruptcy according to established law. Even if their products were as good as their competitors (which they are not), American car companies can't compete with labor costs which are 50-60% higher than their competitors. I think GM and Chrysler are both headed for liquidation.

(As are a lot of banks. How do you take away the rights of secured creditors in the auto industry and then expect those same investors to put money into toxic assets in the banking industry? Doesn't make any sense.)

Chrysler has been through Ch 11 with a bailout before, and they've been through foreign ownership before. Neither brainstorm worked. I understand the politics of the situation, but no firm owned 55% by the employees' retirement plan is going to be attractive to investors and the failure of their products is pretty well-established. GM may be a little better off, but not much.

But those firms - the banks and auto companies - are not where the real impact will come. The real impact is with their suppliers of everything from raw materials to toilet paper, and the local businesses who depend on the failed firms' employees as customers. The ripple effect, which economists call the "multiplier effect" is much worse than the underlying event like a bank of car company failure.

As much as we rely on (or hope for) the government to fix the economy, it really can't. The economy is simply too big for the government to really "fix." The economy will fix itself -- on its terms, timetable, and in accordance with economic reality, not political agendas. But it is going to be ugly.

If I were buying DVC, I'd sure wait a year or two. I wouldn't be surprised to see "new" DVC prices in the 80's and resales in the 40's a year or so from now.

I think your general point is well-taken (although you're a little "all over the place" - why are you linking auto creditors with toxic asset investors?), but the multiplier effect from the auto bankruptcies is well understood and already priced in by the markets. This is not rocket science. All of the auto company employees are not going to lose their jobs, and consequently, the impact on ancillary firms - while significant - will not be as devastating as you project (in my view).

But this is all way off topic.

 

[BWV Dreamin]

It still wouldn't let me price it. But let's look at a near equivalent using US prices.

Studio at OKW, check in Aug 9, depart Aug 23. With DDP and 10 day MWY hopper & water $5366.46 + tax. 5366.46*58% = $3112.55 + tax or $3517.18. for 2 adults.

Same studio on points: 207 points

Dues: 4.73 pp
My initial DVC purchase: $51/50 years = $1.02 or 5.75 total
5.75 * 207 = $1190.25 + 14 nights DDP (1118.60) = 2308.85
2- 10 day MYW Hopper +water $674+tax or 717.81

2308.85
+717.81
3026.66

DVC is still $490.52 cheaper after the discount.

Do this math using today's direct sales prices for AKV and BLT....not such a good deal.

 

[Chuck S]

Do this math using today's direct sales prices for AKV and BLT....not such a good deal.

But it is still cheaper than the special.

 

[culli]

Do this math using today's direct sales prices for AKV and BLT....not such a good deal.

Maybe not but how long do you think the deals are going to occur? I have not done all the math but this is for a studio. I would think it would get better if you look at 1 and 2 br villas. Also for the most part the DVC price is not going to increase much but when Disney stops doing these deals that price will change dramatically.

I tried to see what the price would be for our 2br stay coming up at in Oct at BLT and the free dining is not available. However we could do it at SSR for $7400 it is costing us 414 pts to stay at BLT, SSR would be 339pts. We have APs and actually the dinning plan is nice but for us is a pain the butt would prefer to eat in the room.

So the way I look at it is the room at $10pt (current rental price I'm sure my price of owning is cheaper) would be $3390, APs are paid for so not sure how to figure that cost in and there is no way we are spending $4k on food and APs. I'm sure there is holes in my math but?????

BTW - on the UK site it priced out to be about $4600 us, now that would make me think....again how long will the deals be there?

 

[BWV Dreamin]

Maybe not but how long do you think the deals are going to occur? I have not done all the math but this is for a studio. I would think it would get better if you look at 1 and 2 br villas. Also for the most part the DVC price is not going to increase much but when Disney stops doing these deals that price will change dramatically.

I tried to see what the price would be for our 2br stay coming up at in Oct at BLT and the free dining is not available. However we could do it at SSR for $7400 it is costing us 414 pts to stay at BLT, SSR would be 339pts. We have APs and actually the dinning plan is nice but for us is a pain the butt would prefer to eat in the room.

So the way I look at it is the room at $10pt (current rental price I'm sure my price of owning is cheaper) would be $3390, APs are paid for so not sure how to figure that cost in and there is no way we are spending $4k on food and APs. I'm sure there is holes in my math but?????

BTW - on the UK site it priced out to be about $4600 us, now that would make me think....again how long will the deals be there?

For a true comparison, one must compare apples to apples. Not DVC prices 15 yrs. ago, no using AP's, etc. Maybe a math guru (or accountant) can work the numbers up using todays prices for meals, rooms, tickets, etc. vs. the promo's. (That would include the cost to own DVC including the MF's). I think we will be surprised at the cost savings the promo's are providing.

 

[momx2]

Yes -- that's the prelude I was referring to. If you do the math, they actually plan to close about 2,600 dealerships total. And that's the tidy part.

Neither GM nor Chrysler is viable long-term unless a bankruptcy court abrogates their labor contracts and resolves the bankruptcy according to established law. Even if their products were as good as their competitors (which they are not), American car companies can't compete with labor costs which are 50-60% higher than their competitors. I think GM and Chrysler are both headed for liquidation.

(As are a lot of banks. How do you take away the rights of secured creditors in the auto industry and then expect those same investors to put money into toxic assets in the banking industry? Doesn't make any sense.)

Chrysler has been through Ch 11 with a bailout before, and they've been through foreign ownership before. Neither brainstorm worked. I understand the politics of the situation, but no firm owned 55% by the employees' retirement plan is going to be attractive to investors and the failure of their products is pretty well-established. GM may be a little better off, but not much.

But those firms - the banks and auto companies - are not where the real impact will come. The real impact is with their suppliers of everything from raw materials to toilet paper, and the local businesses who depend on the failed firms' employees as customers. The ripple effect, which economists call the "multiplier effect" is much worse than the underlying event like a bank of car company failure.

As much as we rely on (or hope for) the government to fix the economy, it really can't. The economy is simply too big for the government to really "fix." The economy will fix itself -- on its terms, timetable, and in accordance with economic reality, not political agendas. But it is going to be ugly.

If I were buying DVC, I'd sure wait a year or two. I wouldn't be surprised to see "new" DVC prices in the 80's and resales in the 40's a year or so from now.

Unfortunately, I think you are right. I think the economy is only going to get worse in the forseeable future. I hope in a few years it will turn around, but right now I don't see it. I was just on the budget boards and about 3-4 new people had lost their jobs.

 

[JimMIA]

I think your general point is well-taken (although you're a little "all over the place" - why are you linking auto creditors with toxic asset investors?)

Because they are linked, from an investor's point of view. Investments are made based on the ground rules everyone plays by, but the government is changing the ground rules for the very people they need to pull the country out of a recession. You can't punish investors for doing what you wanted them to do in one case and expect them to follow your lead in another case.

You can't shaft investors out of their legal rights in the auto industry by calling them greedy and expect them to turn around and help the government bail out the banks by investing in toxic assets to re-infuse the credit system with money to lend. It's the old, "Fool me once, shame on you. Fool me twice, shame on me." concept.

Why would any group of investors trust the government after the way they've been treated in the auto industry? If the investors take huge risks and make some huge returns for the risk they took, the government will be passing "windfall profits" taxes. There are much better investment opportunities for those investors elsewhere.

The bank/credit industry problem is the one which most affects DVC. DVC was financing 75% of their new sales, but now they are unable to sell those mortgages because there is no money to lend. That's led to the very high interest rates on DVC mortgages, which makes "new" DVC more difficult to sell to 75% of their customers.

At the same time, DVC is being forced to make hundreds of ROFR decisions and has obviously decided they have to let resale prices fall. That, in turn, will put pressure on "new" prices because a prospective buyer would be nuts to pay 30-40% more to purchase direct from DVC.

The economy is all linked together. As the old saying goes, "Everything is connected to everything else, and there's no such thing as a free lunch."

 

[Mickey'sApprentice]

Actually, with the large infusions of cash into the economy, we will likely see high inflation.

Instead of values going into the 40s, they will stay close to the same price, but will only be worth the equivalent of the 40s today.

 

[gkrykewy]

Because they are linked, from an investor's point of view. Investments are made based on the ground rules everyone plays by, but the government is changing the ground rules for the very people they need to pull the country out of a recession. You can't punish investors for doing what you wanted them to do in one case and expect them to follow your lead in another case.

You can't shaft investors out of their legal rights in the auto industry by calling them greedy and expect them to turn around and help the government bail out the banks by investing in toxic assets to re-infuse the credit system with money to lend. It's the old, "Fool me once, shame on you. Fool me twice, shame on me." concept.

Again, I really don't see where you're coming from on this. There is no single universal pool of "investors" making the same decisions regarding investments. I am an "investor," and you have me scratching my head. In all honesty, your posts here are the first mentions I've seen on the entire internet that regards Chrysler/GM creditors as having been unreasonably wronged somehow. Further, the "toxic asset" investment programs have been received quite favorably by "investor" talking heads (CNBC et al). I really think you're barking up the wrong tree on this particular point.

Why would any group of investors trust the government after the way they've been treated in the auto industry? If the investors take huge risks and make some huge returns for the risk they took, the government will be passing "windfall profits" taxes. There are much better investment opportunities for those investors elsewhere.

Really? Huge risks? I think investors in the toxic asset garbage will have losses capped at something like 15%, no? Against unlimited profit potential? They're going to be doing okay. Your bit about the windfall tax is a strawman.

The bank/credit industry problem is the one which most affects DVC. DVC was financing 75% of their new sales, but now they are unable to sell those mortgages because there is no money to lend. That's led to the very high interest rates on DVC mortgages, which makes "new" DVC more difficult to sell to 75% of their customers.

The numbers really don't bear this out. I believe the current retail DVC financing rate is 10.9%, which is precisely what it was when we bought (but did not finance) in 2007, when securitization was still running at full steam. And they are not unable to securitize ("sell those mortgages") because there is no money to lend, but rather because practically no one is interested in buying real-estate backed securities anymore -- residential, commercial, DVC, or otherwise.

Where there IS an impact is in the inability of some purchasers to extract equity from their homes to finance DVC buy-ins at attractive rates.

 

[BWV Dreamin]

I believe the current retail DVC financing rate is 10.9%, which is precisely what it was when we bought (but did not finance) in 2007, when securitization was still running at full steam. Where there IS an impact is in the inability of some purchasers to extract equity from their homes to finance DVC buy-ins at attractive rates.

I would expect this to go up in the near future. Disney can't sell these loans like before, so holding them in house will force them to increase this interest rate. I think DVC forclosures also will have an impact on DIS bottom line.

 

[gkrykewy]

I would expect this to go up in the near future. Disney can't sell these loans like before, so holding them in house will force them to increase this interest rate. I think DVC forclosures also will have an impact on DIS bottom line.

On your first point - conceivable, but it's been 6 months, and the rate hasn't moved. Difficult to discuss hypotheticals moving forward.

I personally think it's likely that it doesn't budge, and Disney just absorbs the risk for awhile. It's a high rate, and so highly profitable when people are paying up. I haven't seen any indications that foreclosures are high enough to make this very risky.

 

[BWV Dreamin]

On your first point - conceivable, but it's been 6 months, and the rate hasn't moved. Difficult to discuss hypotheticals moving forward.

I personally think it's likely that it doesn't budge, and Disney just absorbs the risk for awhile. It's a high rate, and so highly profitable when people are paying up. I haven't seen any indications that foreclosures are high enough to make this very risky.

It was already reported a couple of months ago that Disney would suffer a loss due to the lack of securitizing these loans. It was factored into their loss, I think it was their first quarterly earnings report.

 

[Chuck S]

It was already reported a couple of months ago that Disney would suffer a loss due to the lack of securitizing these loans. It was factored into their loss, I think it was their first quarterly earnings report.

Yes, but it is a loss of immediate profit, not because the people aren't paying, but because Disney now has to have the accounting personnel to maintain those loans and keep the postings up to date, and the fact that they aren't basically selling off the loans to another company for a lump sum. Now they have to wait to clear it from their books until the end of the term of the loan. In the long run, with the interest, they'll make more money as long as the loans are paid according to the agreement. In the short term, they've lost a quick, but less profitable way, to turn over their $$ for more immediate operating capital.

 

[BWV Dreamin]

Yes, but it is a loss of immediate profit, not because the people aren't paying, but because Disney now has to have the accounting personnel to maintain those loans and keep the postings up to date, and the fact that they aren't basically selling off the loans to another company for a lump sum. Now they have to wait to clear it from their books until the end of the term of the loan. In the long run, with the interest, they'll make more money as long as the loans are paid according to the agreement. In the short term, they've lost a quick, but less profitable way, to turn over their $$ for more immediate operating capital.

Well, I fail to see how they will make more money in the long run unless they increase revenue to offset the newly acquired expenses...hence, raising interest rates.

 

[Chuck S]

Well, I fail to see how they will make more money in the long run unless they increase revenue to offset the newly acquired expenses...hence, raising interest rates.

If Disney packaged and sold a $10,000/10 year loan for, say $8,000 to take the immediate profit and write it off their books, and they now have to hold that loan for the 10 years, if the person doesn't default, Disney will garner $16,462.15, including the principal. Or $10,462.15 in additional gross profit, but they will have to wait 10 years to see it.