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S & P DOWNGRADE WILL HURT GOLF

Money in Golf by Eric J. von Hofen
Just when things were showing signs of picking up in the golf world, the last two weeks of financial news has struck fear back into the business. The politics of Washington D.C., problems in Europe and unemployment figures here in the U.S. have cast a shadow on the world economy. The stock market has lost 10% in the last two weeks alone, and is still trending down. Things are so negative that gold, investor’s “safe haven”, hit an all-time high and then sold off from it’s high point during Thursday’s 500 point drop.

On Friday night, August 5, it was announced that the S & P rating for the United States was downgraded from AAA to AA+. What does this downgrade mean for everyone? For starters, the amount of interest the U.S. government pays on it’s debt goes up. Rates on car loans, mortgages, credit cards and student loans will be going up. This downgrade will hit the pocket books of the American people, and discretionary spending on golf will be no exception.

I was traveling last week in New York and was a guest at a few clubs in Southampton. You could feel it in the air. Everyone was talking about the problems facing the country. This morning on the range tee in Miami, a buzz of “whats going to happen next?” was heard down the tee line. If the members are taking cover, its only a matter of time that conversations about cut backs at clubs will take place.

This downgrade will give golf courses enough of an excuse to delay capital expenses and cut back on operating budgets…just what we don’t need to have happen. Many superintendents have been asked to do more and more with less every year. This next inevitable round of cuts may be the breaking point for many guys.

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Is Tiger Woods, and golfers worldwide, ready to start playing again?

This week Tiger Woods is playing in the Masters in the land down under and he is not ranked #1. What can we expect out of him? A year ago this week, in the same land down under of Australia, both his perfect world and his perfect golf game started to come undone. He said in a press conference today that he is ready to start playing again. I’ve heard that same sentiment echoed repeatedly over the last week, not just from Tiger Woods, but from members as well. They are telling me they are happy about the outcome of the elections last week, the stock market is at a two year high and they want to play more golf this year. I think the world is realizing that we are all not going to fall off a cliff and the markets are not going to zero. I can see business improving at the country club by the amount of members hanging out and enjoying themselves. We have a member/member tournament this week and the field is sold out. Tonight, South Beach hot spots such as Joe’s Stone Crab and Prime 112 have a 2 hour wait for a table, and the streets are packed with vacationers from around the world. It’s hard to believe that there is a 9.5% unemployment rate in the US. Sure doesn’t feel like it. Maybe we have turned the corner, and maybe Tiger might just surprise us with a win this week.

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