The Recession's Six Degrees Of Separation

"Financial Family Tree" Continues, Examines How Fewer Diners Trickles Down To Impact Horse Trainers

(CBS)  At the Twin Oaks Country Inn in Wilmont, Wis., fewer diners means there's little need to refill the wine shelves.

Their once-popular house wine comes from Fetzer Vineyards in California, where Winery Director Mike Haering admits falling restaurant sales have him over a barrel, reports CBS News correspondent John Blackstone.

But in Fetzer's warehouse unsold cases are already growing into a mountain.

The decline in restaurant sales has been partially offset by people buying wine to drink at home.

"We're down 6 percent of what expected to do for our plans," Haering said. "That's the equivalent of 2.5 million bottles."

Two and a half million fewer bottles sold means less of everything.

"It impacts what glass, what labels we need, how much fruit," Haering said.

So many impacts, it creates two branches in our tree.

The first branch goes to Butch Cameron's fleet of 50 trucks that move wine for Fetzer and other California wineries.

"Our revenues are down 40 percent this year," Cameron said. "For us, that is into the millions."

About $2 million less this year. He's slashed his workforce from 60 to 25.

Miguel Contreres is the only fulltime mechanic left. He'll lose $10,000 in overtime this year.

"I am still nervous because you never know what's going to happen to the economy," Contreres said.

On our other branch there's plenty of nervousness on the wine country spread where Jim Caudill and his wife, Char, live.

"We've been here 8 or 9 years raising horses," said Char Banach.

Jim Caudill is an executive laid off by Fetzer's parent company.

"Didn't expect the notice and it obviously turns your world upside down a little bit," Caudill said. "Obviously, it is not just my job that is disappearing. Half my 401(k) disappeared. My house has gone down in value."

Caudill will say only that his salary was in the six figures, an amount hard to match in this economy.

"The first conversation we had was 'do we want to fight to stay here?' and it doesn't take much to look around and say 'oh yeah, we're going to fight to stay here,'" said Caudill.

"We went - 'Eeeh!' - and put on the brakes all the way around," Banach said.

Putting on the brakes includes dropping plans to enter horse shows that can cost $2,000.

"She is material to go on to the nationals," Banach said patting a horse."But we won't be going."

They'll no longer pay trainer Patti Belanger $400 a month. She's lost so many clients she can barely cover expenses.

"I probably put in the bank about $60 a week," Belanger said.

Teaching kids about horses helps keep her afloat, but she can't spend anything on equipment.

Which takes our financial family tree to Martin Cohen. His patented stirrups retail for about $180 a pair. He expects sales to fall from $250,000 last year to $125,000.

"This year we have to pull back," Cohen said.

A 50 percent pullback, hitting the factory where the stirrups are made - far away in China.

[John_Merritt]

Heu woger wabbit:

Sorry about your speech impediment. Trickle down economics had a starting point, but it was never meant to have an end point. It was to infiltrate down through each and every symstem, and be reconstituted and probably find its way back to the origin. That is what is referred to as going full circle.

So big money was filtered down and got in the hands of Fetzer and it was supposed to benefit everyone in the food chain. However the food chain is diminished exponentially because less is originating from Fetzer and getting to the end point. Thus there is less to go around and less means fewer prosper.

I am not rich, as a matter of fact, closer to poor than I am rich. However, I had the wherewithal to see this tsunami five years ago, and liquidated and saved as much as I could. Currently, not hurting but maybe a year away from it. No job, small savings and being frugal till it hurts.

Mind you, I will never allow others to predicate my future again, because it has come down to being smart with less. That is our future. Each American.

P.S. That was only a joke about your speech. I am not mean, but I do like and encourage good posts that are thought provoking and educational for all, without enflaming people. Be well.

[oftencensord]

Lack of consumer confidence = Reduced demand = Surplus, resulting in Temporary price reductions, resulting in Reduced future production and Bankruptcies, resulting in Reduced inventory, resulting in Increased demand, resulting in High prices, adding to the inflationary firestorm coming that will diminish purchasing power further.

It is the doom and gloom spiral. We are at the reducing future production and bankruptcy phase now.

[SteelersWinAgain]

When you're in a 'luxury' business such as Wine, your business will fall when the economy is suffering. Face it. Plan for it. Its the way it is and always will be. Otherwise, offer staples and make less money in good times, but more reliable money in weak times.

[ralpherus]

roger rabbit with the gay speech impediment- you are so full of propaganda you are not even using your own thoughts....typical, pitiful.

[ralpherus]

obamanomics is geyser erupting poverty- except the government will get more powerful, then the remnants of the constitution shall be shredded....

[katiellen]

In regards to the news article 6 degreesof the Recession , It is sad that in this economy it can have such a bad effect on all those people and their jobs. I hope it all works out for all of them. The Caudills do have other income and they will do fine. As far as the horse trainer loosing her job recession can be part of the blame. If you had done your investigating before your report some her clients were lost do to her unreliable work ethic .

[engineer1503]

You got it!

Do you think that stirrup factory in China is hiring?

[wogerwabbit]

Guess what they call this principal that you call 6 degrees of seperation...."it's trickle down economics"... Jeez when will you liberals realize that the conservative principles were right all along...
Posted by jamflu at 6:16 PM : May 27, 2009

That's the dumbest thing I've ever heard from a republitard. Trickle down was supposed to be the big money trickling down to us, bozo! Not just every day business income... we were supposed to prosper big time along with our stinking rich bailed out buddies... but that didn't happen, did it? Instead, we got tinkled on... the proverbial yellow rain as our filthy rich buddies gamed the system and drained the treasury and our retirement accounts to pay for unnecessary wars and enrich their already rich pals... we all know what happened, and we're not going to forget. Who knows if Obama's right with the way he's dealing with this load of poop you guys left us, but I know for sure that republicans are a bunch of proven f**kups who couldn't run a neighborhood kool-aid stand let alone the government of what was once the worlds lone super power until those fools took the reins. Scream and cry WOLF all you want... we don't hear you anymore 21%ers... the republican solution, plastic sheeting and duct tape, yer a$$! You sold us out to Haliburton and Blackwater and yet you still wear that s**t eating grin because you got over and have enough to survive comfortably during the current trials and tribulations. Hmm, how interesting. How are the rest of us going to survive? The forclosures are big news, but what you don't hear about is there are Americans starving today because of what you guys did. Obviously we'll have to get our support (i.e. food and beer) from somewhere... and that somewhere is you... the next victims of our economic collapse. Please, keep up your uppity attitudes and identify yourselves by driving your Mercedes and BMW's and Lexus' and Hummers so they can readily identify you. Keep looking down on good people who through no fault of their own (meaning your fault) have fallen on hard times and see how long you last in the desperate scramble for survival that will ensue. If it came down to it, I'd suck the marrow from your bones with glee to ensure my family's survival... remember that you draft dodgers and other reprobates that make up today's republican party and keep trying to scare us with your lame towel head wet dreams when the real enemy has been revealed to be YOU... and we all know it now. Every day you praise your sins and dig a deeper grave to entomb the party I supported for over 30 years. I can only think of the shortest sentence in the modern bible to describe you morons.... 'Jesus wept.'

[debinok1]

...."it's trickle down economics"... Jeez when will you liberals realize that the conservative principles were right all along...
Posted by jamflu

That is and always has been the problem with "trickle down economics" it only takes effect when it is time to cut loses.

[jamflu]

Guess what they call this principal that you call 6 degrees of seperation...."it's trickle down economics"... Jeez when will you liberals realize that the conservative principles were right all along...