Everything works until it doesn't! At what point will you default?!

[BillBoard]

I cannot find who said it: "When the economy expand savings are destroyed by inflation, when it is contracted equity is destroyed."

That's exactly what is happening right now!

I have many friends in the auto repair industry, their business is down over 80%. Basically they are giving away their equipment and tools for cents on the dollar to keep some of their capital.

It is clearly evident that people will burn through their savings before defaulting giving the impression of a sudden default, but in hindsight they knew at what point they had become insolvent.

Again, I cannot find the post where someone here said the government's plan would be to issue emergency benefits cards if people started to riot. The politicians didn't extend unemployment, so let's see if those out of money turn to crime, and in consequence there is an emergency that requires issuing benefits cards.

[flintlock]

Re: Everything works until it doesn't! At what point will you default?!

That's interesting about the auto repair industry. I would have thought they would be doing okay with people holding on to their cars longer. Perhaps your friend is in part just a victim of that industry's shady reputation. I know in mine, home electrical service and repair, people don't trust us anymore. There are too many snakes out there and they know it. Now they put off relatively simple and inexpensive repairs because they've been burned in the past. And they don't want to pay even if the repair is legit. I know nothing makes me more nervous than having to take my vehicle in for repair. The loss of integrity in business in general in America is appalling.

Of course I guess people are driving less miles with the economy and that is bound to hurt the repair business. And people must also have the ability to pay. But you'd think with lower auto sales, business would be booming.
Funny you should mention this, because yesterday I was helping to get a rental home ready for occupation by a Mercedes mechanic. I guess he'd lost his job in Florida and had to move here to find work.

I've noticed even fairly well off customers bitching more about the price of things. Even when I point out that I'm charging them less than I did about 5 years ago. And they never complained a bit back then. I've had to tell a few to go get some estimates and then call me back. They almost always do, but still grumble a lot more than they used to. Americans are overextended and they know it. They are trying to make it back by putting off repairs on cars and their homes. Things like that.

[dbarberic]

Re: Everything works until it doesn't! At what point will you default?!

That's interesting about the auto repair industry. I would have thought they would be doing okay with people holding on to their cars longer. Perhaps your friend is in part just a victim of that industry's shady reputation. I know in mine, home electrical service and repair, people don't trust us anymore. There are too many snakes out there and they know it. Now they put off relatively simple and inexpensive repairs because they've been burned in the past. And they don't want to pay even if the repair is legit. I know nothing makes me more nervous than having to take my vehicle in for repair. The loss of integrity in business in general in America is appalling.

Of course I guess people are driving less miles with the economy and that is bound to hurt the repair business. And people must also have the ability to pay. But you'd think with lower auto sales, business would be booming.
Funny you should mention this, because yesterday I was helping to get a rental home ready for occupation by a Mercedes mechanic. I guess he'd lost his job in Florida and had to move here to find work.

I've noticed even fairly well off customers bitching more about the price of things. Even when I point out that I'm charging them less than I did about 5 years ago. And they never complained a bit back then. I've had to tell a few to go get some estimates and then call me back. They almost always do, but still grumble a lot more than they used to. Americans are overextended and they know it. They are trying to make it back by putting off repairs on cars and their homes. Things like that.

Maintance and repair can be deferred, but never completely eliminated. Small repairs eventually turn into big problems if ignored. I suspect that there will be a shakeout and the result will be fewer remaining players with the ability to charge higher prices (inflationary). Those who can survive, will probably do OK.

[jneal3]

Re: Everything works until it doesn't! At what point will you default?!

I would have thought they would be doing okay with people holding on to their cars longer.

I suspect that there will be a shakeout and the result will be fewer remaining players with the ability to charge higher prices (inflationary). Those who can survive, will probably do OK.

Agreed, look at the financial performance of retail parts distributors since the crash, AutoZone has roughly doubled for example. I was cold-called on yesterday by the local owner of a Speedy auto service center, he said their approach is to build long-term clientele thru good service at low price (words, I know), but if I had the capital backing that's what would make sense if I was trying to drive the small players out of business.

[llanlad2]

Re: Everything works until it doesn't! At what point will you default?!

BILBOARD It is clearly evident that people will burn through their savings before defaulting giving the impression of a sudden default, but in hindsight they knew at what point they had become insolvent.

Reminds me of that Hemingway quote from the Sun also Rises

"How did you go broke?"
"Two ways. Gradually and then suddenly."

[Chomsky]

Re: Everything works until it doesn't! At what point will you default?!

Reminds me of that Hemingway quote from the Sun also Rises

"How did you go broke?"
"Two ways. Gradually and then suddenly."

It's actually, "How did you go bankrupt?", but that's a minor nit to pick.

[don]

Re: Everything works until it doesn't! At what point will you default?!

Reminds me of that Hemingway quote from the Sun also Rises

"How did you go broke?"
"Two ways. Gradually and then suddenly."

And: "To make a fortune, start with a big fortune."

[don]

Re: Everything works until it doesn't! At what point will you default?!

It seems to be seeping down into the core of merchandising. An outfit I've ordered from for years ran a plausible sale (not to-good-to-be-true) and I replenished my stock on hand, about a $230 order. I received and heard nothing. No response to emails. A phone tree from hell. (regardless what option picked, after long waits, numerous songs, and repeated one-liners, they all ended with the too-familiar chimes of disconnect). I Google'd the company and found a host of warnings, bad experiences, non-response and going out of business suspicions. Luckily my CC company got my order rescinded. The point I'm trying to make is, I soon felt that when a company is about to go bust, fleece your steady customers for all you can, and this is the point, there are no consequences with the law. It's every man for himself. This is the TBTF legacy being transmitted down the pike. Great balls of FIRE....

[GRG55]

Re: Everything works until it doesn't! At what point will you default?!

That's interesting about the auto repair industry. I would have thought they would be doing okay with people holding on to their cars longer. Perhaps your friend is in part just a victim of that industry's shady reputation. I know in mine, home electrical service and repair, people don't trust us anymore. There are too many snakes out there and they know it. Now they put off relatively simple and inexpensive repairs because they've been burned in the past. And they don't want to pay even if the repair is legit. I know nothing makes me more nervous than having to take my vehicle in for repair. The loss of integrity in business in general in America is appalling.

Of course I guess people are driving less miles with the economy and that is bound to hurt the repair business. And people must also have the ability to pay. But you'd think with lower auto sales, business would be booming.
Funny you should mention this, because yesterday I was helping to get a rental home ready for occupation by a Mercedes mechanic. I guess he'd lost his job in Florida and had to move here to find work.

I've noticed even fairly well off customers bitching more about the price of things. Even when I point out that I'm charging them less than I did about 5 years ago. And they never complained a bit back then. I've had to tell a few to go get some estimates and then call me back. They almost always do, but still grumble a lot more than they used to. Americans are overextended and they know it. They are trying to make it back by putting off repairs on cars and their homes. Things like that.

My read is the stresses all over the world are still building. Canada managed to escape much of the carnage so far, but all the indicators are suggesting things are starting to come unravelled. I just spoke with my wife on the phone [I am overseas again] and she told me that the Subway store in one of the small towns near the bunker site just got robbed. Geezus, how much money can you get robbing a sandwich shop? Weekly donations at her church are down 30% from last year. Food bank usage continues to climb rapidly while the organizers struggle to get in enough donations to go around. The shelters in the city are unable to meet the nightly demand from the homeless. And all this is going on in a part of Canada that is supposed to be doing quite well since it has little manufacturing and a high resource/commodity aspect to the regional economy.

As for car repairs, as a hot rodder in my youth, some aspects of modern cars are now far more complicated so the repairs tend to be more expensive, and this is compounded by the inability of us former "shade tree mechanics" to do as much of our own work. However, I think we will see a rise in things like night school courses on how to save money by doing basic maintenance, such as oil changes. What I can sense is that even people who can't or won't do their own work may take these courses just to improve their ability to understand what their garages are telling them needs to be done to maintain the aging car fleet - so they don't feel they are being ripped off.

That said, I still hold to my decades old view that the cheapest way to own a car is to maintain it well and drive it until it turns to dust. Our vehicles consist of "his and her" domestic full-size pick-up trucks, both have well over 150,000 miles, and I maintain them to a high standard. We expect to drive both for many more years to come.

[BillBoard]

Re: Everything works until it doesn't! At what point will you default?!

This puts a dent on long term business planning... contracting economy, you don't know who may be left to do business with.

[flintlock]

Re: Everything works until it doesn't! At what point will you default?!

Maintance and repair can be deferred, but never completely eliminated. Small repairs eventually turn into big problems if ignored. I suspect that there will be a shakeout and the result will be fewer remaining players with the ability to charge higher prices (inflationary). Those who can survive, will probably do OK.

That is exactly what I have seen in my industry. A shakeout. Only the part about charging higher prices has not yet reached fruition! Actually, it probably has. I know for a fact I could charge more and there is not a damn thing many could do about it. I'd just get tired of the flack I get for it. You can't imagine how many people agree to a price, sign a contract and then try to welsh on the deal. Many will admit I was the low bid yet still complain and ask for a reduction. As if THEY get to set prices. I've also noticed this tends to be the guy driving the BMW and wearing the Rolex. What these idiots don't understand is that every penny doesn't go in my pocket. I make a LOT less than they think I do. A LOT.

[flintlock]

Re: Everything works until it doesn't! At what point will you default?!

he said their approach is to build long-term clientele thru good service at low price

That has been my long term philosophy except I'd probably change the "low prices" to moderate prices.

[flintlock]

Re: Everything works until it doesn't! At what point will you default?!

there are no consequences with the law. It's every man for himself

This phenomena is what leads me to believe the world as we know it is falling apart. Bad guys have come to realize you can get away with almost anything. Law enforcement is overburdened and sometimes lazy. Fraud is no longer illegal apparently but rather a "civil matter" to be turned over to the lawyers. A caller yesterday phoned into a national consumer talk radio show. An employee stole some checks and passed them for large amounts. The local sheriff was no help at all. Since when was this not a FELONY? Sorry, but being too busy chasing down pot smokers and prescription drug addicts is not an excuse.

[BillBoard]

Re: Everything works until it doesn't! At what point will you default?!

That is exactly what I have seen in my industry. A shakeout. Only the part about charging higher prices has not yet reached fruition! Actually, it probably has. I know for a fact I could charge more and there is not a damn thing many could do about it. I'd just get tired of the flack I get for it. You can't imagine how many people agree to a price, sign a contract and then try to welsh on the deal. Many will admit I was the low bid yet still complain and ask for a reduction. As if THEY get to set prices. I've also noticed this tends to be the guy driving the BMW and wearing the Rolex. What these idiots don't understand is that every penny doesn't go in my pocket. I make a LOT less than they think I do. A LOT.

Thicker skin may help. I set my prices high and then cut them some slack. Then, I also turn down business to be exclusive. works like a charm most of the time.

[BillBoard]

Re: Everything works until it doesn't! At what point will you default?!

This phenomena is what leads me to believe the world as we know it is falling apart. Bad guys have come to realize you can get away with almost anything. Law enforcement is overburdened and sometimes lazy. Fraud is no longer illegal apparently but rather a "civil matter" to be turned over to the lawyers. A caller yesterday phoned into a national consumer talk radio show. An employee stole some checks and passed them for large amounts. The local sheriff was no help at all. Since when was this not a FELONY? Sorry, but being too busy chasing down pot smokers and prescription drug addicts is not an excuse.

Hmm, pretty much since the UCC has been in place...really murky areas in the negotiable instruments area. But then if you are poor and the prosecutor feels like it, you are going down.