The economy is slowing down like a trucker who popped speed and drove for 36 hours straight.
People accumulated debt and toys and parked them in storage units or along their back-fence. Previous administrations papered over the pot-holes in the pavement and the debt wasn't too big of a burden, so there the toys sat.
Even as recently as 15 years ago, when the economy slowed down people would park their campers or trailers or snowmachines or boats or murdercicles along the side of the road with a "For Sale" sign. A fellow who was patient and frugal could cherry-pick through the offerings and pick up some gently-used items for a very attractive price.
That was a much better use for those items than to have them slowly rusting away beneath the mulberry trees.
Another factor that is coming into play is that we are "aging out". How many 75 year-olds want to hop on their quad and go zooming through the woods? How many want to hitch-up the 24' camper and tow it to a campground?
One key point about purchasing used toys is to have some cash in your pocket...or secreted somewhere safe in your vehicle. It doesn't have to be a lot of money. A desperate person might take $200 for something they had $500 written on the for-sale sign if it is cash-right-now and it-is-all-I-have.
But we are going to get a $5000 check from Elon!
Maybe we will. Maybe we won't.
My guess is that they will talk about it for a while and then the checks, if they come, will show up in early-to-mid October. Then, if there is a 2026 "dividend" it will show up at the same time.
Why October? Because people have short memories. A big check in October will have the maximum effect on the elections and the incumbents will benefit.
Bonus images
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| Consider the "universe" of businesses. Some survive on volume and others are "boutiques" that create revenue based on mark-up |
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| Examples of businesses that survive on volume are Walmart, Dollar General and Ford Motor Company |
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| Businesses that are examples of "boutique economy" are places that sell JUST super-expensive Tee Shirts, or baseball hats with 600% mark-up or $250 pairs of tennis shoes. On the opposite end of the automotive spectrum from Ford might be Tesla. |
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| In an expanding economy, one would expect the upper-left corner to show growing revenues and growth in square-footage. It would come at the expense of the volume that had been going to Walmart et al. |
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| At the beginning of a contracting economy, one expects revenues at Walmart et al to expand at the expense of the boutique business. In turn, the boutique business are extreme fragile during downturns because it is difficult to supply service and new inventory when revenue is choked off. |
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| When the REAL economy is very sick, the revenue (on continuing operations) of the Walmart et al firms sags. |
Those images are to provide a frame-of-reference for this article "Walmart predicting slowdown for 2025"
The gurus on Wall Street are puking because the cooked-numbers of the previous Administration said "Everything is fine. Pay no attention to the man behind the curtain." But when Walmart predicts declining revenue, EVERYBODY takes notice.
ERJ, I do anticipate - and see signs now - that the "toys" are starting to go on sale. To your point, I find myself even less in an interest to buy such things.
ReplyDeleteAnd yes, cash or cash equivalents are very helpful.
Land, I'm hoping to get cheap land.......
DeleteGood luck with that friend. Land rarely drops in value unless a real issue is involved.
DeleteNow tax lien sales like the Great Depression Bankers did to folks that could find enough cash to pay them...
And like the Bankers they used their power to keep others out of the bidding. I bet Blackrock will do the same during Greater Depression 2.0.
If we get checks equivalent to the savings DOGE imposed, how does that change the debt/deficit problem?
ReplyDeleteIt's murdercycle, not murdercicle (those last are frozen).
"How many 75 year-olds want to hop on their quad and go zooming through the woods?"
Most still want to, don't kid yourself. 'Can' is a bigger question.
...those of a certain age mentioned above (I am one of those) seem to trade the quad for a side-by-side (step in) for the back roads/woods or a golf-cart (for the 'villages' if that's where we landed for our last days). Works for me, at least, and quite a few of the gray-beard neighbors around me.
Delete"DOGE checks?" good grief, then nothing has changed, just the speed of the trajectory to dark days...
The Trump tariffs are going to hurt us short term. When the Manufacturing infrastructure gains on increasing demand, then the economy will grow.
ReplyDeleteThat's what my faded cracked crystal ball indicates.
I'm Wrong.
A lot.
I might quibble about the inclusion of murdercycles on your list of superfluous toys, Joe.
ReplyDeleteTo me the bike is a great hedge against harder financial times. They are cheap transportation and when money is tight - the bike makes a heck of a lot more financial sense than the van or car does.
In my case I shot myself in the foot by getting a big cruiser with a larger engine and the fuel economy is on par with a small care. But a good road/trail bike in the 650cc class will get you around and at significant savings. I might even consider it an essential part of prepping.
If its inner city or close distance suburban commuting, the even smaller e-bikes may even do it even better than a motorcycle. Not nearly as cool, but try walking your motorcycle up the apartment stairs to your suite where it stays safe and sound.
DeleteI'm not a biker, but my wife has three. Maintenance on the BMW and Harley cruiser is required and when done, cash registers sing quite a song The Honda Roadsmith trike is also very bulky.
I routinely get 220-250 miles on a 5 gallon tank in my 650.IIn this case, Filthy is absolutely correct.
DeleteThe slowing of growth of Walmart may be a harbinger for the general economy, I agree. In medium-town indiana reduced growth of wally'sworld might not be all bad news.
ReplyDeleteHow much more of the local market in groceries can Walmart take? How resilient can a community be if 40% of their (collectively) groceries come from one supplier?
Walmart has radically changed rural America. They couldn't have done it without us. I believe the future is...
Local
Local
and
Local.
Plan accordingly.
Milton
They passed the MESTA, sounds nice but will cost jobs, my business will pay out 8k plus be shorthanded 700 hrs.
ReplyDeleteYour business will adapt or close.
DeleteSuch has been the world of business forever.
Ask the buggy whip makers about that.
I figured the $5k was like "campaign promise", not really going to happen but a nice rumor. Then again I thought the "Gulf of America" was meant as a distraction rumor too...
ReplyDeleteI heard it allowed Trump to get around the Biden restrictions on drilling in the Gulf of Mexico that were enacted before he left office. I could be wrong, but an interesting possibility.
Delete-In Muskegon
Anecdotal:
ReplyDeleteThe illegals that filled the grocery side of my local Walmart every Sunday have nearly disappeared for the past month. Maybe they're just laying low or maybe they self-deported. But it's hugely noticeable.
"Toys" are for excessive money or midlife crisis credit card use.
ReplyDeleteBuying "Toys" when the economy is slowing down and the "R" word or worse the Depression comments nearby seems a bad choice.
If it's useful, it's not a "Toy". But a Hobie Adventure tri sailboat with all the bells and whistles for 2K (like I saw recently) is buying a tax burden with little chance your going to go fishing off it enough to feed the family.
Unlike say 2K of canned foods put away in a cool dry place for later.
OR 2K cash to keep the Tax Man from putting your home on the courthouse steps for Blackrock to bid on. The Great Depression had many examples of "Toys" for sale AND homes and farms lost for lack of tax money.
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ReplyDeleteSecond attempt: I do the cash in multiple pockets method. HOWEVER, if I run into a for real widow that is selling "his" stuff, I never low ball. I will be honest and tell her what it's really worth. God watches over the widows and orphans... and cheating them is a sure way to find a Biblical spanking. YMMV if you are willing to fall into the hands of the Almighty.
DeleteI ran into that scenario one time twenty plus years ago. Lady had a metal box full of huge sockets, among all her late husbands other tools and stuff. Told me $20. I sighed, pulled one out and said, "You know this one by itself is worth $20?" She said, "Yeah, I know." Okay, and thank you very much. I'm pretty sure she was fine financially and just wanted it all gone. I wasn't about to take advantage of her.
DeleteThere are always options. HOW you choose those is up to you.
ReplyDeleteThe three stages if life....wanting stuff, acquiring stuff, getting rid of stuff. As we grow old we realize that you don't own things, the things own you.
ReplyDeleteIt may be that Trump has taken the helm too late to save what was left of America. What cannot continue will not. And we may have reached the tipping point where nothing and nobody can save the economy...and the country. We shall see....very soon.
Dan, maybe stopping spending American treasure and American "Advisers" blood across the world might help?
DeleteSomeone smarter than I said, "When you're in a hole stop digging".
Family wealth is a biblical thing as in Proverbs 19:
The Man of Integrity
…13A foolish son is his father’s ruin, and a quarrelsome wife is like a constant dripping. 14Houses and wealth are inherited from fathers, but a prudent wife is from the LORD. 15Laziness brings on deep sleep, and an idle soul will suffer hunger.…
Spending the family wealth for "Toys" isn't prudent but then again multi-generational wealth transfer seems to have died in America around the Nuclear Family put granny in the retirement home era.
I notice that multi-generational wealth is alive and well in China, Asia and wealthy families across the globe.
I for one am incredibly excited to see all the waste being exposed and cut off by Musk/DogeTrump. I can stop digging when I find myself in a hole, but the government is another story!
Delete