What Things Will Disappear During the (Potentially) Upcoming Crash?

[studenteconomist]

I disagree with most on this site because I feel that not many luxuries will disappear. I fully expect SUVs, “affordable luxury” items, large houses and what not to still be around after the bust. It may be that people consume less of those, or they may only have some but not all the trappings of excess, but let’s look at history. The 1980’s were called the decade of greed, but they were handily outdone by the 90’s dot com era excess. And the 00’s with their rapper lifestyle and absurdly expensive purses and cell phones makes the 90’s look modest. See the trend? The 10’s will be even more absurd, as the increase in the wealth of the world just keeps on going up. Don’t see that trend ending in the next two decades for certain. The housing bust will redistribute the wealth to different people (possibly foreigners) but it will go somewhere. It is not the valuation of houses which is really allowing us to have more stuff, it is the increasing production of goods, worldwide, that increases our material wealth. I can’t see that trend decreasing over the long haul (more than a decade).

[kewp]

NO MORE SIGN SPINNERS!!!

Or, possibly, new ones pointing to liquor stores and bankruptcy attorneys.

[PerryChase]

lindi, I love Dwell Magazine! California used to be innovative with the mid-century modern house, the open floor plan and the sliding patio door. Then we gave up the innovation to go retro with Spanish/Mexican revival and Italianate architecture. Our furniture became some strange eccletic style (see Jerome’s furniture). I call that the “Dynasty” effect. Remember the Carringtons?

I’m hoping for simplicity and beauty to prevail over bling.

——-

studenteconomist, i agree with you. Goods that were previously luxuries are now commodities. Often times the only thing that differentiates a commodity from a luxe item is marketing. We owe this to the manufacturing revolution. I can observe that when I travel to poor countries. They too have their houses filled with junk. It will take another century more (if ever) for people’s desires to acquire stuff to subside.

We are now entering a service revolution, with nails, spa, car washers, cable television, internet, cell phones, etc…

A whole lot of people have $250/month cable/internet/phone bills. I have no cable and my Internet is the basic DSL at $12.99. I wouldn’t even have a cell phone if it weren’t work related. Between HOA and other service junk, our generations today pay at least $500/mo more than our parents.

[ibjames]

this would be the new housing standard

Little houses

not entirely serious.. but a perfect example is the house I live in now.. 1000 sq. ft. just my wife and I, and we think we could raise a kid there. I’m sure kids were raised there before

edit: I can’t add a link.. so here is the url for copy/paste
http://realestate.msn.com/buying/Article_CSM.aspx?cp-documentid=1209895

[Anonymous]

I would also like to see Britney go, but I don’t think so. My mother in law, who lived through the Depression, always said she doesn’t think she could have made without movie stars. Their fancy lives enabled you to get away from the grind of poverty. Here’s a list of things I think will go away

1. Outrageusly expensive kids birthday parties and cheapo made in China party favors that belong in the trash.

2. “Must-have” fads that don’t mean anything nor solve any problems, nor improve your quality of life, such as Uggs, gadgety cell phones.

3. Ditto for gas guzzlers.

4. Christmas ornaments that cost $25.

5. Battery operated tooth brushes.

6. Brookstone.

7. 10 burner stoves for a family of four.

8. Hawaii vacations paid for with credit card debt.

9. The third car.

10.

[Anonymous]

Great ideas!

Amen, to no more sign-spinners!

Those little homes are cute, and would make a perfect backyard 'granny flat.'

Very creative, Josh, the 'debt-band'!

Other things that will go by the wayside:

1.  500 HP Corvettes, 600 HP Mercedes, and 1000 HP Bugattis (gas will be expensive with the devalued dollar).

2.  $50-100K for a late '60s American muscle car; those sure have seen bubble pricing these last few years.

I expect to see deals not only on homes, but other things, too.  We're sailors in our family (we have a modest trailerable sailboat); I hope a fat cat needs to get rid of his Alerion Express 28.

[powayseller]

Nail salons will definitely go! Just look at what happened in Bloomfield Hills as a result of the auto industry layoffs. Upper-level executives cut back on spending. The wife of the local nursery store said the rich people were planting fewer annuals in the spring, so she had to cut back on her shopping, including getting her nails done. Several nail salons and hair dressers went out of business, and restaurants saw big sales declines. I can’t find the link now – it’s bookmarked on my other computer I think. When you can’t pay your mortgage, and you lost your job, you don’t go out to eat, you don’t buy coffee at Starbucks, you don’t get your nails done. Just imagine you lost your job today. You’d stop sending your kids to activities, drop the private school, sell the extra car, etc. People can be frugal when forced.

[powayseller]

I found the article. Down and Out in Bloomfield Hills

The town is an enclave of the wealthy. The country club has a waiting list of people trying to get out of their membership, and has reduced its membership fee from $15,000 to $45,000. So you see, this city is for the wealthy. But even the wealthy cut back on their expenses.

Excerpt
“Anna DiMaria, 65, ran beauty businesses in the area for nearly four decades. But last summer, she closed down her once-thriving Capelli Spa because she says at least 30% of her wealthy client base had cut back on visits or stopped coming. “Instead of getting facials every month, they’d get them every three months,” she says. “They’d say, ‘My husband and I have talked it over. We’re taking a cut in our luxuries.’ ”

Some clients were getting their false nails taken off to save the $70 monthly maintenance fee, says Ms. DiMaria. “They’d tell me, ‘I want to let my nails breath.’ They didn’t want to reveal it was an economic decision.”

[masayako]

What Things Will Disappear During the (Potentially) Upcoming Crash?

1. You will see much less BIG SUVs and, in general, cars over $55,000.
2. Small mortgage companies will disappear.
3. Expensive Spa will disappear.
4. American car dealerships (especially Ford)
5. House remodeling business(ie granite countertops, kitchen remodeling, flooring, landscape design etc..)
6. High price restaurants
7. Jerome’s and Mors furnitures (old fashion furniture store)

[kaycee]

I don’t think nail salons will dissapear. High end salons that also do nails will, yes. But those “in/out” shops that do your nails for $6 will thrive. The people who were spending $70 a month on their nails will downgrade. Manicures are like lipsticks. In a recession, lipsitck sales go up because women are cutting back on luxuries but will treat themselves to a >$5 new lipstick. Women will stop coloring their hair but they will treat themselves to a $6 manicure.

Sign spinners must be a west coast thing. I don’t know what they are so I don’t think we have them out here on the east coast.

[poorgradstudent]

I think it’s important to separate high end full service salons from the smaller places with names like “Turbo Nails 2000”, staffed mainly by recent immigrants (usually Vietnamese?). Your lower end places may actually do BETTER in a mild recession, as when people are forced to tighten their belts they more often scale back in level rather than cutting things out entirely.

Also, when people can’t afford big expensive things, they tend to spend more on small luxuries. Think of it as relative vs. absolute cost. This is why I’m unsure on the future of Starbucks. I already can’t understand why people buy their $6 drinks (I sometimes buy a regular coffee and add sugar and creme, which totals around $2). But clearly there are a lot of people who disagree with me.

[masayako]

People don’t just go to Starbucks to buy a cup of coffee; they buy a lifestyle. To many people, spending $6 dollar (eqv. to an average daily wage for a white collar worker in China) for a personalized cup of drink define who they are. It sends a message:

“Look at me, I am rich (in reality: dumb) enough to buy a customized cup of drink on a daily basis. I am a made man. I can afford that; it’s just pocket change.”

Your monthly deposit of $180 ($6 per day 30 days/mon) for 10 years with an interest rate of 5% compounded monthly with an initial starting balance of $ 6:

Year vs. Dollars
1 2216.5
2 4540.1
3 6982.57
4 9550
5 12248.8
6 15085.66
7 18067.67
8 21202.24
9 24497.18
10 27960.69

Starbucks fans, you guys are looking at losing about $27,960 dollars in 10 years. That’s a whole lot of coffee. 🙂 In fact, with this kind of money, you can buy yourself a coffee farm in central Vietnamese where one can grow his/her own coffee business.

Life is all about making the right decisions.

” This is why I’m unsure on the future of Starbucks. I already can’t understand why people buy their $6 drinks (I sometimes buy a regular coffee and add sugar and creme, which totals around $2). But clearly there are a lot of people who disagree with me.”

[PerryChase]

I can understand why people go to Starbucks. In today’s busy and stressful world, a cup of Starbucks is nice respite from the surrounding environment. Starbucks stocks will continue to do well despite the coming economic downturn.

But best not to drink coffee at all. It makes your body “hot,” increase inflamation within the body and accelerates the ageing process.

[Anonymous]

Please point to the study in humans, PC; surmising from benchtop and animal data is interesting, but not definitive. Please show me where scientists have demonstrated important untoward effects — increased rate of heart attack (due to inflammation of the coronary system), etc. — from coffee.

Some surmise that coffee SLOWS the aging process, as coffee is a powerful antioxidant (coffee has higher levels of antioxidants than green tea does).

[lindismith]

(coffee has higher levels of antioxidants than green tea does)

jg – will you tell me where you found that info? I am a nutrition nut, and have not read that before.

[Author]

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