the paradox of thrift [Archive] - The Paceline Forum

Climb01742

03-08-2009, 06:31 AM

Ken Robb

03-08-2009, 07:37 AM

As somebody wrote to me lately "cash is king now". If you can pay cash for a used car you will be amazed at how little you have to pay for a very nice car. Lots of distressed sellers who will be delighted for you to take the millstone of a car they can not afford from around their neck. Blue Book values are notheing but wishful thinking these days.

Wouldn't you feel better with more $$ in the bank as a cushion against further erosion of the economy?

The parts you already own are so good why not use them? You will enjoyt the thrill of a cool new bike. In a while,if you feel confident spending $$ on a new gruppo, you will have the thrill almost as good as a new bike again. Or maybe you'll feel smart for having saved the $$ and just keep riding it as is.

FWIW, I replaced my 1998 M3 with a 2007 Mini Cooper S with 6,000 miles on it. It's a kick to drive, has averaged 31 mpg since new, and lets me fit 10 bikes, 1 motorcycle, and 2 cars in a double garage. I looked at Porsches, Corvettes, GTis, Z4s, M3s, etc. but none of them were more fun to drive and they all cost a lot more and none fit in the garage with the other toys. I can take 3 other people for short trips with no luggage or Les and me with plenty of luggage on longer journeys. One bike fits inside --just. So far, I feel like I made a very smart purchase.

SamIAm

03-08-2009, 07:48 AM

Len J

03-08-2009, 07:54 AM

I think your awareness about the conflict inherent in spending today is spot on for most of us that are lucky enough to still have a predictible income.

I'm trying to sell a house right now so I can move my wife in with me...........the buyer psycology is interesting. Everyone appears to be "paraylized" as they all wait for the bottom and their wait, is delaying when the bottom will occur. I have one guy, who is afraid of losing another $25K on a Million $ house that he plans to live in for 10 to 15 years. How irrational is that?

But fear, by it's very nature is irrational, so we wait.

In thinking about the situations you describe, I think it's not an either/or decision A spend/don't spend (or it shouldn't be. I think this time we are going through is a reminder about finding balance betwwen the don't spend/spend to by the most expensive. IMO, there is nothing wrong with helping a LBS/Friend by sending business his way. As long as your personl financial condition is OK.

Good thread, BTW

Len

Sandy

03-08-2009, 08:01 AM

i'm about to build up my crumpton. my LBS is willing to give me a very good price on a 7900 group. but there's a little voice in my head that is saying, in this economy, isn't it smarter to swap a 7800 group i have onto the crumpton? i could build up the bike_completely_with bits i have and spend as little as possible. that would help me. but it wouldn't help my pal at the shop. or help the economy. and if i were to spend some money, what would mean more to me? the roughly $2k for 7900? the $1200 for the 7850 shimano wheels i'm curious about or the 404s cc.com has on sale? these choices aren't just about money but the psychology/confidence of spending the money.

and there's this...

the lease on my car is ending soon. so i started looking. i saw that porsche has a $499 lease on a cayman. that's basically what i'm paying now. but a cayman is "more" car than i now have. i made a few calls. porsche dealers are beginning the discussion at $13k off list. it's insane. but there's this little voice in my head that is saying, in this economy, isn't it smarter to find something that is less than i'm now paying? i sure don't_need_a cayman, but if the lousy economy is making one a relative bargain... or is it "wiser" to get a cheaper GTI or mini??

these things just brought home how psychology and confidence are really factors in our spending now, and how each of us, in small ways, plays a part in which way our economy will go.

personally, spending as little as possible is probably prudent. but is that "best" for the economy? i'm glad i don't have to pull the trigger on anything right now. i got no clear answer, but as i thought about these two situations, it just really hit me how psychology is at play today every time we think about spending money. i know i'm lucky to have these choices. thank you, life.

are other folks feeling the same paradox?

I have a Cayman S- a truly spectacular car, but for literally one half the price, one can purchase the new Nissan 370Z. Per the Road and Track April 2009, test comparison of the new 370Z to the 2008 Cayman S (year that I have- 2009 have increased hp and a few very nice new options), the base of the 370Z is $29,930 versus the base of $59,100 for the Cayman S. In a direct comparison test, the Nissan 370Z and Cayman S were about equals in the perforamance comparison, but the Cayman S won almost every category in the comparison test ( Nissan scored very high) because of overall refinement and powerplant/chassis harmony, per Road and Track.

The Nissan 370Z might be the best sport car for the money. If I were purchasing now, I would certainly look at the Nissan 370Z. Much better value for sure. Not as refined though.

As you know already, I assume, there is the Cayman and the Cayman S.

Sandy

1centaur

03-08-2009, 08:12 AM

Yes the psychology is there. I see it every day and I feel it sometimes too. Won't change until unemployment starts going down and GDP goes up.

IMO, you will undermine the special one-time-only beginning of your Crumpton relationship if you get thrifty on it. You won't get that moment back if you upgrade later. You should consider the Vuma Quad, 25% off at cbike today, vs. the 7900 crankset - a lot of grams saved at a low net cost. Don't get the 404s, trust me, they are not special vs. Reynolds or Edge rims in speed or feel and they're much heavier - they will detract from that frame.

chuckroast

03-08-2009, 08:18 AM

I've been noodling this theory for the last couple of weeks that consumer confidence will begin inching upward as the weather starts to warm up over the next 30 to 45 days. People can't stay gloomy forever and the spring fever will begin to loosen the wallets and purses.

I also think retailers will grow increasingly creative in their efforts to get customers back in the stores.

As for us, my wife wanted to get out for a few days so we're going to Vegas at the end of the month. Talk about bargains to be had, we're staying free for two of the three nights we're there.

saab2000

03-08-2009, 08:26 AM

I have a Cayman S- a truly spectacular car, but for literally one half the price, one can purchase the new Nissan 370Z.

The Nissan is probably by any real measure a superior car. Or at least superior in terms of value.

But the Cayman S makes me swoon! And that's what I'd drop my Benjamins on if I had 600 of them sitting in my house with nothing better to do with them.

The Cayman S is IMHO one of the most desirable sports cars available. It is not yet too big and bloated to be a real sports car.

Now, back to the program.

hansolo758

03-08-2009, 08:26 AM

I'm no economist (nor do I belong to Greenpeace) but the notion that we should spend money to save the economy never made sense to me, regardless of whether Dubya or Barry says it. So, if you can afford 7900, and it'll make you happy, go for it. But don't plunk down money for 7900 over 7800 because it'll help your LBS or the economy. If spending money to save the economy is the rationale, why not go all the way and get electronic DA? Why not get some Lightweights too, while you're at it? Why not another frame -- maybe another Crumpton for those days your bike is in the shop, or for a rain bike? If you were happy with the 7800, stick with it.

Same reasoning applies to the car. If you can afford the Cayman and it'll make you happy, go for it. Otherwise, if you don't need it emotionally, don't.

You might be interested in this op-ed article in today's NY Times by Tom Friedman:

http://www.nytimes.com/2009/03/08/opinion/08friedman.html

Ray

03-08-2009, 08:31 AM

personally, spending as little as possible is probably prudent. but is that "best" for the economy?
Why do you think they call it a paradox? To me, it points out that a lot of assumptions we make about markets aren't necessarily true. The big one is that people act in their own rational self-interest, everyone will be better off. In times like this, hoarding resources sure feels like the right thing to do for self-interest. If there's even a reasonable chance I'm not gonna have a job next month, I want all the cash I can get to see me through whatever period of unemployment I'm coming in for. But clearly, when people do this, the economy tanks even further. So, what is rational behavior? Of course, the basic assumption that people are rational actors is probably the first big fallacy. We're capable of being rational, but when things get crazy (up OR down - take your pick), we tend to react out of fear, exuberance, panic, you name it. Lots of highly irrational decisions are made during very good times and very bad times. If you're still in the stock market, now is a terrible time to sell. We're probably not at the bottom, but we're a lot closer to the bottom than the top - we've already lost MOST of the value we're gonna lose. But the gut feeling at a time like this is to RUN! Get the hell out of there now. Bad decision, but a common one. When the market was at 13,000, people were buying like crazy - rational?

We're all victims of human nature. I TRY to fight it and act prudently during good times so I still have the wherewithal to get through bad times reasonably well. Hell, when I took delivery of my new Spectrum four years ago, I put old parts on it, eventually getting a new set of wheels. People couldn't friggin' BELIEVE that one. But its the frame and the wheels that determine how a bike rides. As long as the components are maintained and in working order, I don't care how shiny they are! I found that to be rational, but lots of people thought I'd lost my mind. And, now, I can still afford tires, chains, and cables. Which should keep me on the road.

-Ray

Len J

03-08-2009, 08:37 AM

Why do you think they call it a paradox? To me, it points out that a lot of assumptions we make about markets aren't necessarily true. The big one is that people act in their own rational self-interest, everyone will be better off. In times like this, hoarding resources sure feels like the right thing to do for self-interest. If there's even a reasonable chance I'm not gonna have a job next month, I want all the cash I can get to see me through whatever period of unemployment I'm coming in for. But clearly, when people do this, the economy tanks even further. So, what is rational behavior? Of course, the basic assumption that people are rational actors is probably the first big fallacy. We're capable of being rational, but when things get crazy (up OR down - take your pick), we tend to react out of fear, exuberance, panic, you name it. Lots of highly irrational decisions are made during very good times and very bad times. If you're still in the stock market, now is a terrible time to sell. We're probably not at the bottom, but we're a lot closer to the bottom than the top - we've already lost MOST of the value we're gonna lose. But the gut feeling at a time like this is to RUN! Get the hell out of there now. Bad decision, but a common one. When the market was at 13,000, people were buying like crazy - rational?

We're all victims of human nature. I TRY to fight it and act prudently during good times so I still have the wherewithal to get through bad times reasonably well. Hell, when I took delivery of my new Spectrum four years ago, I put old parts on it, eventually getting a new set of wheels. People couldn't friggin' BELIEVE that one. But its the frame and the wheels that determine how a bike rides. As long as the components are maintained and in working order, I don't care how shiny they are! I found that to be rational, but lots of people thought I'd lost my mind. And, now, I can still afford tires, chains, and cables. Which should keep me on the road.

-Ray

Double post...sorry

Len J

03-08-2009, 08:37 AM

saab2000

03-08-2009, 08:49 AM

When the market was at 13,000, people were buying like crazy - rational?

Since the precipitous fall in the value of my portfolio, I have increased my contributions. Twice.

Some famous investor said, "Buy low, sell high".

BTW, I am also not convinced that by spending more money we are boosting the economy. A diverse economy should have strengths based on many things, not just consumption.

MarinRider

03-08-2009, 08:51 AM

The free market system assumes that we act in our self-interests, it does not promise rationality nor "a sense of greater good". It does promise, however, to be fair, effective, and swift.

The invisible hand is right now slapping everyone in the face, hard. Everyone from day labors in Central Cal to billionairs in NYC are impacted. The speed of which this is occuring is astonishing. This might be a good thing if you listen to people like Friedman in the NYT.

The free market system, just like it can create a bubble on the high end, can also over-correct on the low end. It does not promise anything other than being fair, effective, and swift.

Where I am with all this? I am with Buffet in thinking that this is a time of opportunity but it's wise to carry excessive liquidity.

Sandy

03-08-2009, 08:55 AM

Cash IS king in the economy and I treat it like that in most cases. I make an exception on bicycles though. If I could afford 7900, there is no way I would be putting 7800 on a new Crumpton. After feeling the 7900 at NAHBS, uh uh.

On the other hand I wouldn't be trying to hand the local shop 4-500 more dollars for the 7900 than I could buy it elsewhere. That seems more like charity, but there is nothing wrong with that either. Remember its the global economy that sucks, not just the U.S.

Also, I would guess that most people have not felt the effects of this economy in terms of job/salary etc. Sure 401k's have eroded in value, but most people aren't counting on those for day to day living anyway. So in most cases nothing has changed tangibly except the psychology of this market.

The reason I conserve cash at a time like this is because I want to be able to put it to work as there will never be a better time to make a lot of money relatively quickly going forward.

Wow! I disagreed significantly with you before on the economy some months back, and only disagree that much more now with your statements. You are not a microcosim of the economy. You mentioned in a previous thread that you made $3 million last year and paid $1.5 million in taxes, if I remember correctly. You have the cash that many families simply do not. They cannot save and are barely able to meet current financial demands. Many have lost their jobs, their homes have decreased in value, their investments have been decimated, they are behind in mortgage payments, and they are unable to obtain credit. Conserve cash- What cash?

Recent economic news-

1. Loss of 650,000 jobs in February with unemployment reaching 8.1%, with an expected double digit unemployment rate.

2. Nearly 11% of mortgages are delinquent or in foreclosure.

3. GM is at a 75 year low and faces bankruptcy. Citigroup (C) traded uner $1 last week. GE is at $7.

4. 4.4 million jobs lost since recession began in December of 2007. 2.6 million in the last 4 months alone.

5. 12.5 million people looking for jobs- more than population of Pennsylvania.

6. Worst year (2008) for new house sales since 1982.

7. GDP shrank at a 6.2% annual rate in last 3 months of last year.

A lot has changed tangibly, not just the psychology of the market. I vehemently disagree with your assessment.

Sandy

Ray

03-08-2009, 09:10 AM

The invisble hand is right now slapping everyone in the face, hard. Everyone from day labors in Central Cal to billionairs in NYC are impacted. The speed of which this is occuring is astonishing. This might be a good thing if you listen to people like Friedman in the NYT.

The free market system, just like it can create a bubble on the high end, can also over-correct on the low end. It does not promise anything other than being fair, effective, and swift.

I agree that the market does what its supposed to do to 'correct' our stupidity. And I'm amazed at just how 'swift' it can be. But fair, I'm not sure about. Sure, there were a lot of people who did really stupid things, like buy too much house, lend too much money to people who weren't qualified, borrowed too much against a home value that would ONLY ever go up, etc. And they were punished by the market, as is appropriate. And even some of us who didn't do anything wrong, but watched our stocks go up and up and up, are now shocked to see them go down and down and down. But we didn't do anything to 'deserve' the rapid climb or the rapid descent - we're just on the roller coaster. And if we're smart, diversified enough to still be doing OK.

But what about the hardworking people at the bottom who aren't buying fancy stuff, who don't own their own homes (or who do but bought prudently) who are now losing their jobs, their homes, and any semblance of a life. This is an inconvenience to a lot of us, and opportunity to others, but an existential threat to a significant number of people. How is that fair? What did they do other than work hard just to hang on? OK, they're not the financial geniuses who figured out how either build a legitimate business or how to play the system and get rich. The rich usually deserve to be rich. And the poor usually deserve to be poor. But destitute? I don't see any fairness in that for a LOT of the folks who are ending up living in cars and scrounging for food now. I'm not sure how fair that is, honestly. Those are the people I worry about most in times like these. Not myself, whose standard of living will suffer, but probably not horribly. Not the folks around here who make enough to have to pay higher taxes (I'd be willing and able to, but it sounds like I'll be getting a small break instead). But people to whom circumstances like this represent a true threat to their very lives. I don't see the fairness of the market in this. Just sayin'.

-Ray

martinrjensen

03-08-2009, 10:50 AM

i'm about to build up my crumpton. my LBS is willing to give me a very good price on a 7900 group. but there's a little voice in my head that is saying, in this economy, isn't it smarter to swap a 7800 group i have onto the crumpton? i could build up the bike_completely_with bits i have and spend as little as possible. that would help me. but it wouldn't help my pal at the shop. or help the economy. and if i were to spend some money, what would mean more to me? the roughly $2k for 7900? the $1200 for the 7850 shimano wheels i'm curious about or the 404s cc.com has on sale? these choices aren't just about money but the psychology/confidence of spending the money.

and there's this...

the lease on my car is ending soon. so i started looking. i saw that porsche has a $499 lease on a cayman. that's basically what i'm paying now. but a cayman is "more" car than i now have. i made a few calls. porsche dealers are beginning the discussion at $13k off list. it's insane. but there's this little voice in my head that is saying, in this economy, isn't it smarter to find something that is less than i'm now paying? i sure don't_need_a cayman, but if the lousy economy is making one a relative bargain... or is it "wiser" to get a cheaper GTI or mini??

these things just brought home how psychology and confidence are really factors in our spending now, and how each of us, in small ways, plays a part in which way our economy will go.

personally, spending as little as possible is probably prudent. but is that "best" for the economy? i'm glad i don't have to pull the trigger on anything right now. i got no clear answer, but as i thought about these two situations, it just really hit me how psychology is at play today every time we think about spending money. i know i'm lucky to have these choices. thank you, life.

are other folks feeling the same paradox?
I'm sorry. Obviously I am in a different financial state than you. I find it Incomprehensible (to me) to hear the words "Porsche" and "personally, spending as little as possible is probably prudent." in the same paragraph.

That said, if you don't put your existing groupo on, you will have to buy another bike for those parts, so buying "new" will cost you another frame down the road. I am pretty sure that it is actually illegal to have a complete groupo for a bike "just sittling around" without building it up, (at least in the northern states). Putting those parts on this frame, well....if you don't like them you can always buy the new groupo later. It's unlikely he will raise the price seeing as the economy will probably stay this way for a little while. I'm sure that deals are going to be everywhere soon.

soulspinner

03-08-2009, 10:58 AM

Gee Climb, this is your passion. Passion raises the boundaries and limits. Cut something else out...

Ti Designs

03-08-2009, 11:29 AM

personally, spending as little as possible is probably prudent. but is that "best" for the economy?

I'm going to take one huge step back to see the big picture, and use my own version of an over simplified economy. Let's say there are 100 people on the planet, all of whom live in one area. Each of them has this idea of what their quality of living should be, which includes a huge house, a spouse, 2.2 kids and a dog. There should also be at least 3 cars parked out front, two of which should fit at least 6 people. They all go about figuring out how they are going to finance all of this, spreading the payments out over time - don't worry it's the future, it'll take care of itself! And the system works fine for a while. They borrow, they print money, they build their huge houses and buy their cars - better yet, they lease their cars, why pay for what you don't use? At some point someone notices that there's really nothing behind all this borrowing, nor is there any market for off-lease cars. Come to think of it, their whole standard of living is so far beyond their value that it all comes crashing down. Oversimplified as it is, it's a damn good model of the real estate market as it stands. It was a great idea to offer mortgages to anyone who wanted part of the american dream, but could we afford it?

My answer to this came five years ago with my divorce. I was left at a point where I couldn't both heat my house and buy food. I simply lowered my expectations - nothing or nobody in this world owes me anything, I have what I earn. It's giving up the american dream, but it's allowed me to thrive in an economy which has everyone else complaining. Will not spending choke the economy? I don't think so. Living has expenses, which is what the economy runs on. Reducing the drain on the economy will reduce the debt that the population builds up over time, which has to be good for the future.

Climb01742

03-08-2009, 11:36 AM

I'm sorry. Obviously I am in a different financial state than you. I find it Incomprehensible (to me) to hear the words "Porsche" and "personally, spending as little as possible is probably prudent." in the same paragraph.

That said, if you don't put your existing groupo on, you will have to buy another bike for those parts, so buying "new" will cost you another frame down the road. I am pretty sure that it is actually illegal to have a complete groupo for a bike "just sittling around" without building it up, (at least in the northern states). Putting those parts on this frame, well....if you don't like them you can always buy the new groupo later. It's unlikely he will raise the price seeing as the economy will probably stay this way for a little while. I'm sure that deals are going to be everywhere soon.

being prudent and the porsche are the different choices, not the same choice. but i know that a) i'm lucky; b) even bringing up the porsche can be seen as tactless, for which i apologize. when porsches can be leased for $499, you know the economy is in the dumpster.

one other clarification: the 7800 grouppo isn't just sitting around. it would come off of a frame.

MarleyMon

03-08-2009, 11:45 AM

Hey Climb - I find all this somewhat heartening, in that if someone in marketing / PR / advertising is considering spending money, things can't be that bad. :)
You know your business prospects, I'm sure you'll spend based on that.
Buy from your LBS if they are close in price.

Get the Porsche if you want and can afford it.
You sure don't have to apologize for it.

I'm not into DA, though, i'm making the leap to SRAM!
fwiw DA 7800 still brings decent prices on ebay.
I just sold some and was happy w/ withwhat I got for shifters and RD.

martinrjensen

03-08-2009, 11:50 AM

one other clarification: the 7800 grouppo isn't just sitting around. it would come off of a frame.
Lucky for you, I was thinking of reporting you to the police. I myself just barely excaped incarceration for parts hanging around the house, parts that were not on an actual frame.
I'm legal now, but not for long, as the parts are re-acumulating.

So if you took the 7800 series parts from the existing frame, what would you do with that frame? I think the same law applies to bare frames too. You don't want to get in trouble here do you?
if you had a good lawyer I guess you could qualify it as a "spare" or backup frame. That surely is a loophole that needs to be fixed

android

03-08-2009, 12:00 PM

one other clarification: the 7800 grouppo isn't just sitting around. it would come off of a frame.

If you bought the Crumpton 6 months ago, you would have put 7800 and been quite happy to do so. There is no compelling reason to put on 7900 other than the newness and wow factor. 7900 will not be better or faster and 7800 will not be any slower or detract from the coolness of the bike in any way. That's looking at it from the more objective price/performance point of view.

If you want to impress your friends with bling, the 7900 will do it unless they are SRAM Red lovers or boutique CNC lovers. But you can't please everyone.

rcnute

03-08-2009, 12:11 PM

If you can afford to spend, spend. If you cannot, don't. Sounds like you can.

Smiley

03-08-2009, 12:12 PM

Climb, building up my new Bedford Tourer with bits and pieces of old parts lying around. I'd do just that and wait for the electronic stuff to get cheaper and better cause that stuff is really nice. The 7900 is just a stop gap until Shimano has their stuff broken in and filtered down the product line.

MarinRider

03-08-2009, 12:13 PM

I agree that the market does what its supposed to do to 'correct' our stupidity. And I'm amazed at just how 'swift' it can be. But fair, I'm not sure about. Sure, there were a lot of people who did really stupid things, like buy too much house, lend too much money to people who weren't qualified, borrowed too much against a home value that would ONLY ever go up, etc. And they were punished by the market, as is appropriate. And even some of us who didn't do anything wrong, but watched our stocks go up and up and up, are now shocked to see them go down and down and down. But we didn't do anything to 'deserve' the rapid climb or the rapid descent - we're just on the roller coaster. And if we're smart, diversified enough to still be doing OK.

But what about the hardworking people at the bottom who aren't buying fancy stuff, who don't own their own homes (or who do but bought prudently) who are now losing their jobs, their homes, and any semblance of a life. This is an inconvenience to a lot of us, and opportunity to others, but an existential threat to a significant number of people. How is that fair? What did they do other than work hard just to hang on? OK, they're not the financial geniuses who figured out how either build a legitimate business or how to play the system and get rich. The rich usually deserve to be rich. And the poor usually deserve to be poor. But destitute? I don't see any fairness in that for a LOT of the folks who are ending up living in cars and scrounging for food now. I'm not sure how fair that is, honestly. Those are the people I worry about most in times like these. Not myself, whose standard of living will suffer, but probably not horribly. Not the folks around here who make enough to have to pay higher taxes (I'd be willing and able to, but it sounds like I'll be getting a small break instead). But people to whom circumstances like this represent a true threat to their very lives. I don't see the fairness of the market in this. Just sayin'.

-Ray

Ray,

I agree with everything you stated.

When I used the word fair, I did not mean "just". I meant that that market is indiscriminate, that we all participated in a sense, benefited in the boom years and hurt by it in the down years, that we all had the opportunity to "cash in" our portfolios last July, or stay out the market this decade, that it is fair in that we are free to act out of our free will, and with equal opportunities.

Fairness in that context does not mean justice or equality. I should have been more clear.

Birddog

03-08-2009, 12:14 PM

This is a no brainer re. the groupo. Buy the 7900, list the7800 in the classifieds. By doing so, you add to the dynamics of the economy. Helping the economy is not just about buying new, it includes all buying and selling.

Birddog

SamIAm

03-08-2009, 12:15 PM

Wow! I disagreed significantly with you before on the economy some months back, and only disagree that much more now with your statements. You are not a microcosim of the economy. You mentioned in a previous thread that you made $3 million last year and paid $1.5 million in taxes, if I remember correctly. You have the cash that many families simply do not. They cannot save and are barely able to meet current financial demands. Many have lost their jobs, their homes have decreased in value, their investments have been decimated, they are behind in mortgage payments, and they are unable to obtain credit. Conserve cash- What cash?

Recent economic news-

1. Loss of 650,000 jobs in February with unemployment reaching 8.1%, with an expected double digit unemployment rate.

2. Nearly 11% of mortgages are delinquent or in foreclosure.

3. GM is at a 75 year low and faces bankruptcy. Citigroup (C) traded uner $1 last week. GE is at $7.

4. 4.4 million jobs lost since recession began in December of 2007. 2.6 million in the last 4 months alone.

5. 12.5 million people looking for jobs- more than population of Pennsylvania.

6. Worst year (2008) for new house sales since 1982.

7. GDP shrank at a 6.2% annual rate in last 3 months of last year.

A lot has changed tangibly, not just the psychology of the market. I vehemently disagree with your assessment.

Sandy
You should have listened months ago when I told you how to make money in this market.

saab2000

03-08-2009, 12:17 PM

You should have listened months ago when I told you how to make money in this market.

I have been exceedingly fortunate in this market. But not everyone has that luxury. If I lose my job my fortunes will change very dramatically. And hundreds of thousands of people have lost jobs recently.

There ought not be any gloating in this economic climate.

SamIAm

03-08-2009, 12:25 PM

I have been exceedingly fortunate in this market. But not everyone has that luxury. If I lose my job my fortunes will change very dramatically. And hundreds of thousands of people have lost jobs recently.

There ought not be any gloating in this economic climate.

There is no gloating, simply pointing out that there are options even in this market, that is all. Don't give up.

SamIAm

03-08-2009, 12:31 PM

Louis

03-08-2009, 12:48 PM

You know you're at the top of the food chain when these are the sort of problems you have.

Like attending a Marie Antoinette garden party, trying to decide what flavor cake strikes your fancy.

Birddog

03-08-2009, 12:59 PM

You know you're at the top of the food chain when these are the sort of problems you have. Like attending a Marie Antoinette garden party, trying to decide what flavor cake strikes your fancy. Reply With Quote

I think that was uncalled for. This is/was a civilized discussion and appropriate for the times. Climb asked a legitimate question and put forth his own emotional/practical dilemma. Paradoxical? you betcha.

Birddog

BumbleBeeDave

03-08-2009, 01:19 PM

You should have listened months ago when I told you how to make money in this market.

I am sure that I come off overly harsh and unsympathetic.

Why yes, you do, as a matter of fact. :no:

Just sayin . . . Head on down to the local department of social services and sit in the waiting room for a little while--if you can force your way in the door. It's crowded . . .

BBD

Louis

03-08-2009, 01:35 PM

I think that was uncalled for. This is/was a civilized discussion and appropriate for the times. Climb asked a legitimate question and put forth his own emotional/practical dilemma. Paradoxical? you betcha.

Just doing my part, trying to stir up some class warfare. ;)

Len J

03-08-2009, 01:56 PM

here is the thing to me..........we have to make sure that the cure isn't worse than the disease. As we move the pendelum from one extreme, we don't move it all the way to the other extreme.

Like it or not, our entire exonomic system is based on consumption. No consumption = no jobs = no consumption. The tough part is to get the right balance of consumption with the right unemployment with the right confidence level.

Consumption is not good or bad...it just is. It's the level and duration and the relationship to one's earnings that creates the problems.

IMO

Len

1centaur

03-08-2009, 02:03 PM

For Ray, I'll get a little Kung Fu: Unfair is fair.

Relatively free markets are rational capital allocators if the goal is increasing the size of the pie as quickly as possible (regulations need to exist to keep the GDP growth express running smoothly, rather than because fat cats are bad, bad people who need to be punished). The bigger the pie the more there is for the population. Through luck, talent and hard work, some people will do really well in that scenario and others will do really badly for lack of those attributes. That they do badly is an inherent part of the fairness of a market-based system growing as much as possible.

If society decides to spend resources to compensate people on the wrong side of the luck/talent/hard work equation we reduce our economic potential and thus hurt the population by reducing the potential aggregate standard of living. Do that enough and you also create geopolitical pressures that could severely diminish quality of life for everyone. Do it too little and you feel too bad about life so it does not matter that you have a better standard of living. Getting that equation right is what politics would be about if politicians were not actually thinking about themselves. It's difficult for society to make politicians get it right when so many people don't understand economics. That is an educational failure that should be addressed in high school but is not and will not be.

This description assumes that leisure time and medical advances and nice bikes and iPods and great education and a wide variety of foods and the Internet are the types of advances society wants as soon as possible. If instead we want to meditate and grow our own vegetables and die at a young age while other countries act the same way then there is much less need for the unproductive to do much worse than than the productive.

BTW, the paradox of thrift is a concern in the aggregate but not at the micro level. One person spending will not make enough of a difference to the economy or to the individual retailer in 99.9999% of the cases to make it a justification to spend. It takes broad swaths of people spending or not spending to make a difference. That's what makes a stimulus bill so difficult to write. Tax cuts can give all tax payers more money to spend, but will they spend it? Government taking money out of people's pockets and spending it is a way around that, but is it too localized? One-time tax cuts are least likely to be spent. Longer-term tax cuts create good incentives but need to be made to those who perceive that. The arithmetic favors those cuts going to the most productive, but today's politics is blind to that. Create long-term slow growth by having the wrong tax structure and you impoverish society.

BTW, I've spent some decent money at the LBS lately and will be spending a bunch more. It may not help really, but I can sense the relief across the counter. It's not a reason to spend, but it makes it feel just a little better.

Sandy

03-08-2009, 02:15 PM

You should have listened months ago when I told you how to make money in this market.

Months ago you said that business was good and the economy was fine. You were incorrect then. You are looking at the economic situation through dark glasses, from your perspective. Try glasses of those who don't have what you have.

Sandy

Climb01742

03-08-2009, 02:16 PM

You know you're at the top of the food chain when these are the sort of problems you have.

Like attending a Marie Antoinette garden party, trying to decide what flavor cake strikes your fancy.

louis,

most economic theories feel remote and abstract. but this one, the paradox of thrift, feels like it's played out in our lives every day. that's why it seemed appropriate or at least interesting to raise it, particularly since it related to a cycling purchase.

to your specific point: i understand how these choices sure beat trying to decide do you pay for utilities or food. as i've said twice now, i know i'm lucky. but i sure don't feel like i'm at the top of the food chain. i'm not hurting but like most of us, if i lost my job, i would be hurting sooner rather than later. but i also knew even bringing up this thread would open me up to comments like yours. fair enough. but is not discussing these sorts of questions with "friends" better than being silent?

and for a final piece of the puzzle, i do realize that those of us who are doing ok now have a responsibility to help those who aren't. my firm created this effort, from scratch, and funded the creation and ongoing maintenance of it out of our pockets:

http://www.smallcanbebig.org/

we've helped 20 families keep their homes so far and counting.

BumbleBeeDave

03-08-2009, 02:28 PM

Like it or not, our entire exonomic system is based on consumption. No consumption = no jobs = no consumption. The tough part is to get the right balance of consumption with the right unemployment with the right confidence level.

. . . This is about the most concise, best description I've seen of where we seem to be.

The struggle is to get it back toward the center without overshooting the other direction--and do it without totally breaking what's left of the system. But how do you do that when the confidence level has fallen right through the floor? I hope the guy in the White House has some people coaching him who really know the answer . . . and I would think that no matter which party is in there. It's a big bag of flaming poo and I'm glad I'm not responsible for figuring out how to step on it before the whole house burns down.

BBD

Pete Serotta

03-08-2009, 02:34 PM

yep :banana:
I have a Cayman S- a truly spectacular car, but for literally one half the price, one can purchase the new Nissan 370Z. Per the Road and Track April 2009, test comparison of the new 370Z to the 2008 Cayman S (year that I have- 2009 have increased hp and a few very nice new options), the base of the 370Z is $29,930 versus the base of $59,100 for the Cayman S. In a direct comparison test, the Nissan 370Z and Cayman S were about equals in the perforamance comparison, but the Cayman S won almost every category in the comparison test ( Nissan scored very high) because of overall refinement and powerplant/chassis harmony, per Road and Track.

The Nissan 370Z might be the best sport car for the money. If I were purchasing now, I would certainly look at the Nissan 370Z. Much better value for sure. Not as refined though.

As you know already, I assume, there is the Cayman and the Cayman S.

Sandy

Pete Serotta

03-08-2009, 02:38 PM

I very wise and intelligent friend of mine said many years ago that when the economy gets bad in the metropolitan area his high end bike sales went up - folks bought the Colnago instead of the Ferrari. In the climate things have been more severe than I have ever seen, but I am starting to see folks spend for that special bike as the weather gets warmer,,,,,

SamIAm

03-08-2009, 02:48 PM

Months ago you said that business was good and the economy was fine. You were incorrect then. You are looking at the economic situation through dark glasses, from your perspective. Try glasses of those who don't have what you have.

Sandy

Business was and is good for the company I work for. I was merely saying that not all companies are in dire circumstances and in fact that the economy is better than the public believes and it is if only because the public believes the worst. My other point was this is not the time to run its the time to invest and there are good things to invest in, believe it or not.

I would say its you that have the dark glasses on. Mine are letting in more light.

Sandy

03-08-2009, 02:49 PM

Also don't lose sight of the other statistic which is that more than 9 out of 10 still have a job. Not great for sure, but still 9 out of 10. And I would further hazard to guess that most of those 9 out of 10 have not taken pay cuts. Now unless you are dependent on investments for lifestyle purposes, 9 out of 10 should not have to adjust their lifestyle if they choose not to. But the good news is most have and are spending less and paying off credit. Good things for the individual, not so good short term for the economy. As far as houses losing value, stay in your house or if you can afford to sell at a reduced price do it and buy another house that has lost equivalently or more.

I am sure that I come off overly harsh and unsympathetic. If you think that, you don't know me. I do get tired of the constant doom and gloom though.

Clearly I do not know you. But your great generosity given to many on this forum speaks highly about you as a person. I just totally disagree with you relative to the impact of the economy on people.

The 9 out of 10 have been significantly impacted also. Say goodbye to pay raises for most. Less hours of overtime. What about bonuses that employees often receive? Do you not think that they have been reduced severely? Shared costs, such as hospitalization.? Perks?... Families with two incomes which now have one, but with the same financial obligations? Many people have already changed their retirement plans/dates because of the precipitous drop in the equity of their retirement plans you refer to. They realize that they will have to work for years longer than anticipated. The equity markets could turn around and go up 100% and they would be a long way from where they were. A very long way.That is not a major impact?

Business owners are not, for the most part, expanding but contracting their business, doing little or no hiring, and selling less, making less, and using up money they have. Do you not see many closed businesses in your area with vacancy signs and no one taking the spots left? Where do companies obtain loans to help operate their business? Surely, you must agree that the credit system is in turmoil. Do you not anticipate many more business owners going bankrupt? Some are just hanging on.

Stay in their house? Some can't afford to. Sell the house and buy another house which has lost equivalently or more? And what will be their loan source?

Yes you do come off a bit overly harsh and unsympathetic, but you come off more that you have no idea the hardships and financial difficulties many are having, even the 9/10 you refer to. You are too smart not to see that.

Without getting political (PLEASE), where do you think the money will be coming from to pay for the staggering propsed budget and the programs to jump start the economy? Certainly, not from the 1/10, but from the 9/10. That is obvious.

Sandy

palincss

03-08-2009, 02:50 PM

is ending soon. so i started looking. i saw that porsche has a $499 lease on a cayman. that's basically what i'm paying now. but a cayman is "more" car than i now have. i made a few calls. porsche dealers are beginning the discussion at $13k off list. it's insane. but there's this little voice in my head that is saying, in this economy, isn't it smarter to find something that is less than i'm now paying? i sure don't_need_a cayman, but if the lousy economy is making one a relative bargain... or is it "wiser" to get a cheaper GTI or mini??

Well, sure. That Cayman positively sucks as a bicycle transporter.

SamIAm

03-08-2009, 02:55 PM

Why yes, you do, as a matter of fact. :no:

Just sayin . . . Head on down to the local department of social services and sit in the waiting room for a little while--if you can force your way in the door. It's crowded . . .

BBD

Give it a rest. As I said you don't know me. Instead of heading down to the department of social services, I think I will do what I do, continue to add jobs to this economy, thus clearing the waiting room ever so slightly.

BumbleBeeDave

03-08-2009, 03:02 PM

I would say its you that have the dark glasses on. Mine are letting in more light.

. . . to see all the homeless people wandering around downtown Indy?

When you hear the words "Great Depression" what image comes to mind? It probably ain't the 75% of Americans who still had jobs. And it's not the thought of the certain percentage of Americans who did prosper during those times. For me it's the FSA pics of shabby guys selling apples on the street. The families in their old Model T's piled high with everything they own, trying to go somewhere, anywhere else where there might be work. Real Grapes of Wrath stuff . . .

Well, we aren't quite to that point--yet. But the longer this goes on the more obvious signs like that there will be---IF you decide to see them. There are millions of people already out of work and millions more family members who depended on them. The "Great" depression lasted for over TEN years. If the current depression or recession--whatever you want to call it--keeps going the numbers who can't find work and are turned out of their homes will climb. There will no way be enough relatives or shelters to take them all in.

Have some sensitivity for the less fortunate--because you might be surprised just how short a streak of bad luck it could take to put you right where they are. I have a feeling many more Americans are going to find out before the stock ticker starts heading back up.

BBD

Ahneida Ride

03-08-2009, 03:04 PM

If you spend 10K on a hot chit Serotta, well you purchase one bike ...

But if you deposit 10K in a bank, fractional reserve banking allows the
potential of 90K to be created outa nothing to purchase 9 Serottas.

So, who is "stimulating" the economy, the purchaser of the Serotta or the
guy who puts the frns in the "bank" ?

Makes no sense? Right ? It's not supposed to.

palincss

03-08-2009, 03:04 PM

My other point was this is not the time to run its the time to invest and there are good things to invest in, believe it or not.

Any specific suggestions?

Ray

03-08-2009, 03:08 PM

If society decides to spend resources to compensate people on the wrong side of the luck/talent/hard work equation we reduce our economic potential and thus hurt the population by reducing the potential aggregate standard of living. Do that enough and you also create geopolitical pressures that could severely diminish quality of life for everyone. Do it too little and you feel too bad about life so it does not matter that you have a better standard of living.
You say compensate. I say cushion. I don't believe in permanent welfare (I got close enough to the situation that engendered to see what a human disaster it was), but I believe that in times like this, we need to have a solid safety net in place for people who are forced out onto the street through no fault of their own. I don't see raising the top rate from 34.5% to 39% as a real re-distribution problem. As you said, do it too much and you create problems, do it too little and you create problems. I'm arguing for 'just right'. Again, back to Goldilocks economics. But since nobody know what 'just right' looks like, during times of crisis like this, I'd rather err on the side of too much.

-Ray

Birddog

03-08-2009, 03:10 PM

Hey SamIam, clear out your PM box. I might want to rip your head off, or maybe not.

Birddog

Climb01742

03-08-2009, 03:13 PM

Well, sure. That Cayman positively sucks as a bicycle transporter.

funny thing is, that one fact may trump any and all financial machinations. a mini or gti are small, fun and can hold a bike. oh yes, and they'll also hold me, the mrs and my daughter. ;)

rpm

03-08-2009, 03:16 PM

I've been thinking about this paradox of personal virtue being collective vice. For me a resolution comes in terms of removing the deception and delusion from our personal and collective lives.

So many of us have deluded ourselves into thinking that we can have it all--a huge house, multiple cars, and everyday luxury. And so much of our economy has been built on enabling those delusions, to the profit of the enablers and the detriment of the deluded. Sure it was delusional for people to think that they could afford a $500,000 mortgage with a $40,000 income, but the people who offered those kinds of mortgages were as knowlingly deceitful and immoral as Bernie Madoff.

And it was delusional to think that we could simultaneously fight two wars and lower taxes with no consequences to our economy. It was also delusional to think that financial markets would police themselves with lax regulation and oversight. And it's delusional to think that we can forever deplete finite natural resources and pour toxins into the air without consequences.

We'll climb out of this ditch with brutal honesty--honesty to ourselves about what we really need and can afford, and honesty to one another enforced though tighter regulation and oversight.

For me, I've been living within my means (except for buying that Harlequin CDA last summer that I really didn't need--but it was such a good deal and I did have parts) so I don't feel a need to be gloomy just because others are. I'll be off to Hawaii in a couple of weeks for my annual sort of extravagant but actually fairly modest spring trip.

bn70

03-08-2009, 03:23 PM

If you want to be a snob buy a Maserati, they are much nicer and not based on a 44 year old design or manufactured by VW. BTW I don't think a baby porsche impacts the real economy in the US too much, better to buy a Shelby ?

SamIAm

03-08-2009, 03:27 PM

Hey SamIam, clear out your PM box. I might want to rip your head off, or maybe not.

Birddog

Ouch, I am praying for not, but clearing mailbox asap!

palincss

03-08-2009, 03:36 PM

funny thing is, that one fact may trump any and all financial machinations. a mini or gti are small, fun and can hold a bike. oh yes, and they'll also hold me, the mrs and my daughter. ;)

We are cyclists. How well a car performs as a bicycle carrier should be of enormous importance to us.

In addition to Minis and GTIs, don't overlook the Honda Fit. According to jbay and Ray, it's a superb bicycle carrier, as well as being a great economy car that's lots of fun to drive.

1centaur

03-08-2009, 03:42 PM

I believe that in times like this, we need to have a solid safety net in place for people who are forced out onto the street through no fault of their own. I don't see raising the top rate from 34.5% to 39% as a real re-distribution problem.-Ray

That net will also be for people who ARE at fault, there being no means of making that determination and no point.

34.5% to 39% (plus ever more phase-outs of deductions) is a real re-distribution program both by definition and by political promise to those getting the distribution's effect. However, I know what you are saying - you think it's not big enough to seriously hurt the retirement and college savings efforts of those in that bracket.

Ray

03-08-2009, 03:43 PM

In addition to Minis and GTIs, don't overlook the Honda Fit. According to jbay and Ray, it's a superb bicycle carrier, as well as being a great economy car that's lots of fun to drive.
The Fit is fun to drive relative to other economy cars. Which I'm fine with, but many others around these parts wouldn't be. It handles very well (at least the models through '08) but it's got roughly ZERO power off the line. Once you get it moving, you can have a bit of fun with it if you keep the revs up, but its no Mini or BMW or Porsche or even Miata. But it does ROCK as a bicycle carrier. To me, the versatility, function, and economy of it trump the fun factor. To others, not so much.

-Ray

johnnymossville

03-08-2009, 04:00 PM

We are cyclists. How well a car performs as a bicycle carrier should be of enormous importance to us.

That pretty much sums it up for me these days.

sjbraun

03-08-2009, 04:14 PM

I test rode a new Cannondale Super Six last week. It was equipped with DA 7900. I thought it shifted like Shimano, not that different from the Ultegra that's on my 7 year old tandem.
Aside from the under the bar wrap cabling, I didn't think it was anything to write home about.

But what do I know, I like Campy.

Steve
Tucson

PS-The Cannondale was really nice, light, compliant, and it went around corners nicely

Pete Serotta

03-08-2009, 04:37 PM

[QUOTE=SamIAm As I said you don't know me. Instead of heading down to the department of social services, I think I will do what I do, continue to add jobs to this economy, thus clearing the waiting room ever so slightly.[/QUOTE]

He does do that and is also a gentleman. He gets his bikes the old fashion way,,,,HE WORKS FOR THEM!!! :D

hansolo758

03-08-2009, 05:06 PM

<<snipped>>
PS-The Cannondale was really nice, light, compliant, and it went around corners nicely

Yes, but was it laterally stiff? :D

Ken Robb

03-08-2009, 05:57 PM

We are cyclists. How well a car performs as a bicycle carrier should be of enormous importance to us.

In addition to Minis and GTIs, don't overlook the Honda Fit. According to jbay and Ray, it's a superb bicycle carrier, as well as being a great economy car that's lots of fun to drive.

I think all of the above is true except I didn't find it any fun to drive at all. Utilitarian yes, but not a fun or sporty drive.

TimD

03-08-2009, 05:59 PM

Certainly not a 370ZX...

Ray

03-08-2009, 06:02 PM

I think all of the above is true except I didn't find it any fun to drive at all. Utilitarian yes, but not a fun or sporty drive.
Out of curiosity Ken, did you drive the '08 or '09? The auto writers tended to really like the feel of the '08 and thought the '09 was a lot less direct. I like the '08, with the limitations mentioned earlier. But then, I'm not coming from a background of beemers and other high performance cars, so I'm more easily amused.

-Ray

Ti Designs

03-08-2009, 07:17 PM

I have a Cayman S- a truly spectacular car, but for literally one half the price, one can purchase the new Nissan 370Z. Per the Road and Track April 2009, test comparison of the new 370Z to the 2008 Cayman S (year that I have- 2009 have increased hp and a few very nice new options), the base of the 370Z is $29,930 versus the base of $59,100 for the Cayman S. In a direct comparison test, the Nissan 370Z and Cayman S were about equals in the perforamance comparison, but the Cayman S won almost every category in the comparison test ( Nissan scored very high) because of overall refinement and powerplant/chassis harmony, per Road and Track.

I lap the local road tracks faster in a showstock neon sport than more than 90% of the Porsche club in their 911's, Boxters and Caymen... It's not about the car.

David Kirk

03-08-2009, 08:04 PM

I lap the local road tracks faster in a showstock neon sport than more than 90% of the Porsche club in their 911's, Boxters and Caymen... It's not about the car.

word.

Dave

palincss

03-08-2009, 08:06 PM

I think all of the above is true except I didn't find it any fun to drive at all. Utilitarian yes, but not a fun or sporty drive.

Yeah, well, you were after all comparing it with a BMW M3...

RPS

03-08-2009, 08:12 PM

are other folks feeling the same paradox?I'd buy it if that's what you really want, but not out of guilt.

Louis

03-08-2009, 08:18 PM

most economic theories feel remote and abstract. but this one, the paradox of thrift, feels like it's played out in our lives every day. that's why it seemed appropriate or at least interesting to raise it, particularly since it related to a cycling purchase.

to your specific point: i understand how these choices sure beat trying to decide do you pay for utilities or food. as i've said twice now, i know i'm lucky. but i sure don't feel like i'm at the top of the food chain. i'm not hurting but like most of us, if i lost my job, i would be hurting sooner rather than later. but i also knew even bringing up this thread would open me up to comments like yours. fair enough. but is not discussing these sorts of questions with "friends" better than being silent?

James,

Thanks for the thoughtful reply. You put more effort into it than I did with my flippant comment. :cool:

See my soon to be sent PM for additional comments.

Louis

SamIAm

03-08-2009, 08:42 PM

Clearly I do not know you. But your great generosity given to many on this forum speaks highly about you as a person. I just totally disagree with you relative to the impact of the economy on people.Sandy

I get that, but I don't think we are going to change each others minds on this so let's let this one go.

The 9 out of 10 have been significantly impacted also. Say goodbye to pay raises for most. Less hours of overtime. What about bonuses that employees often receive? Do you not think that they have been reduced severely? Shared costs, such as hospitalization.? Perks?... Families with two incomes which now have one, but with the same financial obligations? Many people have already changed their retirement plans/dates because of the precipitous drop in the equity of their retirement plans you refer to. They realize that they will have to work for years longer than anticipated. The equity markets could turn around and go up 100% and they would be a long way from where they were. A very long way.That is not a major impact?Sandy

Pay raises combat price increases, but many things are much cheaper these days so I don't see that as a huge hardship, sorry. Bonuses are just that bonuses, if your lifestyle choices depend on getting your bonus, I respectively disagree with your choice. I have nothing but sympathy for families that have been are now one income having been two or one income, now zero. They need help and should get it, but they need to work to reduce costs where possible and be flexible about how to make money in the interim. Bear markets hit retirees hardest while providing the most opportunity for youth. I definitely see a huge impact there. I can't imagine getting to that point and then not having enough or going back to work. Very difficult, I am sure. A doubling of the market from here is very reasonable and it will go a long way toward making peoples investments whole. That would be a dow of 13k, just off the 14k high.

Business owners are not, for the most part, expanding but contracting their business, doing little or no hiring, and selling less, making less, and using up money they have. Do you not see many closed businesses in your area with vacancy signs and no one taking the spots left? Where do companies obtain loans to help operate their business? Surely, you must agree that the credit system is in turmoil. Do you not anticipate many more business owners going bankrupt? Some are just hanging on.Sandy

Business owners, especially small or highly leveraged are in huge trouble. I personally bought 2 companies out of bankruptcy in the last 6 months, saving all 70 jobs associated with them. I assume others do the same and thus the going out of business is minimized to some degree.

Credit markets are effed up for sure. But it IS still available just harder to come by.

Stay in their house? Some can't afford to. Sell the house and buy another house which has lost equivalently or more? And what will be their loan source?Sandy

Unless the wage earner or earners have lost a job or taken a paycut, they should be able to stay in their houses. Loans to buy houses are still very available with good credit. I am considering selling my house for a loss and buying an even more expensive one to more than offset the loss incurred on mine. If people can't afford to pay the mortgage, I am all for banks working with them but its the banks choice, not governments. If the bank wants the house, sad to say they should have it. I know that sounds horrible, but those were the rules. I lend privately and would always exhaust all possible options before foreclosing. I have one house where the mortgage is 6 months behind, but I just like the people and I know they will get back on their feet.
Yes you do come off a bit overly harsh and unsympathetic, but you come off more that you have no idea the hardships and financial difficulties many are having, even the 9/10 you refer to. You are too smart not to see that.Sandy

I apologize if that is the way I come off, but I am neither.
Without getting political (PLEASE), where do you think the money will be coming from to pay for the staggering propsed budget and the programs to jump start the economy? Certainly, not from the 1/10, but from the 9/10. That is obvious.

Sandy

Surely you don't think that I would support the need for the staggering proposed budget. Don't spend it and you don't have to pay for it.

johnnymossville

03-08-2009, 08:55 PM

When the day comes I can swing a Porsche, it's gonna be a 911. I always admire Cayman S when I see them though.

jimp1234

03-08-2009, 09:28 PM

Hmm... in 1974, I had to decide between buying a Porsche, a 63 S coupe for $3600, and a house around the corner from where I was renting for $12,000. Being young and foolish I naturally bought the Porsche. 6 years later I moved in with a girl I was crazy about, but she hated the Porsche so 2 years after that I no longer had the girl, but I did have a 80 Honda Accord..hmm.... Even in today's highly deflated Cal housing market that house is probably still worth around $400,000.. So my advice would be to use your current DA group, buy a 2-3year ol Mini or maybe a Subaru WRX, learn about your local real estate market and in the next 3- 6 months buy a foreclosed property either to live in, or one with a positive rent roll and preferably with a 15 year mortgage. btw this helps with the biggest problem in the current economy namely uncertain bank assets. In 10 or 15 years, you'll barely remember what car or bike you've got now, but a house worth double what you paid for it, and almost paid off, you'll certainly remember.

goonster

03-08-2009, 09:55 PM

not based on a 44 year old design or manufactured by VW.

You don't know what you're talking about.

NRRider

03-08-2009, 10:15 PM

Any specific suggestions?
This reminds me ever so clearly of those old TV commercials for EF Hutton. Those of you old enough to remember will know what I'm talking about.

Ti Designs

03-08-2009, 10:18 PM

You don't know what you're talking about.

A wheel on each corner and made in germany...

djg

03-08-2009, 10:29 PM

On the original thread: no, I don't really get it. Paradox. Aporia. Dispepsia. Souvlaki. None of it. Consumption may provide benefits for the consumer and, at the margin, others. Saving may provide benefits for the saver and, at the margin, others. Are you wrestling with the question what your ideal savings rate should be, not because you imagine that your spending or saving (or combination of spending and saving) will move (and revive) markets, but because you're looking for some sort of ideal social norm of spending/saving/worrying/for-a-fella-of-a-certain-income-and-accumulated-wealth in which to participate?

I don't know your finances -- none of my business -- and I'm in no position to tell you what toys to buy. But it seems to me that you're attempting to balance two impulses you might just as well separate to make things clear. Let's call them spending on you and spending on others.

If you want to spend 2k on yourself, for fun, and feel that you can afford to drop 2k, no problem, and that you'll derive more than 2k worth of pleasure from the new shimano stuff hung on your bike, then go for it. Enjoy.

If, on the other hand, you want to spend 2k in a way that's of most benefit to others . . . well, if the bike shop is a going concern, with a store front, workshop, employees, insurance, etc., and 2k worth of shimano bits is not, of course 2k in their pockets, as they'll have to order things, pay for them, etc., etc., then it seems to me (a) that, sure, it's a nice sale, but really, your purchase can make only the most marginal and fleeting difference to the survival of the bike shop and (b) REALLY? A fekkin bike shop? I like bike shops. I've got some pals involved in bike shops. And I cannot, for the life of me, get my head around the idea that you think this would be the way your 2k could buy the most happiness (or alleviate the most suffering) for others. No way. Not close. And looking at it as participation in a wave of stimulative consumer spending doesn't begin to help.

Sandy

03-08-2009, 11:31 PM

I lap the local road tracks faster in a showstock neon sport than more than 90% of the Porsche club in their 911's, Boxters and Caymen... It's not about the car.

I have no doubt that you are absolutely correct. I never said it was about the car. On the other hand, you couldn't keep close to a Cayman S if the driver was your equivalent.

I hope that you realize that someone without your abilities is able to still enjoy immensely a car like a Cayman S because the refined balance between steering/road feel, engine, braking, suspension, weight distribution, and car rigidity tanslates into a car in which there is excellent translation of driver input into very predictable superbly controlled behavior. The car does precisely what you tell it to in a most refined way.

Why buy a Kirk, Serotta, Kellogg, or a Bedford unless you are a racer dude or dudette? It is the rider not the bike, isn't it? Why have a Joe Bell paint it? It is the rider isn't it? Why not just tig weld it- no reason to use lugs or filet braze it. It is the rider isn't it? If you can't ride it at the highest of levels, then does that mean it is not worth it?

Your statements about it is the driver is no more accurate than it is the rider (cyclist). We all know that. It is quite obvious. What is also obvious to me is that a more refined, more attractive, better built car or bike provides more pleasure for the person who uses it. Why always say what you say?? Why not say what I just said sometimes?

Minimum time around the track and max average speed on a ride is not what it is all about. A sophisticated, superbly balanced, well built, refined, and beautiful car or bike generates more pleasure because of the totality of its assets,that being true whether I can ride my bike or drive my car as fast as either one of you.....which I can safely say, I cannot.

It is not the bike or the car or the rider or the driver....It is the pleasure/enjoyment/health benefits that one receives.

I also know that a better rider could enjoy the bike more just as a better driver could enjoy the car more, but the "It is not about the car" and "It is not about the bike" are true only at a basic level. It is certainly is also not all about the rider or the driver either.

Sandy

Ti Designs

03-09-2009, 12:42 AM

I have no doubt that you are absolutely correct. I never said it was about the car. On the other hand, you couldn't keep close to a Cayman S if the driver was your equivalent.

Parked in front of my rusting yellow '88 Honda CRX is my black CRX race car. It's got one seat, no interior to speak of, a roll cage, race rubber and about three times the power out of a turbo + NOS motor. The car's entertainment system is the pedal on the far right side. Yes, I know what it's like to drive a car that makes you smile, even when it's at the posted speed limit.

That said, I can still take a step back and look at the bigger picture. Balancing out the car's performance with the driver's ability makes a lot of sence to me. The best driver's skills are wasted on a car that doesn't run while a true high performance car is a danger to a driver without skills. There were a number of 930s sold in the US, yet you never see any of them. Why? Because the people who could afford them never bothered to learn how to drive - why should they, they can BUY performance. Then they get into trouble, get into the brakes, swap ends and back their car into what they were trying to avoid. It makes no sense.

Look at it this way, let's assign a value to both performance of the car or bike and a value to the skill of the driver or rider. We'll use a scale from 1 to 10. Let's say you have a driver without any skill (1) driving the best car in the world (10), multiply them together and you have a resulting value of 10. Do the same thing with the best driver (10) and a 2CV with a blown head gasket (1) and you still get a resulting value of 10. Now put an average driver (5) into an average car and you get 25. But here's the thing, these aren't linear scales. Every street car sold these days has a certain amount of understeer to pass the safety standards (they want cars to brake in a straight line) so the best you're going to see is around an 8, while the worst car sold today is probably around a 4. It probably costs $30,000 to go from 7 to 8. In bikes it's harder to assign numbers 'cause there are lots of elements that really don't add performance, such as custom carved lugs. But talking strictly performance the range is somewhat narrow there too. If we ignore department store bikes and start at the Sora equipped entry level road bikes, the range is maybe from 7 to 10 with a $5000 premium paid to get from 9.8 to 10. When you start looking at the numbers it becomes all too clear that the wise investment is in the driver or rider. I'll never understand why people resist this as they do. A $2500 investment in performance driving school is going to do more for the combination of driver/car than ten times that spent on the car. What's more, you don't give it back when the lease is up. I can say without a doubt that the formula ford school I did was an absolute blast - probably more so than writting a bigger check for the car. My time spent ice racing means I never have to worry about getting stuck in the snow, I love driving in the snow! There's no down side to having skills...

Some people on this forum have a habit of forgetting the driver or the rider and focusing only on the car or bike. Unless it's just a work of art, it doesn't work that way. I got to ride with Dave at the almost-open house last year, we see things the same. The bike isn't a work of art - and his bike really IS a work of art. But just the same, while we were waiting at the top of the hill for all the guys with the carbon bikes to get there, he found a few little trails and took it off road, 'cause that's what he likes to do. Having the skill and the bike means he can enjoy it that much more...

Ray

03-09-2009, 04:08 AM

I also know that a better rider could enjoy the bike more just as a better driver could enjoy the car more....
I wouldn't even say that Sandy - I think you were on the right track before. A better rider/driver may be able to come closer to using the full capabilities of the bike/car in question, might be able to push it closer to its limits, and appreciate it in a way that a lesser rider/driver wouldn't, but that doesn't BEGIN to mean that they'd enjoy it more. I defy ANYone to ENJOY my bike more than I do. Or, back when I was into cars, the semi-hot car I had at the time. I don't think these things can be objectively quantified, but they don't need to be. Subjectively (which is the world we live in when enjoying things), no friggin' WAY!

-Ray

goonster

03-09-2009, 04:18 AM

A wheel on each corner and made in germany...

The Cayman is not made in Germany.

93legendti

03-09-2009, 05:06 AM

I am surprised that no one has said "buy American"...

William

03-09-2009, 05:14 AM

I personally would probably use what I had if it was in good condition. You might want to follow Smiley and use what you have until the next generation comes out since the current Shimano offering isn�t really �better� than what you currently have, just newer. As far as the Cayman? Little much IMO, but you do what you feel is right for you James.

William

Climb01742

03-09-2009, 05:35 AM

As far as the Cayman? Little much IMO, but you do what you feel is right for you James.

William

i just got a really thoughtful PM from louis. and william, your two words "little much" also hit home as true.

for me anyway, when it comes to cars, it's really hard to separate what is need-driven and what is ego-driven. and i gotta cop to the ego thing about porsches. the mrs and i had a great talk last night. (isn't one definition of "love" that it's someone you can have a really honest talk with and admit your flaws or less than noble instincts and not worry about being judged?)

anyway, it looks like a mini. what i_really_want is just some more fun when i drive. i love driving. a twisty road is a playground for me. the last 6 years i've driven practical family vehicles. time for some fun...that is also semi-practical. and as much as my ego would like a porsche, the financial part of my brain -- which sadly is too small too often -- says (no, knows) that this economy isn't the right time to spend anymore than you have to. and the extra dough still in my bank account will feel more comforting than a cayman in the barn.

growing up is a b!tch. :beer:

thank you to everyone for their thoughts. i think the members of this forum are a special bunch.

MarleyMon

03-09-2009, 05:47 AM

I am surprised that no one has said "buy American"...
I suggested SRAM - does that count? :)

Climb - what about the bike components?

William

03-09-2009, 06:11 AM

i just got a really thoughtful PM from louis. and william, your two words "little much" also hit home as true.

for me anyway, when it comes to cars, it's really hard to separate what is need-driven and what is ego-driven. and i gotta cop to the ego thing about porsches. the mrs and i had a great talk last night. (isn't one definition of "love" that it's someone you can have a really honest talk with and admit your flaws or less than noble instincts and not worry about being judged?)

anyway, it looks like a mini. what i_really_want is just some more fun when i drive. i love driving. a twisty road is a playground for me. the last 6 years i've driven practical family vehicles. time for some fun...that is also semi-practical....

We stopped and looked at some Mini's this weekend. Mrs William is next in line for a vehicle and she wants a red mini with rally stripes. maybe a Clubman, they have a little more room. Seems like a practical compromise between fun and economical. I don't think you can go wrong with a Mini James. :cool:

William

RPS

03-09-2009, 06:24 AM

and as much as my ego would like a porsche, the financial part of my brain -- which sadly is too small too often -- says (no, knows) that this economy isn't the right time to spend anymore than you have to. and the extra dough still in my bank account will feel more comforting than a cayman in the barn.

growing up is a b!tch. :beer: A quick look at this morning's futures supports your concern.

andy mac

03-09-2009, 06:56 AM

Ray

03-09-2009, 07:17 AM

slightly OT but i feel like with a car like an m3 or porsche you really have to drive them hard to engage. and that ain't easy these days.

the closest i've ever felt to fun, exciting, driving was in a tiny, crappy 1.2 litre stick shift rental in italy scrapping with the locals, wringing through the gears, wrestling around the bends. 60 miles an hours felt like 130 in an m3!! felt like an f1 race.

:beer:
Good point - I think a Porsche, as nice as they are, is mostly overkill for the kinds of roads you'd be able to TRY to enjoy it on around here. If I had your predicament and decided to spend the bigger bucks associated with a Porsche AND I had a barn rather than a two-car garage in a condo, I'd get an econobox AND a Miata or something similar. Maybe even a USED Miata. Probably still gets you in at less than a Cayman and you'd have a very practical car for commuting, hauling bikes, road trips, etc. And you'd have that fun little sports car that you COULD come close to maxing out on twisty little east coast farm roads for the occasional weekend fun and games.

I did something similar once when I was young and stupid. I had a '79 Civic (this was in '80, IIRC) and I got a 4-wheeler jones going. Wanted to trade in the Civic and get one of the new little Toyota 4-WD trucks. Thought about it, priced it out, but then eventually kept the Civic and bought a beat-up old 1968 Landcruiser for about $600. I had a big empty dirt lot behind the apartment I was living in, so storage wasn't an issue. I beat the crap out of that Landcruiser for a couple of years on weekends, and kept using the Civic for about 90% of my driving. After a couple of years, the 4-WD jones was out of my system and the Landcruiser died, so I sold it for junk and moved on. Nothing lost!

But if you've decided to be prudent instead.... :cool:

-Ray

Sandy

03-09-2009, 07:18 AM

i just got a really thoughtful PM from louis. and william, your two words "little much" also hit home as true.

for me anyway, when it comes to cars, it's really hard to separate what is need-driven and what is ego-driven. and i gotta cop to the ego thing about porsches. the mrs and i had a great talk last night. (isn't one definition of "love" that it's someone you can have a really honest talk with and admit your flaws or less than noble instincts and not worry about being judged?)

anyway, it looks like a mini. what i_really_want is just some more fun when i drive. i love driving. a twisty road is a playground for me. the last 6 years i've driven practical family vehicles. time for some fun...that is also semi-practical. and as much as my ego would like a porsche, the financial part of my brain -- which sadly is too small too often -- says (no, knows) that this economy isn't the right time to spend anymore than you have to. and the extra dough still in my bank account will feel more comforting than a cayman in the barn.

growing up is a b!tch. :beer:

thank you to everyone for their thoughts. i think the members of this forum are a special bunch.

Lots of people buy Porsches for reasons totally unrelated to ego. Just like they buy Kirks or Zancs.

Sandy

Sandy

03-09-2009, 07:31 AM

Parked in front of my rusting yellow '88 Honda CRX is my black CRX race car. It's got one seat, no interior to speak of, a roll cage, race rubber and about three times the power out of a turbo + NOS motor. The car's entertainment system is the pedal on the far right side. Yes, I know what it's like to drive a car that makes you smile, even when it's at the posted speed limit.

That said, I can still take a step back and look at the bigger picture. Balancing out the car's performance with the driver's ability makes a lot of sence to me. The best driver's skills are wasted on a car that doesn't run while a true high performance car is a danger to a driver without skills. There were a number of 930s sold in the US, yet you never see any of them. Why? Because the people who could afford them never bothered to learn how to drive - why should they, they can BUY performance. Then they get into trouble, get into the brakes, swap ends and back their car into what they were trying to avoid. It makes no sense.

Look at it this way, let's assign a value to both performance of the car or bike and a value to the skill of the driver or rider. We'll use a scale from 1 to 10. Let's say you have a driver without any skill (1) driving the best car in the world (10), multiply them together and you have a resulting value of 10. Do the same thing with the best driver (10) and a 2CV with a blown head gasket (1) and you still get a resulting value of 10. Now put an average driver (5) into an average car and you get 25. But here's the thing, these aren't linear scales. Every street car sold these days has a certain amount of understeer to pass the safety standards (they want cars to brake in a straight line) so the best you're going to see is around an 8, while the worst car sold today is probably around a 4. It probably costs $30,000 to go from 7 to 8. In bikes it's harder to assign numbers 'cause there are lots of elements that really don't add performance, such as custom carved lugs. But talking strictly performance the range is somewhat narrow there too. If we ignore department store bikes and start at the Sora equipped entry level road bikes, the range is maybe from 7 to 10 with a $5000 premium paid to get from 9.8 to 10. When you start looking at the numbers it becomes all too clear that the wise investment is in the driver or rider. I'll never understand why people resist this as they do. A $2500 investment in performance driving school is going to do more for the combination of driver/car than ten times that spent on the car. What's more, you don't give it back when the lease is up. I can say without a doubt that the formula ford school I did was an absolute blast - probably more so than writting a bigger check for the car. My time spent ice racing means I never have to worry about getting stuck in the snow, I love driving in the snow! There's no down side to having skills...

Some people on this forum have a habit of forgetting the driver or the rider and focusing only on the car or bike. Unless it's just a work of art, it doesn't work that way. I got to ride with Dave at the almost-open house last year, we see things the same. The bike isn't a work of art - and his bike really IS a work of art. But just the same, while we were waiting at the top of the hill for all the guys with the carbon bikes to get there, he found a few little trails and took it off road, 'cause that's what he likes to do. Having the skill and the bike means he can enjoy it that much more...

Lots of logic. Lots of common sense in what you say. I know that I should take a course in driving my car- any car- as it makes you safer and probably helps you enjoy the car a little more. Just like it is better to spend money on a cycling coach and less on a bike. However, that does not mean that a driver or a cyclist cannot totally enjoy and appreciate whatever he chooses to ride or drive. It is not all about the driver or all about the rider. Ray makes a lot of sense in what he says too.

Sandy

William

03-09-2009, 07:41 AM

Lots of people buy Porsches for reasons totally unrelated to ego. Just like they buy Kirks or Zancs.

Sandy

I wasn�t really bringing ego into it. In my opinion (IMO), the price to use ratio doesn�t do it for me. I could have just as much fun in a car that costs far less. Just as I wouldn�t pay the $$$ for a Meivici, I have just as much fun and performance from my Zanc for a lot less. But I also won�t tell someone to not buy something if they really want it. Just as I remember you�ve commented in the past that you wouldn�t pay for a Meivici �.I didn�t chalk that up to an �ego� thing.

I stand by what I said: �As far as the Cayman? Little much IMO, but you do what you feel is right for you James.�

William

avalonracing

03-09-2009, 07:52 AM

Sports cars are fun. I recently thought about trading in my sharp handling Mercedes C230 Kompressor for a Honda S2000. The 230 is a blast to drive and cruises down the highway quite well but is a little underpowered for hardcore sporting around (the power is more than fine in the real world). But when I though about it I already have a Honda VFR 800 Interceptor motorcycle. My point? Screw the $60K plus sports cars. Want fun and performance spend $5K on good used bike, another 1500 for gear and it is all the performance you can handle.

About the group: If the 7900 is going to make you enjoy riding more which is good for your health, that is a good long term investment. Pass on the 7800 to someone else who will enjoy cycling more and because of that stay healthier which is a good investment in the economy in that they'll have a longer income and tax producing life. Simple to rationalize, no? :D

David Kirk

03-09-2009, 07:58 AM

I have no doubt that you are absolutely correct. I never said it was about the car. On the other hand, you couldn't keep close to a Cayman S if the driver was your equivalent.

I hope that you realize that someone without your abilities is able to still enjoy immensely a car like a Cayman S because the refined balance between steering/road feel, engine, braking, suspension, weight distribution, and car rigidity tanslates into a car in which there is excellent translation of driver input into very predictable superbly controlled behavior. The car does precisely what you tell it to in a most refined way.

Why buy a Kirk, Serotta, Kellogg, or a Bedford unless you are a racer dude or dudette? It is the rider not the bike, isn't it? Why have a Joe Bell paint it? It is the rider isn't it? Why not just tig weld it- no reason to use lugs or filet braze it. It is the rider isn't it? If you can't ride it at the highest of levels, then does that mean it is not worth it?

Your statements about it is the driver is no more accurate than it is the rider (cyclist). We all know that. It is quite obvious. What is also obvious to me is that a more refined, more attractive, better built car or bike provides more pleasure for the person who uses it. Why always say what you say?? Why not say what I just said sometimes?

Minimum time around the track and max average speed on a ride is not what it is all about. A sophisticated, superbly balanced, well built, refined, and beautiful car or bike generates more pleasure because of the totality of its assets,that being true whether I can ride my bike or drive my car as fast as either one of you.....which I can safely say, I cannot.

It is not the bike or the car or the rider or the driver....It is the pleasure/enjoyment/health benefits that one receives.

I also know that a better rider could enjoy the bike more just as a better driver could enjoy the car more, but the "It is not about the car" and "It is not about the bike" are true only at a basic level. It is certainly is also not all about the rider or the driver either.

Sandy

Good Morning Sandy,

I don't disagree with you at all. I buy and own stuff that I'll never use to it's potential just because I enjoy it. My skills don't match the goods.

My intent certainly wasn't to say that unless you can drive a car to it's potential you shouldn't own it. If that was the case not many high end cars/bikes/cameras/skis/skateboards....... etc would be made and sold.

My point in agreeing with Ti-man was to say that buying the gear won't make you fast. It seems like lots of high end stuff is made and sold because folks have a feeling that by buying it they will become a better driver/rider/cook....etc. I see the skills and the gear as being separate things. Want to have fun with a high end car? If so buy one. Want to become a good driver? Take a driving course. The two things compliment one another but in my view do not rely on each other.

FWIW my guess is that you are better at driving than you think you are.

Stay well,

dave