Bicycle makers offer some clues about inflation

[lavi]

Originally Posted by Kirk007

What?!? Wait, you mean my bicycle collection doesn't count as appreciable assets in my retirement portfolio?

Hehe. Your bikes actually do count as appreciable assets.

[Coffee Rider]

Originally Posted by ntb1001

I’ve seen it too.

Different rules apply depend on on where you are, but I’ve seen bankrupt people get credit, cards, mortgages, car loans as little as 12 months after bankruptcy, meanwhile people who try to pay and have consumer proposals take years.


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People who just declared bankruptcy aren't seen as that bad a credit risk relative to what we'd expect since the lenders know they can't do it again for a number (that I cannot immediately recall) years.

[mtechnica]

Originally Posted by dustyrider

In this world of marginal gains and incremental improvements, do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

Look at the new selle italia model X green saddle.

As for bikes, look at state bicycle. They're selling pretty decent bikes for cheap. Nobody here is going to be seen on a $400 road bike though. I would argue these bikes are far better than a dollar inflation accounted bike of the same price from 20 years ago.

[Mark McM]

Originally Posted by Coffee Rider

People who just declared bankruptcy aren't seen as that bad a credit risk relative to what we'd expect since the lenders know they can't do it again for a number (that I cannot immediately recall) years.

Or maybe they figure they can sell the debt as some type of financial derivatives (like the way sub-prime mortgages were turned into financial derivatives, prior to the 2008 financial melt-down)?

[EB]

Originally Posted by ripvanrando

Enve wheelsets are now $3000. Just sayin.....

Except for the really nice ones that are $1600.

[BdaGhisallo]

Originally Posted by Mark McM

Or maybe they figure they can sell the debt as some type of financial derivatives (like the way sub-prime mortgages were turned into financial derivatives, prior to the 2008 financial melt-down)?

Mortgages were sliced and diced into derivatives long before 2008.

[mhespenheide]

Originally Posted by ripvanrando

Enve wheelsets are now $3000. Just sayin.....

Man, there are halo one-piece handlebars and stems that cost more than I could put together an entire (nice enough) bike for...!

[Mark McM]

Originally Posted by BdaGhisallo

Mortgages were sliced and diced into derivatives long before 2008.

Right. But the practice of slicing and dicing of mortgages made it possible to "hide" many sub-prime mortgages, and this was partially implicated in the financial crisis. Why make sure your loan customers actually have the ability to pay them back, if you can reap the origination fees and then pass off the bad debts to someone else?

[sjbraun]

All of us have lived above our means, thanks to cheap labor. Whether the labor is performed in Taiwan, Malaysia or Topeka, its been cheap and consumers have benefited from lower overall costs. If full time Walmart workers qualify for food stamps, then something isn't right.
As employers need to increase wages, then costs to consumers will rise. We rail against price increases and call it inflation (another demon term like socialism,) but maybe we're just seeing the correction of unfair labor practices.

[BdaGhisallo]

Originally Posted by Mark McM

Right. But the practice of slicing and dicing of mortgages made it possible to "hide" many sub-prime mortgages, and this was partially implicated in the financial crisis. Why make sure your loan customers actually have the ability to pay them back, if you can reap the origination fees and then pass off the bad debts to someone else?

You're not wrong but there were a lot of factors precipitating this, and a great number of them were perverse incentives brought about by bad Govt policies and poor decisions by credit rating agencies.

Lower quality mortgages had long been chopped up and turned into derivatives but the collective decision to treat collateralized mortgage obligations made up of low quality BBB mortgages as AA and higher rated securities was a ticking time bomb. And government policies that basically forced banks to make mortgages to low credit borrowers a significant portion of their loan books, lest they not get good grades on their annual reviews from their regulator, was another factor that contributed mightily to the blow up.

[seanile]

Originally Posted by mhespenheide

Going back to 2019, so that the numbers aren't affected by the pandemic and its economic fallout, there were just under 775,000 personal bankruptcies in the United States out of a population of 328,300,000. So the bankruptcy rate was a little under one-quarter of one percent.

That hardly seems like a widespread issue corrupting all society.

my rebuttal would be that people can afford to get by until they retire.
then they're screwed.
Baby Boomers have an average of $152,000 saved for retirement......Research by the Insured Retirement Institute (IRI) also suggests trouble for many retiring Boomers. IRI found that 45% have no retirement savings. Out of the 55% who do, 28% have less than $100,000. This suggests that approximately half of the retirees are, or will be, living off of their Social Security benefits.

[benb]

The bike companies need to shorten their supply chains and bring some of their manufacturing back to the US.

Of course an aluminum bike with 105 costs the same today it did 10 years ago or just a little more, the bike companies haven't been putting any R&D into making their manufacturing more efficient.

They outsourced it all, and every year the employees in the outsourced manufacturing plant get paid a little bit more because the country the factory in has had huge growth in it's economy and standard of living over the last 10, 15, 20 years.

Making bike frames in the US again would be child's play compared to trying bring semiconductor manufacturing back. And the semiconductor industry seems like it's making more of an effort to do so.

I just bought my son a new aluminum hardtail MTB, $700. It's pretty freaking nice compared to the MTB I bought 20 years ago for $500. Hydro discs, much better fork, much better new geometry, better shifting, lockout on the fork, better tires.

[Ralph]

Originally Posted by benb

The bike companies need to shorten their supply chains and bring some of their manufacturing back to the US.

Of course an aluminum bike with 105 costs the same today it did 10 years ago or just a little more, the bike companies haven't been putting any R&D into making their manufacturing more efficient.

They outsourced it all, and every year the employees in the outsourced manufacturing plant get paid a little bit more because the country the factory in has had huge growth in it's economy and standard of living over the last 10, 15, 20 years.

Making bike frames in the US again would be child's play compared to trying bring semiconductor manufacturing back. And the semiconductor industry seems like it's making more of an effort to do so.

I just bought my son a new aluminum hardtail MTB, $700. It's pretty freaking nice compared to the MTB I bought 20 years ago for $500. Hydro discs, much better fork, much better new geometry, better shifting, lockout on the fork, better tires.

Part of the rising cost of bikes is the technology that goes in them. That 10 year old 105 CAAD 10 probably didn't have Electric shift or hydraulic disk brakes. Or fancy carbon wheels.

[benb]

None of those things are on the lower end bikes though. Someone made the point you can still buy a bike equivalent to what was competitive 15-20 years ago if you want to.

Sure they can use the excuse they've implemented whiz bang new features on high end bikes.

But those bikes are a small sliver of sales.

A lot of the mass market stuff is not very different from years ago, the main big differences are proliferation of disc brakes and obviously the whole eBike thing.

Unlike high end road bikes with electric shifting & carbon everything the masses do seem to really like electric assist in their bikes.

Most of the R&D just appears to have gone into high end features.