Tuesday, November 25, 2008

An old coat.

I've mentioned before how familiar this business climate feels to me. It's like finding an old but cosy coat in the back of the closet that you used to wear all the time, but which you replaced with a shiny new one. This old coat isn't so bad, you think. Comfortable is probably the wrong word, but 'familiar' works.

When I first saw the extent of the 'growth bubble' in Bend, and sat down and worked out the math, it looked extremely serious. But it was a huge economy, I told myself, so maybe it won't be as bad as I think it will be.

Nevermind that I've always had a theory that a bubble is a bubble is a bubble, whether it's sports cards or comics or Magic or Pokemon or Beanie Babies or Pogs.....or houses and businesses. Different in particulars, but eerily similar in overall ramifications.

So...the fact that it's every bit as bad as I first thought, or worse, doesn't totally surprise me. I had already prepared myself.

When I trumpet my experience, it's not to say that I know more than other people or other businesses -- it's to say, I know more than My Former Self. That is, I've learned not to repeat the same mistakes that I made then.

I have a tendency to underestimate problems, to believe the 'experts', to think that if I'm the only one feeling it but everyone else says they aren't that I'm wrong, to believe I can spend my way out of trouble by buying good stuff, that I can go into debt short term and pay it back later, that it will turn around much sooner than it does, that my suppliers and landlords will make concessions because of the slow business, to believe that my customers will stay firm no matter what, and so on and so on.

But, because I've been through this so many times before, while I may still feel denial and defiance and anger and finally resignation, I cycle through the phases very fast.

Years of dealing with this kind of thing has made the responses educated instead of guesses. Believe me, I've tried everything to reverse a burst bubble, and nothing works.

It's like trying to change the weather.

The business climate has changed, and all you can do is search the back of the closet for that old, warm coat and slog through the storm.

And it's O.K.


Anonymous said...

Hell today they reported that Jefferson & Crook already have +10% unemployment. So in the defined economic sense the depression is already here.

Spring of 2009, we'll see USA average un-employment of +10%, but given that our 'experts' still are incapable of calling our Recession since May of 2007 a Recession, it will be 2018 before the 2009 Depression is called a depression.

Most businesses I known have been in free fall since May of 2007. Certainly people did what they could do to keep their employees through this xmas, that's almost 18 months, most CPA's have been saying that 2009, would turn-around, so folks dipped into 401k's to keep their retail open, and dipped into cards. Given that the US has created $10 Trillion of FED-PAPER in the past 3-6 months just to prop up the banks, its fairly clear that dumping money is not going to bring a cheery 2009.

For ten long years the US public has had a NEGATIVE saving's rate, first time in history. A period of austerity will come whether people of power want it or not.

Unemployment, and tons of personal consumer debt will cause people to cut back, and the layoff's are coming big time, as orders have plummeted this fall, in a time that is normally the best of the year for manufacturing.

Regarding today's Jefferson & Crook at +10%, so what they got all these people to move there, they both have +30 years of crap-shack inventory. There are NO jobs, other than government jobs, and subsistence ranching. These places will revert to what they have always been.

Here in BEND, most retirees who moved here post 1998 to retire, and having already lost 1/2 their nest on stocks, are now sitting pretty on their BOND's, soon the bond's will plummet, and almost all of Bend's new retirees will be BROKE. Then ton's of oldsters will be looking for jobs at Trader-Joes.

We brought 50k hungry mouths to the Bend area in the last ten years, and there are no jobs or food for them.

Merry Xmas.

Enjoy your turkey, there may not be one next xgiv.

Anonymous said...

A few years ago there was a movie about an 'old shoe' running for president, and a make believe war. I think it was called 'wag the dog'?

Then there have been assorted old underwear and socks that have also been very good role models.

I think all in all its probably a good idea to put on that 'old coat'.

You don't want to be displaying explicit wealth in the New Bend, I mean AssBend ( pronounced Aspen ).