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# of businesses closing

7/6/15       
Marion Gee Member

I get anywhere from 6 to 10 notifications a week of businesses closing and auctioning off their industrial woodworking
equipment. A lot of big companies.
Is this a normal economic downturn or should I be preparing for a fiscal crash at the end of the year?

7/6/15       #2: # of businesses closing ...
Mel

Was there a point in time where less businesses were crashing/you were getting less notifications?

7/7/15       #3: # of businesses closing ...
cabinetmaker

Complacency makes it is easy to ignore impending information. The Chinese stock market has shed a quarter of it's value in the last three weeks. That hasn't really hit the radar for many of us because we are too busy watching Game of Thrones or preparing for the WoodWorking Show in Los Vegas. The economy seems really vigorous right now. Why would we care about what is happening in China or Greece? It probably won't our shores.

I think Marion is wise to keep an eye on those auction notices. I remember a time period when there were so many I wall papered the shop with them. It started to look like a fire hazard so I kept just the ones that used to make me nervous when they were intact.

My company is in a growth mode right now but we are farming box cutting rather than buying beam saws. This boom is only maybe 500 days old. A bit too soon to predict a trend.

7/7/15       #4: # of businesses closing ...
Shm Tiultz

The context is that there was a building boom that was caused by both demographics and too much money being made available until 2007.

Because of demographics and retirement, both of construction workers and of consumers, and re balancing of the over-investment the demand is lower than it was.

The next 10 yr is projected to have a good demand for carpenters, according to the BLS, but because of automation and offshoring probably not so much for cabinetmakers.
.
Beyond that though as in 2030 things are going to get real bad because of entitlements.

Oh and the stock market is going to make a big correction here as well.

7/8/15       #5: # of businesses closing ...
Larry

It's worth noting why some things happen. Chinese markets had been bid up beyond reasonable rates of return. In some ways comparable to the 1920s in the western world. Too much money and credit chasing too few opportunities. Their government will likely control the slump.

Greece, why should we really care? Their economy is tiny. Their politics have been a mess for a very long time. They need to fix their mess but likely won't. Almost impossible to backup social programs.

There is nothing I can do about our economy. I don't believe the talking heads from either party really know the future either. I'm just a long for the ride, making sure I've got a good grip.

7/8/15       #6: # of businesses closing ...
marion Gee Member

It seems like the market is trying to adjust itself from the last 20 boom years and the guys who are weathering this adjustment are the guys who chose to remain small, not do a whole lot of reinvesting in expansion equipment either to enlarge their customer base or keep a good customer.
And I guess I'm trying to get a good grasp on the true economic indicators for this industry. Can you guys reccomend a good source of current information?

I don't want to be a Chicken Little, but I would like to know if any of the sky is "getting loose" over my little peice of real estate.

7/8/15       #8: # of businesses closing ...
Larry

"Oh and the stock market is going to make a big correction here as well."

Good, that means a nice buying opportunity.

7/8/15       #9: # of businesses closing ...
Shm Tiultz

"It's worth noting why some things happen. Chinese markets had been bid up beyond reasonable rates of return. In some ways comparable to the 1920s in the western world. Too much money and credit chasing too few opportunities. Their government will likely control the slump. "

True in both cases mercantilism.

"Their government will likely control the slump."

Hopefully better than the US did in the 1930s...

"Greece, why should we really care?"

Because it could be the catalyst to undoing the EU, which is inevitable.

"Good, that means a nice buying opportunity."

Watch out for the fat tail...

7/10/15       #10: # of businesses closing ...
Melo

That's "fewer", Mel, fewer. I know English is not your first language, but work on it, okay?

7/10/15       #11: # of businesses closing ...
Larry

Looks like the Greeks blinked first. The monetary system of the EU has plenty of flaws but the biggest one is that individual governments can't inflate their way out of their financial messes.

7/10/15       #12: # of businesses closing ...
Shm Tiultz

It is true that central banks like to fix problems with inflation, but that is a short term fix. In the EU they are about to try that with their own flavor of QE, but Germany will probably put a stop to it.

The basic problem with the EU is that it the citizens of the various countries cannot vote with their feet. I.E. it is hard for the an Italian to move to Germany for a better standard of living.

This is not the case in the US, this forces states to compete to attract labor and employers/businesses. So when Calif become too onerous workers move to Texas.

This will be the eventual undoing of the EU.

I wonder if the Deutsche Mark will be the next reserve currency. When (not if) the Germans leave the EU.

7/11/15       #13: # of businesses closing ...
Amazed

The Germans tend to have a very short term memory when it comes to morality.

There was a time once when Germany got back on it's feet because countries like Greece & Spain forgave their debts.


View higher quality, full size image (785 X 638)

http://bigstory.ap.org/article/7839d0d9253f4e79b4cb7975fcc74bed/case-greece-when-it-forgave-germanys-debt

7/11/15       #14: # of businesses closing ...
Mel

"
That's "fewer", Mel, fewer. I know English is not your first language, but work on it, okay?"

HAH! Young man, that is no way to address a lady. Were you raised in a barn? Go work on your manners; they are few, and less than adequate :P

7/21/15       #15: # of businesses closing ...
Evan Member

There may be many other reasons that these businesses close. Did they recently undergo aggressive growth, only to find that they couldn't staff up to meet demand? This situation leaves a business with increased overhead without the cash flow to support it. I've found that boom times are more difficult to manage than the bust.

7/21/15       #16: # of businesses closing ...
marion Gee Member

Evan, I agree with you, but what I am seeing is a national debt that has run away, some major manufacturers closing shop after 30+ years, banks that are continually getting in trouble for dubious practices, and an economy with 80% of it's members working from paycheck to paycheck with no emergency savings, and a government that printed money to get the banks out of the last mess.
I am no doomsday prophet, but I am wondering if I need to pay attention more and to the economy and tailor my business to what I think the situation really is. Maybe not take on any new customers and put off buying new equipment a little longer. Maybe convert paper into hard assets.
Am I going off the deep end or are there others seing what I'm seeing?
I know from history that the first thing lost in an overinflated economy are jobs and pensions.

7/22/15       #17: # of businesses closing ...
ranliker

It seems to me the EU is a confederacy; and confederacies don't work.

7/22/15       #18: # of businesses closing ...
Pat Gilbert

Ranliker

Can you please explain how that is right?


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