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

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Submitted by jg on December 7, 2006 - 2:03pm

This is premature, because the jury is still WAY out on whether a recession/depression will happen (but I've placed my bet that it will). Per my read of the data, the silliness that we see today -- ridiculous home prices, fancy cars everywhere -- began in the early '80s, when savings rates started going down and consumption rates started going up. If we go into a protracted economic slowdown, what things that we see today will disappear tomorrow?

To start things, I think we'll see the following disappear:

Pet cemeteries and mobile pet grooming services
Widespread ownership of Hummer H2s (H1s are already gone)
Steep annual increases in college tuition

Submitted by sdcellar on December 7, 2006 - 2:30pm.

I'm hoping colored stamped concrete.

but I'm guessing you're looking for things outside of the housing sector. Okay, how about all manner and form of Cadillac (spare maybe a few antique convertibles)?

Submitted by PerryChase on December 7, 2006 - 3:23pm.

What's wrong with colored stamped concrete. Would you rather have the plain grey concrete?

People will learn how to cook again. They'll stay home and have healthy meals and loose weight. That would be a positive result of the crash.

Submitted by sdcellar on December 7, 2006 - 3:29pm.

I actually like colored concrete, but there are a lot of bad stamp jobs out there (in my opinion).

On the cooking thing, then I guess you're saying this would be the end of Rubios since they've been on the downward slide anyway (and *think* they're now competing with sitdown Mexican restaurants to boot). So sad...

Submitted by PerryChase on December 7, 2006 - 3:59pm.

When I think of housing construction today, I'm always reminded of the Romans at the height of their Empire. Shoddy contruction covered with faux painting or marble fascia. The Hollywood Regency style so prevalent everywhere in California is like some nightmarish imitation of the Roman style.

No more weird mix of Spanish, Roman, French design.
I'm hoping for a return of the truly American modern architecture and style. Resolution: 4 Architecture

Submitted by PerryChase on December 7, 2006 - 4:02pm.

Death to the overstuffed chair.
result of real estate excess

Submitted by lindismith on December 7, 2006 - 4:39pm.

Love those chairs! not.

Perry, we have the same tastes. Do you get Dwell magazine?

I'm hoping we have an end to Britney, Paris, and Lindsay. "They just need to go away." (Ok I stole that from Chris Cantore on 91x this morning.)

Submitted by powayseller on December 7, 2006 - 5:50pm.

After the credit bubble bursts, and folks have to live off their paychecks, instead off the money created by the Fed printing presses and recycled from overseas, could we see a change in lifestyle?

Frivolous services will disappear
* nail salons
* half the coffee shops (can't people pour a pot of water into a carafe - is that so difficult?)
* hiring gardeners or cleaning people because the man and woman of the house are too lazy; remember when it was the neighborhood teenager who mowed the lawn?
* car washes at every 1/2 mile (we used to always wash our own cars back in the days)

Work
* teenagers will work again, instead of indulging in activities, and enrichment and volunteer work just to look good on a resume
* maybe Americans will be sick and tired of the free trade which is causing our living standard to go down while "theirs" goes up; maybe "made in America" will be more important than getting something cheaper

The "big" things will be a turn-off. Think Suburbans, big houses, big ovens, big chairs like you pictured above, big grates on big Viking ranges (who really needs 6 burners?).

During the adjustment, look for more suicide, drug abuse, crime.

Submitted by FormerSanDiegan on December 8, 2006 - 9:59am.

Housing blogs will also be gone.

Two reasons:

1. The housing bubble will have already deflated, and the topic will be boring and stale.

2. A common belief will arise that once-in-a-lifetime changes in economic and demographic conditions will result in the conclusion that owning real estate is a bad idea once-and-for all.

Submitted by barnaby33 on December 8, 2006 - 10:32am.

Bud/Miller/Coors will sell alot more beer. Sad to say but its probably true.

People will NOT cook at home more, at least not any healthier.

Sales of BMW and Mercedes entry level cars will go way down, but the 7-series/S-class will only dip.

Teenagers will not work harder, they will give up more hope (most of them anyway.) Where that idea came from I have no clue. As a corollary though, sales of the PS3 will probably not save Sony.

Hummers & granite countertops will be sooooo pre-bubble pop.

Debt will be the new fat, so JG I recommend a startup for financial lap bands!

People will in general get on with their lives much poorer and look for the next big thing, say healthcare services!

Josh

Submitted by sdrealtor on December 8, 2006 - 10:36am.

Joe's Sewing Machine Repairs, Mortgage Loans and Real Estate operations in every strip mall around SD. They are already vanishing on a daily basis.

Submitted by poorgradstudent on December 8, 2006 - 11:28am.

Some interesting ideas here, some I agree with, some I partially agree and would love to see, and others I would be surprised to see.

People will cut back on "luxuries" and continue buying "necessities". Of course, my necessity may not be the same as yours.

A lot of people view their $4 cup of coffee as a necessity, to the point of rearranging other spending to keep getting it. A lot of women view nail services as essential, although there could be a swing towards do it yourself. The nail industry is already pretty cheap, which could help it (relatively cheap) or hurt it (doesn't have much leeway to price adjust downward)

Teenagers not working in California is a cultural thing that I don't see changing. For one thing, teenage employment is generally highest in good times, and lowest in weak job markets. Buisinesses would generally rather hire young adults over teenagers. In a weaker job market wages are lower, giving teens less incentive to work rather than study, play sports, or video games.

I totally agree with an increase in beer consumption, especially cheap beer. I should buy some BUD stock soon...

I think we'll see a lot less "junk" purchased... fad items, novelties, expensive gifts that people may want but not really need. People will keep buying flat screen televisions as the price of the technology keeps falling.

People that get laid off will dine out a lot less. People that keep their jobs probably won't change much.

Submitted by mixxalot on December 8, 2006 - 11:29am.

Cooking is best for health and pocketbook.

Given that most restaurants employ a lot of legal/illegal mexicans to cook food in grease for overpriced low quality, and tha I actually enjoy fresh organic food and need to cut costs, I have been cooking meals 99% of the time.

Example:

A nice 4 egg breakfast omelet and bagel with latte can run between $8-15 in a breakfast place.

Cost to make a fresh omelet with good latte home made:

$2 so a savings of at least 6 bucks a day!

Not to mention it takes me a whole 3 minutes to cook the omelet and make the latte in my espresso machine. Less time than waiting half hour in line at local Starbucks!

I need to save for living til the next job comes along and also for future home when prices actually come down to earth here in sandy eggo.

Submitted by BikeRider on December 8, 2006 - 11:44am.

I liked Dennis Miller's comment regarding gas guzzling SUVs. He said that America won't do anything about energy efficient cars until oil is gone, so he's driving a gas guzzler to speed up the process.

Hard to say what might change...
1. You won't see 52" flat screen plasma TV's being bought.
2. People won't have the money to waste on cell phones.
3. Won't be buying cable TV.
4. Won't eat out so much.

The list could go on and on, depending on how bad it got. Think about it really, Americans buy so much crap that they could live without. Somebody thinks up something, a marketing department thinks up a way to may people feel they need it and there you go.... everyone is walking around with a cellphone that takes pictures. You could take the picture with a standard digital camera, then send it over for no extra charge than what you pay for internet, but no, we have to have everything right now. So, let's pay extra to send some stupid picture to someone that would rather not be bothered using our cellphone. What did Jay Leno say about the cellphone, Ipod, picture phone thingy.... can you say car accident?

I was listening to Dave Ramsey last night driving home. He was remarking on itunes sales. Some woman had written into somewhere that she called off a wedding when she found out that her finance had 40K in credit card debt and that the debt was from downloading itunes,buying DVDs and CDs. There was 8K worth of itunes and this guy had a 45K a year salary. Can you say stupid?

Submitted by lindismith on December 8, 2006 - 12:23pm.

Yeah, the consumerism here is completely out of control. I have friends with credit card debt up to their eyeballs. Literally, they make close to six figures, and cannot go on a vacation, because they have no extra money. And they seem unable to stop spending. They have to have everything they see. I have one friend that has to buy something everyday. When I asked her if it was possible not to purchase something, she assured me it was, but honestly, I think she's addicted to shopping. It's her daily fix of feel-good. What a drug! What kind of life is that? It's not really living in my book. Just the time spent finding the parking to do that much shopping puts me off. Never mind the complete waste of packaging, etc. I could on and on. It's my pet peeve. As for the eating out... don't get me started.

Submitted by studenteconomist on December 8, 2006 - 12:44pm.

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

Submitted by PerryChase on December 8, 2006 - 2:38pm.

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

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

-------

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

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

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

Submitted by kewp on December 8, 2006 - 1:58pm.

NO MORE SIGN SPINNERS!!!

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

Submitted by ibjames on December 8, 2006 - 3:50pm.

this would be the new housing standard

Little houses

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

edit: I can't add a link.. so here is the url for copy/paste
http://realestate.msn.com/buying/Article...

Submitted by cassiopeia on December 8, 2006 - 5:54pm.

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

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

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

3. Ditto for gas guzzlers.

4. Christmas ornaments that cost $25.

5. Battery operated tooth brushes.

6. Brookstone.

7. 10 burner stoves for a family of four.

8. Hawaii vacations paid for with credit card debt.

9. The third car.

10.

Submitted by jg on December 8, 2006 - 11:35pm.

Great ideas!

Amen, to no more sign-spinners!

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

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

Other things that will go by the wayside:

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

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

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

Submitted by powayseller on December 8, 2006 - 11:46pm.

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

Submitted by powayseller on December 8, 2006 - 11:59pm.

I found the article. Down and Out in Bloomfield Hills

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

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

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

Submitted by masayako on December 10, 2006 - 7:11pm.

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

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

Submitted by kaycee on December 10, 2006 - 7:33pm.

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

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

Submitted by poorgradstudent on December 10, 2006 - 8:17pm.

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

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

Submitted by masayako on December 11, 2006 - 1:29am.

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

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

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

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

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

Life is all about making the right decisions.

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

Submitted by PerryChase on December 11, 2006 - 11:04pm.

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

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

Submitted by jg on December 12, 2006 - 8:36am.

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

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

Submitted by lindismith on December 12, 2006 - 8:56am.

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

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

Submitted by PerryChase on December 12, 2006 - 11:08am.

I'm also a nutrition nut and I speak from personal observation . We all know that inflammation is what causes the ageing process.

I've spent time studying Oriential medicine in Asia and I find that in their culture, the key is to be "cool" and avoid "hot" foods. It's a concept that is foreign to Westerners. Well, coffee is simply very, very "hot" and causes internal inflammation (stomach upset,etc...). Just observe people who consume coffee everyday vs. those who don't.

I won't go into details but my diet is a modified combination of Calorie Restriction, Mediteranean (sans the carb), and Asian cuisine (sans white rice), with lots of herbs/spices but no added salt, sugar or refined/processed products.

Don't get me wrong, I'm not a health evengelical. And socially, I'll eat anything. I never proselytize because people don't appreciate eating advice. Although I do have a bet going with a good buddy on his inability to loose weight(he claims he can). I'm waiting a few months to collect on my 500GB hard-drive, ha.ha ;)

Back to the economy... I think that there's been a shift in our culture in the last 20 years. People have fancier kitchens but they cook less, and if they do, it's the frozen and processed foods. I'm an observer of grocery baskets.

The chain restaurants that offer "value" (large portion), a theme and "reasonable" (but not luxury) prices will continue to do well regardless of the downturn (Starbucks, Cheesecake Factory, PF Chang, CPK, etc...) People will find money for that small escape. It's easier to get rid of the SUV than diner out.

The high-end independent restaurants will suffer.

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