We May Be Ragged and Funny...

[pstraten]

...We don't have very much money,
But we travel along, singin' our song...

Wait. No worries. Ask a conservative. Anyway "I got Madrid"

"In the mean time, in between time,
Ain't we got fun!"

Nah. Nothing to it. Ask Alan Greenspan. Ask George W.!

http://www.nytimes.com/2008/04/15/business/15retail.html?_r=1&hp=&pagewanted=all

Yeah yeah. Consider the source. Plenty of other sources to go to, though. Maybe I should check National Review (or better Hannity?) to learn just how rosy it all looks. If it doesn't look rosy, then ipso facto it's all the fault of liberals anyway....

[kevarc]

Yep, but how much of their implosions are based on flawed thinking. Expanding too fast or extending lines that leave thier plan?

[pstraten]

Good question, Kevin. And one might indeed wonder how much a "feverish" economic climate contributed to the current mortgage implosion that's now rippling across Great Britain, Ireland and Europe.

In the end, for most of us, the causes are academic. It's the consequences that we have to live with, n'c'est pas, mon ami?

[pstraten]

By the way, I don't have some sort of "big position" on this. I grew up with business--on the proceeds of a small business owned by my mother and grandmother that had been originally backed by an uncle who built and owned a small manufacturing concern. Until I went into the army, I had no idea what "working" outside a business I was part-and-parcel of would be about. No axe to grind--just an observation about economic ups and downs.

A lot of people do seem to be in denial about things though. I saw the coming problems while lots of folks (around here, e.g.) seemed to be pooh-poohing it and relying on reports that were at least 3 months, if not 6 months, out of date. Apparently they cannot smell the breath of coming rain on the wind, and will be in denial until they get still another report 3 months out of date.

[kevarc]

Let's examine a couple of companies:

Starbucks - the darling of the left, but is really a predator.

They will go in and build stores just about on top of each other. They will research the lease of a competitor to see when it is going to expire and then make an offer on the space. They really want to be the only show on the block for coffee. They will surround a little local guy and pummel him until he shuts down.

they expanded and expanded that finally their quality started to go down the tubes - MickyDee's coffee has beaten them on taste lately.

I refuse to pay what they want for a cup of coffee, I buy at small stores, usually gas stations. If you dig around, you can find one that is pretty decent. The only thing about Starbucks is you are paying for the name and to show off the cup. They try to build loyalty based on snob appeal.

A tip - get a travel mug. They screw you when you use their cup.

Footlocker - athletic shoes in general

They all carry the same shoes. When is the last time you went into any of them and found a unique shoe there? You buy on price. When is the last time you really cared if the salesperson actually knew anything about the shoes. You go in and look for what you want and the price. Period. The only thing the salesperson does is get the shoes or tell you they don't have them. IF they don't, there is usually another store a couple of minutes away. There is no really brand loyalty there.

You can point the finger about the mortgage meltdown at everyone. With money being cheap, they were knocking your door down to refinance or to buy a house.

http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm?page=0

The community reinvestment act and the Home Mortgage Disclosure Act really forced banks and other lending institutions into writing loans in situations where before they would never have gone into. Greed played into it, but again, fear of being hammered by the government or civil rights groups lawsuits, did not help the problem. To get the numbers to make everyone happy, they started lending money for mortgages to people who should have not got them. Earning were not verified and most of the paperwork is a joke.

There are always 2 sides to every issue. There were lenders out there making loans and not telling the borrowers what they needed to know. And how many of those would not have really understood what they were getting into? And there were people out there buying houses that they knew they could not really afford, but bought them anyway. How do you sort them out between the 2? Beats the hell out of me, but before the government starts throwing tons of money at it, they need to stop for a few minutes and figure out a plan to address the issue, but not where they are bailing out every Tom, Dick and Harry out there. But as we all well know, the closer it gets to election time, reasonable thought gets thrown out the window and a 3 legged camel comes out that sounds good, but is completely unworkable.

In typical fashion, they will get a bunch of "experts" who are out of touch with reality to come up with it. Just think what could be done if 30% of the people brought in to work on this actually worked for a living. But that will never happen. They will bring in a group of academics (the group furtherest out of touch with reality I have ever seen) and folks with suits that cost more than I make in a month. And then they will tell us how they will "help" us. MAkes me want to cry.

[pstraten]

Starbucks "They will go in and build stores just about on top of each other." Don't know about the rest of the west coast or elsewhere, but anyone who had spent a little time in SoCal would undoubtedly attest to that.

"I buy at small stores, usually gas stations."

And therein, as Shakespeare said, "lies the rub." It is where it all went wrong. The small retailer--businessman of any sort-- is dead on his feet. Not that I know the answer to the relentless quest for efficiency of scale. But I'm glad I'm as old as I am, because I don't really understand or much like what I think is to come.

Ah well, I'm just an old fart and suppose it will all be a brave new world when I am gone. Meanwhile I just "beat on, boats against the current, borne back ceaselessly into the past ... "

And it is certainly time for me to sign off, wondering whether I even need to sign on again (well, in this conversation, anyway...).

[rdamurphy]

Down the street from me, they're building a Starbucks in the restroom at the Starbucks!

Just for grins, go to maps.google.com, and put in your zipcode and the word Starbucks, like so: 99999 Starbucks. I got 188 hits! Seriously, though, there's a grocery store near my house that has a Starbucks inside - and there's another one in the same parking lot!

Subway practiced the same predatory scheme first, when's the last time you've seen an "independent" sandwich shop? I had a friend that owned one, when she went to renew her lease, she was told Subway had already leased it, and oh, BTW, you need to move out by the end of it...

Ever consider starting a railroad? Or a trucking company? Which is, as anyone in this business will tell you, a really stupid idea!

Of course, a lot of people will tell you that "back in the day" Walgreen's was destroying the local drug store, Montgomery Wards was killing off the General Store, and Ford, Chevy, and Chrysler were killing off the wagon makers!

Nope, I have no doubt there will be a "blip" in the economy this summer, directly caused by the propoganda pouring out of the DNC, and it will all magically cure itself early next year... When McCain takes the oath of Office!

Robert

[shadowr434]

We have more Dunkin Donuts up this way than we have starbucks but we have plenty of them too.

[Kenny1234]

C'mon Paul. Look at how all that gluttony of excess that was responsible for a Starbucks on every street corner ticked down that unemployment rate, a statistic that we are so proud about!

And some on here thought that wasnt possible and that the "Great Bush Economy" was a house of cards! Shame on them.

[chucksc]

Shouldn't you be off doing shots and beers in Pa. with Billary?

Or is that ducking sniper fire on the tarmac in Pittsburg....

After all, those bitter rednecks seeking comfort in the opiates of the people (religion and guns) in flyover country NEED the guidance of your brillant mind honed by an elite education and innate sense of self importance....

[Kenny1234]

After all, those bitter rednecks seeking comfort in the opiates of the people (religion and guns) in flyover country

I'll be damned. Those rednecks sound like Islamic extremists, hooked on the same opiates (guns and religion) of our bearded opponent.

Can I legally hunt down their madrassas (VFW clubs, St henry's church, the Rod and Gun club) to shoot them and be just about it?

[kevarc]

You can try Kenny, but we do shoot back and do not hide behind skirts. I for one would not mind lining up on you.

[Kenny1234]

Quick, slip in that Toby Keith CD so I can regain my senses!

[pstraten]

Robert,

When I was a kid, Sears Roebuck was the big villain and bugbear in my family.

Luring small manufacturers into lucrative contracts to make tools and things to be sold under the "Craftsman" brand.

Then when the small companies got to be so dependent on Sears orders, they started unilaterally dictating the prices. After all, where else are you going to sell all that stuff they got you all expanded and geared up to make?

[pmcn]

Paul S.,
Interesting point. Does not sound too far off from Wal Mart etal. plopping down a couple of blocks from main street, driving out the mom and pop stores and hooking the consumer on "falling prices".

Q) How does a small buisness compete with bulk volume?
A) Specialization.

The problem is that there is not much left out there to specialize in.

Paul