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Can't give stuff away....

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August 09, 2008 – Comments (9)

There are things about a declining economy that can really give you a heavy heart.  Right now if you have things you want to buy and money to spend the deals are fantastic.  I've been spending.

But on the other side has been the stories about people who have put stuff in storage or who are selling things to try and make ends meet.  I have been there and done that and the memory brings back the incredible stress of that period of my life.  Well, with our move we've sold and given away tons of stuff.  We've sold things 10c on the dollar and we have other things that are perfectly good that we can't give away, like this extra barbque.  That just has to be that much harder on people that are selling things because they have to...

And I have my prelude sold.  My husband bought it brand new 19 years ago and it was only about six months old when I met my husband, so this car has fit like an old glove for a very long time.

But here is something I find interesting...  It is a reliable car.  If I didn't want something higher off the ground and a 4 wheel drive for the north and that I could move stuff and kids, I wouldn't be selling at all.  I am probably not going to be too happy if I get laid off at the end of next year, but I think it would be a fairly easy sell up north especially once I get it winterized. 

Anyway, the price I am selling it at is the same price I bought my first car  28 years ago.  I didn't have enough cash to buy it and I didn't qualify for a loan as I was under 19.  I forget if my friend's mom co-signed a loan for me or just loaned me the money, but she put conditions on my car purchase.  She wanted me to buy a car from a friend she completely trusted and considered a good guy.  Well, her friend was a swindler, imho.  He sold cars that should have gone to the junk yard and did short term mechanical tricks to make them look like they were working.  I got one car from him and it was a disaster and he traded it with me for a second disaster.  So, I had this car that stalled, spewed black smoke and it is a shame they didn't have the inspections that they require for car sales today.  That car was so dangerous.

I feel completely confident that I am selling a very mechancially sound car that will probably run with reasonable maintenance costs for the next 5 years.  If you could just store a car for use later and they didn't deteriorate just sitting there, I would do that, but cars that sit tend to run into more problems then cars that are being driven.  

Anyway, it does remind me of my second vehicle, which I consider a deal of the century.  I paid only $200 for it, it had been my boyfriend's grandpa's car.  It was a Datsun 1000, only cost $7-8 to fill the tank and I drove it relatively maintenance-free for about 5 years and then sold it for $450.   The mileage was really low, maybe 25,000 miles, when I got it.  But it looked like crap, rust everywhere.  

Anyway, 25 years from now looking back I think this young person is going to look at this car as the best vehicle deal of his life because I really do believe the car will still run great for years.

9 Comments – Post Your Own

#1) On August 09, 2008 at 1:29 PM, dwot (50.85) wrote:

Some of the things I read cause such unease...

I missed this one of Astry's back in July....

Anyone that has been reading my blog knows I am a super bear.  I anticipated the bank runs that we have seen about a year and a half ago.  These bank runs to me are highly significant but have hardly picked up the media attention they deserve.  The British one got more press than the US ones.

But, I do expect fears about where is your money safe to grow and to lead to more banks getting into trouble as people with money make moves to protect it.  I suspect some expect to be able to move money quickly if there is a problem.

I think the changes to the FDIC are going to ensure that moving money quickly out of a troubled bank isn't going to happen.

I never planned to get 100% out of the market.  My experience in trying to move my assets was what prompted me to step back and look at what I know to be happening and to just decide the risks simply were not worth it.  Legally they are supposed to move funds within 5 business days.  It took me 3 requests from the bank where I moved stuff to, a letter demanding my fund be moved, a letter to our securities commission that my repeated requests were being ignored and a total of 7 weeks and the securities commission stepping in for my money to be moved.  I was planning on leaving about 20% to keep in the market, but the experience of trying to get my money out of my online broker seriously scared me and I only left the one investment that I am forbidden to sell for about another year still.

Scary stuff...

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#2) On August 09, 2008 at 1:30 PM, dwot (50.85) wrote:

And for the record, my first request was to move only about 35-40%.  It was the non-compliance that prompted me to increase the original request and do up a second one to a second financial institution.

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#3) On August 09, 2008 at 1:46 PM, LordZ wrote:

Holey moley DWot has a car so old

that there actually is a real horse in front of it pulling it along...

LOL ~ j/k

 

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#4) On August 09, 2008 at 2:55 PM, dwot (50.85) wrote:

It is still a good car, imho, cosmetics aside...  And it is powerful, I loved the way it hugged the road driving the 2000 km trip I did 4 times this past year.

Here is something else I predicted was coming, property owners being hit with increased taxes.  This isn't a way I was expecting, but then I keep going on about the wild cards that come out.  I simply expected property taxes to go up, I still do.  This is taking out the loophole that lets you own more then one home and just by living in it at the time of sale being exempt from paying tax on gains.  Now it is prorated for how long you owned it and how long you actually lived in it.

Now, the way it is calculated is actually worse then it looks.  Say the home is owned 25 years and lived in the second half.  Generally the gains are not linear, and excluding a deleveraging and popping bubble, homes do not increase linearly from buy to sell and more of the gain would be in the second half.  This is allocating the gain linearly.

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#5) On August 09, 2008 at 7:17 PM, TDRH (99.65) wrote:

Sounds like your cars have been good investments.   This is off topic, but did you see how the majors are all ending their lease options?  This represents 20% of their volume.   This will fuel the shift in consumer demand for vehicles.   Deej writes about this quite a bit, but there needs to be serious contraction in production.

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#6) On August 09, 2008 at 7:36 PM, AnomaLee (28.59) wrote:

"...there needs to be serious contraction in production."

I'd agree, but that will cause the price of autos to exceed the affordability of many consumers throughout the world(not just the U.S.)

I don't think the problem has been so much production as compared to productivity. This is especially true when you consider productivity vs labor. The imbalances of productivity vs labor is the largets headache for Western eocnomies.  

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#7) On August 09, 2008 at 7:46 PM, jahbu (88.26) wrote:

No worries Dwot, soon all factories will be at full capacity making tanks and bullets.  Everyone will have employment. 

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#8) On August 09, 2008 at 9:41 PM, dwot (50.85) wrote:

TDRH, I have done well with vehicles.  I did see stuff on car leases, and huge losses to the lease holders as people chose to let the leases lapse.  I think I even did a short post on it.  The cars are simply worth far less then their buy out price on the lease at maturity.  It is not surprising they aren't doing leases anymore.  The losses are massive.

I think now is a good time to be buying a vehicle.  Prices are low.  

 

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#9) On August 10, 2008 at 1:39 AM, dwot (50.85) wrote:

This is a significant reduction in copper production, poduction at Codelco's eight mines fell to 675,000 metric tons from 764,000 metric tons in the first half of 2007, about 12% down.  This is probably helping copper hold its price.

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