A Doomsday scenario unfolds for Detroit.

[Bokl]

Originally Posted by zete

I've been lusting after a Corvette for twenty years. However, it's impractical and so I've purchased practical vehicles.

I really don't comprehend folks who don't get this "living within your means" mentality. I'm not the most frugal person, but it's not hard to be reasonable about what you buy. I do think credit cards make people into purchase monsters, unable to comprehend what they're doing ... or what they've done ... until the bill arrives.

I was raised with a simple motto: "Skimp on everything except food." It's worked well for me these past few decades.

You would be suprised how many people go and spend $200 on a dinner but they only make $600 per week. All credit cards. The way they think is i will do this now and worry about it later. But that later is what gets people in trouble. I always have cash on me. Only time i will use my credit card is if i need to purchase something that is $500 or more. see if people had cash in their wallet instead of plastic, they would see how much their are spending. But many people can not control them selfs and now they are paying for it.

[Bokl]

Originally Posted by gardnet1

What will be scary is when credit card companies start reducing credit lines. I have already had this happen on a home equity line of credit, right in the middle of a remodeling.

They are already doing that. My brother had American express with 20k limit. it went down to 6k.

[PAULSTS1]

Originally Posted by gardnet1

What will be scary is when credit card companies start reducing credit lines. I have already had this happen on a home equity line of credit, right in the middle of a remodeling.

I agree this is a bad thing! My Company sent out 25K customer letter of decline in Equity Lines 6 months ago! Now, when I see the show "Hidden Potential" in real estate, I just cringe. I wonder how many of those well meaning, hard working, naive people actually began all of that expensive remodeling and today, how are they living today and yes, where?.

I have enjoyed good living many decades and have learned to live much lower than my means, so the upcoming time should be full of opportunities, perhaps I'll wait on the MKS, I may be able to get a Mercedes cheaper later?

[HoosierRon]

A golden opportunity for dealers: cut out the middle man.

[steinravnik]

Originally Posted by GAIntrigue

Am I missing something here? If a consumer can't get a loan to buy a car, does it matter if the car has a domestic or foreign nameplate? This scenario doesn't bode well for anyone.

Very true. In fact, one could argue that it affects foreign countries even more, because so much of their lifeblood depends on trade with the U.S. This is why the Nikkei is down a lot more than any of our equity indexes.

[steinravnik]

The economy grew over the past decade as a result of a multi-trillion dollar credit expansion. The unwinding of this will not be pretty. Doomsday? I don't think so. Correction with adverse (temporary) consequences, yes.

[steinravnik]

Originally Posted by T-Type

All the automakers will be affected, not just Detroit. However due to their already weakened condition, this is particularly dire for them.

Good point, Toyota and other automakers have a much bigger cash hoard to ride this out.

[steinravnik]

Originally Posted by zete

I was raised with a simple motto: "Skimp on everything except food." It's worked well for me these past few decades.

That's what a 500 pound man once told me.

[MCGARRETT]

Don't forget even in tough times, the rich are still rich.

Yes, but remember also, they are less inclined to "conspicously conusme" during tough economic times, they are afraid they might find their new 7 series sitting on 4 flats and keyed.

[zete]

Originally Posted by Bokl

You would be suprised how many people go and spend $200 on a dinner but they only make $600 per week. All credit cards. The way they think is i will do this now and worry about it later. But that later is what gets people in trouble. I always have cash on me. Only time i will use my credit card is if i need to purchase something that is $500 or more. see if people had cash in their wallet instead of plastic, they would see how much their are spending. But many people can not control them selfs and now they are paying for it.

You'll do quite well with that attitude. I wish more folks had it.

My wife and I go out to a nice dinner about 3 or 4 times a year -- we could afford more, but then it wouldn't be special. We make sure it's a night to remember and well worth the money. I have friends that eat out all the time. I'm totally amazed they can afford this. Though, sometimes I think they can't and just keep doing it because of optics.

Originally Posted by steinravnik

That's what a 500 pound man once told me.

Smart ass.

[t-rex]

Originally Posted by MCGARRETT

Yes, but remember also, they are less inclined to "conspicously conusme" during tough economic times, they are afraid they might find their new 7 series sitting on 4 flats and keyed.

Good point, MCG...

And there's historical precedent too. In the Great Depression, there were still countless gozillionaires in this country, yet many famed luxury marques such as Pierce-Arrow, Auburn, and Cord disappeared. It wasn't from lack of well-heeled customers.

Packard, Cadillac and Lincoln weren't exactly selling to the middle classes, yet all survived, albeit in a slightly "downmarket" fashion. Lincoln's medium-priced Zephyr kept that brand alive. Packard's Clipper kept the Detroit plant humming. And Cadillac's "entry-level" 60 series kept Cadillac alive, but sadly spelt the death of the LaSalle.

These "low-priced" models actually became the standard-bearers for these marques and the high-dollar models, that actually competed with the likes of Rolls-Royce, disappeared.

My Mom has told me the story many times of how her grandfather, who owned a successful nationally-branded coffee company that thrives today, at the time of the 1929 crash owned a beautiful green Pierce-Arrow. Many of the city's wealthy felt it was in poor taste to drive around such luxury cars (the P/A was the equivalent of today's R-R or Bentley) while so many honest, hard-working people stood in soup lines.

After about a year, he bought himself a Buick, and an Oldsmobile for my great-grandmother, who had just learnt how to drive. They tried to sell the Pierce-Arrow, but could find no buyers, so it was permanently parked in the carriage house (as garages were called in 1920s New Orleans) and only taken out for a monthly spin to keep in proper condition. Sadly, the carriage house and P/A were consumed by fire some years later.

Thus began his lifelong loyalty to Buick, owning at least a dozen until he passed in the 1970s. He was a wealthy man who could have easily afforded much more expensive cars, but was also a humble man who appreciated the low-key tastefulness that Buick represented. That sowed a seed for generations of his offspring, and to this day, his wealthy grandson, CEO of the company he founded, can today be seen driving up and down St. Charles avenue in a mere Mercury Mariner.

And my great-grandfather wasn't alone. Many of New Orleans' (and to my understanding, this was common elsewhere in America) wealthy families traded down to even Plymouths and Fords simply out of respect to those who were less fortunate in the economic catastrophe of the early 1930s.

I wonder if today's avaricious, conspicuous nouveau-riche, at least those who will survive an economic collapse, would have the same decency to exercise good taste. Somehow I doubt it...

[Beau]

"steinravnik" Please, you don't need 8 different posts. Put it all into one, your lame ass sig is taking up the whole page.

[gn4u2c]

If people just buy crap they can afford none of this would have ever happend remember your grandparents living within there means. You know they had cash in the bank but they would not buy 2 new cars they just kept the old truck and 6 yr old tarus and that was that. They grew up durring WWII when bascily all luxury was haulted in the name of the country taking care of its self and the rest of the world. We would be well served to have a few years where we learn what it means to make a sacrifice. Right now people just say ahh I had to cut out my starbucks in the moring, My whole world is gone to hell !! stop crying and do what you got to do ! I make $40,000 a yr and have a wife ,kids, house payment all that and we find a way. Sure theres no fancy dinners downtown and no new Camaro plans for me but I can take my family to the river and have a picnic on sunday. I can buy a few beers here and there on a thurday night.

[Caleb02]

why do they make cars that can go faster then the speed limit. why dont we have technology that says here is the speed limit for this road and then your car cant go above it. OR why dont we just place automated speed traps in a road, where it reads your plate as you pass this 1st sensor then when you pass the second sensor it reads it again and says at this speed it should take at least xxx time and you did it quicker then that so you should get a ticket and it mails it to you

[gn4u2c]

uhhh come to maryland I have gotten 3 unmaned speed camera tickets so far. I learned my lesson Now I have the double fogged reflective cover