Comments on: 8 Benefits to a Recession or Down Market http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Sat, 21 Nov 2009 16:42:00 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Trampoline Man http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-198327 Trampoline Man Tue, 15 Sep 2009 13:20:49 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-198327 So what do we think the benefits are: 1. Growing in a declining market costs much less. Growing is horrifically expensive. More stock, more cash, more space, more staff. It eats money. Do it when the market is down and you can grow share with out the spend. 2. The competition became distracted. Some competitors cut back, reducing range and staff. That gave us opportunities. 3. We learnt to focus on the best customers. One of the first things to happen was poorly managed customers going bust. It has really tightened credit control and our views on who are the best people we want to work with. 4. We treat things with more respect. From forklifts in the warehouse, to the chairs and computers, people have started to feel respect for things. Everything is less disposable. 5. We learnt to look for value again. We have re-pitched all main items of expenditure, not necessarily giving the business to the cheapest, but the best. 6. We have slowed down and thought more. So what do we think the benefits are:

1. Growing in a declining market costs much less. Growing is horrifically expensive. More stock, more cash, more space, more staff. It eats money. Do it when the market is down and you can grow share with out the spend.

2. The competition became distracted. Some competitors cut back, reducing range and staff. That gave us opportunities.

3. We learnt to focus on the best customers. One of the first things to happen was poorly managed customers going bust. It has really tightened credit control and our views on who are the best people we want to work with.

4. We treat things with more respect. From forklifts in the warehouse, to the chairs and computers, people have started to feel respect for things. Everything is less disposable.

5. We learnt to look for value again. We have re-pitched all main items of expenditure, not necessarily giving the business to the cheapest, but the best.

6. We have slowed down and thought more.

]]> By: Maria http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140735 Maria Wed, 26 Mar 2008 02:26:52 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140735 With the extra $300 per kid, my check should be around $2,100. But I hardly consider this free money. It came from the taxpayers, was borrowed or simply printed by the Federal Reserve. In the end, we all pay. Mortgage rates have actually increased after the most recent Fed actions lowering the overnight rate. Perhaps banks realize that inflation will kill their profits if they are only charging 4-5% interest. As far as buying stocks, they have a long way to go (down) before I jump back in. Buy silver ... it's heading up, folks. With the extra $300 per kid, my check should be around $2,100. But I hardly consider this free money. It came from the taxpayers, was borrowed or simply printed by the Federal Reserve. In the end, we all pay.

Mortgage rates have actually increased after the most recent Fed actions lowering the overnight rate. Perhaps banks realize that inflation will kill their profits if they are only charging 4-5% interest.

As far as buying stocks, they have a long way to go (down) before I jump back in. Buy silver … it’s heading up, folks.

]]> By: Brenna http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140171 Brenna Tue, 18 Mar 2008 03:41:40 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140171 The one benefit with a recession happening now is that with good credit, I took advantage of the low interest rates to finance my new (used) car. The one benefit with a recession happening now is that with good credit, I took advantage of the low interest rates to finance my new (used) car.

]]> By: John Zeratsky http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140162 John Zeratsky Mon, 17 Mar 2008 22:50:20 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140162 > Interest rates on mortgages certainly haven’t dropped much. That's because the fed overnight rate has little to do with mortgage rates. If anything, they are inversely related — lower fed rates point toward higher inflation, which equals higher mortgage rates. Mortgage rates are determined by long-term mortgage bonds. The key words there are "long-term." The fed's overnight rate is the definition of short-term; you can't get much shorter than overnight! > Interest rates on mortgages certainly haven’t dropped much.

That’s because the fed overnight rate has little to do with mortgage rates. If anything, they are inversely related — lower fed rates point toward higher inflation, which equals higher mortgage rates.

Mortgage rates are determined by long-term mortgage bonds. The key words there are “long-term.” The fed’s overnight rate is the definition of short-term; you can’t get much shorter than overnight!

]]> By: AJC @ 7million7years http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140136 AJC @ 7million7years Mon, 17 Mar 2008 18:40:39 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140136 What do you do when your corner store has a sale ... you stock up big on the stuff that you will need later. Why is Costco so successful, because people buy up big because their stuff is ALWAYS ON SALE. Right now, for perhaps the first time in living history, BOTH real-estate and the money needed to fund it ARE ON SALE! What should you do? Stock up NOW (while you are still working and cann afford to fund some mortgages) to enjoy LATER (when the real-estate has appreciated ... more money comes in than the remaining mortgages cost you) when you RETIRE YOUNG! Read some blogs, get educated ... but, invest while you still can ... What do you do when your corner store has a sale … you stock up big on the stuff that you will need later.

Why is Costco so successful, because people buy up big because their stuff is ALWAYS ON SALE.

Right now, for perhaps the first time in living history, BOTH real-estate and the money needed to fund it ARE ON SALE!

What should you do?

Stock up NOW (while you are still working and cann afford to fund some mortgages) to enjoy LATER (when the real-estate has appreciated … more money comes in than the remaining mortgages cost you) when you RETIRE YOUNG!

Read some blogs, get educated … but, invest while you still can …

]]> By: David Mackey http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140121 David Mackey Mon, 17 Mar 2008 15:21:48 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140121 Yeah, I see my economic stimulus rebate check going to pay already existing bills - not pay new ones. Yeah, I see my economic stimulus rebate check going to pay already existing bills – not pay new ones.

]]> By: Kyle http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140119 Kyle Mon, 17 Mar 2008 14:20:50 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140119 I will take my rebate check and put it directly into my emergency fund. Not economic stimulation from me. I will take my rebate check and put it directly into my emergency fund. Not economic stimulation from me.

]]> By: SingleGuyMoney http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140115 SingleGuyMoney Mon, 17 Mar 2008 13:59:14 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140115 As much as it sucks right now, in the long run, the down market will really help. As you mentioned, stocks and bonds are really undervalued right now. As much as it sucks right now, in the long run, the down market will really help. As you mentioned, stocks and bonds are really undervalued right now.

]]> By: traineeinvestor http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140113 traineeinvestor Mon, 17 Mar 2008 13:28:38 +0000 http://www.consumerismcommentary.com/2008/03/17/8-benefits-to-a-recession-or-down-market/#comment-140113 A good list - although I would take the view that the rebate and the lower taxes are very illusory benefits given that the US government has to borrow to fund it. 2, 3 and 4 are the real benefits for those looking to accumulate assets. A good list – although I would take the view that the rebate and the lower taxes are very illusory benefits given that the US government has to borrow to fund it.

2, 3 and 4 are the real benefits for those looking to accumulate assets.

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