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Posted: 5/9/2021 12:37:45 AM EDT
Talked to a friend of mine the other day. He owns a construction business. He owned a construction business in 2007-2008 and got clobbered. He’s trying to prevent that from happening again. He has a financial adviser and a long time banker he works with. He has been planning for a slowdown for awhile.

He told me both the banker and the financial adviser think we will see a huge construction slowdown/shutdown by July or Aug of this year. Due to high materials prices and lack of laborers, lots of pending home builds have just started getting cancelled. They think it’s going to pick up steam.

That said, this is just the opinion of a random construction company owner and a banker and a financial adviser.....so no idea if it’s viable info or not.
Link Posted: 5/9/2021 1:25:53 AM EDT
I can absolutely see that happening nationwide.

Its already happening here.
Interest rates are supposed to rise according to my planner.


Link Posted: 5/9/2021 4:14:07 AM EDT
Uh, prices are high because demand is through the roof. There are a lot of us standing by waiting for prices to decrease so we can update our homes or move. The demand isn’t going to just disappear overnight. My basement still needs to be finished and I already have that money in my bank account, just can’t find anybody to do the work anytime soon.
Link Posted: 5/9/2021 8:02:34 AM EDT
OP, what state is your construction friend in?
I'm in WI and own my own drywall business, and seeking out other employment because I think what's coming is going to be way worse than the
2008 bullshit.
Link Posted: 5/9/2021 9:05:56 AM EDT
Yea were waiting on some small remodeling things, but its not that important right now to pay these materials cost
Link Posted: 5/9/2021 9:20:32 AM EDT
Link Posted: 5/9/2021 9:49:03 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Rat_Patrol:

A lot of this, lack of materials and labor will hurt construction big time.

I know a guy echo has a drywall company. He is having to sit on his hands with work waiting due to lack of adhesives or something that he needs.
View Quote
The big freeze in Texas had a bunch of chemical plants shutdown for a while and I had a hard time getting coating mud for a few weeks.
The lady at the local drywall supply shop literally laughed at me when I asked if they had any mud in stock the other day!
Link Posted: 5/9/2021 12:35:54 PM EDT
I think the OP is getting fairly good advice, except the timing will be hard to predict.

One the one hand, a lot of people have extra cash to spruce up or move up, including some commercial interests who want a better or larger facility. Low interest rates are fueling part of that fire. The bottleneck is in the materials and available trades people, along with the steady weekly rise in materials pricing.

There will be a gradual buildup of people like me that say "NOPE, not going to pay those inflated prices and live through strung out projects right now." They will sit tight, and demand will crest, then fall for a while. The timing is the unknown factor. Variables such as interest rates, shortage severity, government interference and manipulation, are some of the looming unknowns.
Link Posted: 5/9/2021 7:42:26 PM EDT
IMHO I believe it is a continuation of the China flu temporary economic slowdown in some sectors, but the demand remains strong and rising.  The supply side disruption is having a hard time restarting, especially when so many workers are paid more to stay home than to work (not everyone in the country lives in a high-cost-of-living area like DC, NYC, Calif...).  The loggers I've talked to have been shipping logs to the mills as fast as they can, and deny that they are getting a cut of the price increases.  As soon as the supply catches up to the demand, the economy will take off again.  The temporary slowdown in construction of new homes due to lack or price of materials is partly the reason that existing home sales are booming.  I just don't see a long-term slowdown, at least until Biden raises taxes and all prices increase across the board.

Disclaimer: I am not a financial expert and it has been a couple decades since I slept in a Holiday Inn.
Link Posted: 5/9/2021 10:19:23 PM EDT
Supply disruptions across the board are causing a little turmoil.

Take, for example, another industry. One of my dad's businesses is installing corrugated drainage tile. He grosses over $1/4M a year just from that business. He has 2 older machines that dig the trench and lay the tile. Up until recently he was considering upgrading to newer machines. Due to shortages of raw plastics for the manufacturing of the product he puts in the ground, the vendor he has been buying from exclusively for 3 decades will not guarantee availability of anything beyond June and that is following a 28% price increase in March. He has a 2+ year waiting list of work to do, yet he is uncertain if he will be able to pay the bills. Even if demand is high, if he can't get product to install he is dead in the water, making nothing.
Link Posted: 5/11/2021 4:39:38 PM EDT
I can also see it, maybe not that fast, the Dems are sure trying hard.
Link Posted: 5/20/2021 8:41:48 AM EDT
I think it’s coming. Especially if the Fed starts tapering.
Link Posted: 5/20/2021 12:13:00 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By exponentialpi:
I think it’s coming. Especially if the Fed starts tapering.
View Quote



I think it is nearly a certainty.   Poor timing in my life....like a lot of things.  

The covid crap knocked my OT potential to near zip.  The last year I was still pounding into retirement accounts but on the high costs.
Link Posted: 5/20/2021 8:01:07 PM EDT
In construction and farming here.  

Several of my construction projects in the fall and winter have been canceled.  There are two main reasons people have giving me for the cancellations.  First is the material costs that keep increasing is just getting to be to much.  Second main reason I’ve been given is that people are getting worried about the future and are starting to sit on cash.

On the farming side commodity prices are helping us tremendously.  But the bankers around here are telling everyone to pay off debt instead of buy new equipment.  The Chinese have been on a buying spree around the world and are on track to buy 4 times as much feed/food as they normally do this year.  This has a lot of people in the business wonder why they are stocking up.

Overall this year will probably be our best year and last year was a dam good one.  We are staying debt free and not making any big investments.  Half the shit I want to buy I can’t get anyways do to shortages so that helps.
Link Posted: 5/21/2021 9:39:33 AM EDT
I was planning on upgrading my little tractor later on in the year.   Got to wondering about availability and such.  Called my buddy (graduated high school together) at the Kubota shop and he said to do it now.  They are having a hard time getting inventory, supplies, accessories, everything.  Hitting them pretty hard.

We all in the same boat.  With a moron for a captain.

Doc
Link Posted: 5/23/2021 11:00:02 AM EDT
[Last Edit: 5/23/2021 11:01:40 AM EDT by AgingDisgracefully]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By exponentialpi:
I think it’s coming. Especially if the Fed starts tapering.
View Quote


The meeting notes for April suggested some Fed folks are getting antsy, but I am not sure tapering (let alone unwinding) is coming soon for three reasons:
1. The Fed's credibility is at stake in a sense (they already suffered an about face with the failed QE unwind before covid)
2. The traditional political costs of fighting inflation right now would be very, very high.
3. The Fed has a tiger by the tail with the everything bubble

If you look at the Fed's structural "reform" projects (they seem to be going toward permanent repo and pushing the big money center banks out of the Federal debt market) those suggest their concern is if anything having a more powerful skinny pedal.

Its also worth noting that tapering is one thing. How the fuck do you actually unwind? Remember, they already failed at this once.

My point being, is there a point to tapering if you then cant unwind?
Link Posted: 5/23/2021 11:45:53 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By AgingDisgracefully:


The meeting notes for April suggested some Fed folks are getting antsy, but I am not sure tapering (let alone unwinding) is coming soon for three reasons:
1. The Fed's credibility is at stake in a sense (they already suffered an about face with the failed QE unwind before covid)
2. The traditional political costs of fighting inflation right now would be very, very high.
3. The Fed has a tiger by the tail with the everything bubble

If you look at the Fed's structural "reform" projects (they seem to be going toward permanent repo and pushing the big money center banks out of the Federal debt market) those suggest their concern is if anything having a more powerful skinny pedal.

Its also worth noting that tapering is one thing. How the fuck do you actually unwind? Remember, they already failed at this once.

My point being, is there a point to tapering if you then cant unwind?
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By AgingDisgracefully:
Originally Posted By exponentialpi:
I think it’s coming. Especially if the Fed starts tapering.


The meeting notes for April suggested some Fed folks are getting antsy, but I am not sure tapering (let alone unwinding) is coming soon for three reasons:
1. The Fed's credibility is at stake in a sense (they already suffered an about face with the failed QE unwind before covid)
2. The traditional political costs of fighting inflation right now would be very, very high.
3. The Fed has a tiger by the tail with the everything bubble

If you look at the Fed's structural "reform" projects (they seem to be going toward permanent repo and pushing the big money center banks out of the Federal debt market) those suggest their concern is if anything having a more powerful skinny pedal.

Its also worth noting that tapering is one thing. How the fuck do you actually unwind? Remember, they already failed at this once.

My point being, is there a point to tapering if you then cant unwind?

If they don’t, we go full Weimar style. And shit hits the fan as dollars are toilet paper. I do think that is the end goal, but a controlled method beats chaos as they can exert more control in the former.
Link Posted: 5/23/2021 12:41:45 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By exponentialpi:

If they don’t, we go full Weimar style. And shit hits the fan as dollars are toilet paper. I do think that is the end goal, but a controlled method beats chaos as they can exert more control in the former.
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Now come on! Toilet paper is worth more than dollars!  

Inflation is here, with the economics geniuses at the helm in Washington it's going to get bad.
Link Posted: 5/23/2021 12:53:36 PM EDT
[Last Edit: 5/23/2021 12:57:36 PM EDT by AgingDisgracefully]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By markmars:

Now come on! Toilet paper is worth more than dollars!  

Inflation is here, with the economics geniuses at the helm in Washington it's going to get bad.
View Quote


Gentlemen, the problem is what may be here is stagflation (still too early to tell), for which all of the options suck.

For now the Fed clings to the prediction that it will be temporary-we'll see. I dont think a Weimar type situation is likely bc not enough of the money will make it to mainstreet-at least as things stand.

I think the big danger right now lies with a potential transition to digital currency (they call it "digital currency" because "an electronic version of the dollar that solves none of the original dollar's problems but removes your last vestiges of privacy" didn't test as well with focus groups).

For example, it could become a vehicle for out and out theft. At the 2021 Financial Markets Conference held recently by the Federal Reserve Bank of Atlanta a participant pushed a digital currency and use of a serial number lottery system to randomly take cash out of circulation (!!!). No one seemed to object or rule that out as nuts (!!!!!!!!!!!).

By the way, you might ask why do such a triggering thing and not just unwind through conventional open market operations. I have been thinking about this and I think a suggestion like this telegraphs that the Fed just wont be able to get a price for the bonds on their balance sheet that would sop up much M2.

In other words, they dont think anyone will want Treasury paper at anywhere remotely near the prices the Fed paid for it.

Beyond that, I think it also telegraphs that the Fed thinks they will be much deeper in the hole before they contemplate how to "unwind".

So the digital currency is dangerous aside from the reasons you have heard because:
1. It is a clear path to outright expropriation
2. What the attractiveness of it to the Fed reveals about the Fed's current position.
Link Posted: 5/24/2021 9:05:24 PM EDT
are we just talking construction or also home values and pricing?

home prices are currently WAY up.. but it seems driven by 2 things : Fleeing cities to find less urban locales due to safety, and lack of inventory in those locales.  inflation may be helping it along, with low mortgage rates, but that isnt the key driver as many of the buyers pushing the pricing envelope are cash buyers.

back in 2007 the crash stopped construction because prices plummeted and construction companies sitting on expensive homes now were sitting on cheap homes.  this is different, home prices remain high, but construction is stopping because nobody can get any materials.  also construction sellers are carefully pre-selling the homes to avoid getting stuck with them if the prices drop.

looking forward a bit, if rates go up (they will) that will cut some amount of homebuying power of buyers, but around here anyway the deals have been largely cash so I dont see home DEMAND going down even if the economy takes a turn.. in fact, it will likely go up, since safety and fleeing urban centers (esp. dem strongholds) is the primary driver.

not sure how any of us can continue to have such shit ability to buy "stuff" at the store much longer in a 1st world economy and continue to have confidence but being all too painfully aware of how the last crash went down I am still investing in real estate.  if the whole economy goes to shit then all bets are off, but somehow I dont see that happening

thoughts?
Link Posted: 6/3/2021 10:07:42 AM EDT
I don't see how we can sustain it.  It's been on life support since 2008 and a dozen years is a very good run.
Link Posted: 6/3/2021 10:58:07 AM EDT
Thoughts on what to do now to stretch the dollars??

Stock up on what you need now.  Quality products, that will last.  If you think you will need it in the next year or two, possibly purchase it now.

Expand the garden

Maybe pick up a few more PM's??

Maybe a few dollars in crypto??  

Keep building those neighbor relations.  

Been stocking up on nails/screws/shop type supplies.

I guess nothing here new.  It's what we have been doing all along.

Doc
Link Posted: 6/4/2021 10:50:30 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DocGP:

Been stocking up on nails/screws/shop type supplies.

Doc
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This has been my biggest push this year. I bought 2 tool drawer benches and a bunch of organizational stuff. It has made projects SIGNIFICANTLY easier. I know where the things I need are, so I'm not spending 20 minutes looking for the tool to do a 4 minute fix. My work bench is clear. My small parts are expanding, and have easily saved a dozen trips to HD/Lowes for that one little part you need but don't have.

Over the year this has saved me more than $2,000 easily. I was able to fix a broken dryer myself, despite having no experience there. A neighbor gave away a fridge/freezer and $12 worth of parts got it going again. Fixed some used/broken stuff to take care of the yard so I didn't have to buy replacements.

I wish I did this 15 years ago when I got my first house but the ~$500 I'm into for storage and organization has made my life way better
Link Posted: 6/4/2021 5:32:22 PM EDT
[Last Edit: 6/4/2021 5:48:29 PM EDT by Rat_Patrol]
Link Posted: 6/4/2021 10:51:51 PM EDT
I'm doing everything I can to continue to build up my shop. I am paying off two lines of credit in the next few months.

As much as I don't want more debt I'm going to roll that money into financing the lathe I need because it already went up hundreds of dollars since I started looking at them. If I wait too long it will end up out of reach as inflation destroys our currency.
Link Posted: 6/4/2021 11:26:03 PM EDT
We will have our BOL paid off in December, that is if the country holds together that long.

As to the house that we were gonna build there that would change it to our residence, that's on hold because of inflation.
Link Posted: 6/5/2021 10:50:32 AM EDT
I work for an ISP.  We are buying things for next year to make sure we can get them to keep our expansion going.  Delivery times are crazy.  Just sent PO’s this week and I’m looking at 4 months for pretty much all of it.  I’m still waiting for some Cisco gear I ordered in December.  Quotes I’m getting from vendors now are good for two weeks instead of 30 days due to price increases.  Inflation is here.  I’m firmly of the opinion things will get worse before they get better.
Link Posted: 6/5/2021 12:08:41 PM EDT
Link Posted: 6/5/2021 3:54:40 PM EDT
I expect the Fed Res to raise interest rates. If they do, it can be over.  Our so called "economy" is dependent on cheap money.
Link Posted: 6/6/2021 7:45:17 AM EDT
Link Posted: 6/6/2021 8:08:48 AM EDT
definitely not.. Construction is taking off
Link Posted: 6/6/2021 9:09:21 AM EDT
Link Posted: 6/6/2021 9:49:22 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Sanlanman:
I think the OP is getting fairly good advice, except the timing will be hard to predict.

One the one hand, a lot of people have extra cash to spruce up or move up, including some commercial interests who want a better or larger facility. Low interest rates are fueling part of that fire. The bottleneck is in the materials and available trades people, along with the steady weekly rise in materials pricing.

There will be a gradual buildup of people like me that say "NOPE, not going to pay those inflated prices and live through strung out projects right now." They will sit tight, and demand will crest, then fall for a while. The timing is the unknown factor. Variables such as interest rates, shortage severity, government interference and manipulation, are some of the looming unknowns.
View Quote

very well said. I don't think any expert or layperson believes we can continue at this rate indefinitely, so it comes down to when does it slow down, how fast/hard it's going to be. Lots of variables. I'm optimistic in thinking that though some unpleasant stagflation is eventually coming, good deals on real estate and automobiles will be more likely than any sort of breakdown.
Link Posted: 6/6/2021 1:55:01 PM EDT
One thing I think we all know is that what the swamp is doing is not sustainable. I think we're heading towards a full crash/bubble burst, likely worse than what we saw in 2008. Frankly, I think a massive crash is the goal for the left. There's going to have to be one for the transition to the Great Reset. "We will own nothing and we will be happy." Isn't that the mantra for UN Agenda 2030?
Link Posted: 6/10/2021 2:21:50 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Sanlanman:
I think the OP is getting fairly good advice, except the timing will be hard to predict.

One the one hand, a lot of people have extra cash to spruce up or move up, including some commercial interests who want a better or larger facility. Low interest rates are fueling part of that fire. The bottleneck is in the materials and available trades people, along with the steady weekly rise in materials pricing.

There will be a gradual buildup of people like me that say "NOPE, not going to pay those inflated prices and live through strung out projects right now." They will sit tight, and demand will crest, then fall for a while. The timing is the unknown factor. Variables such as interest rates, shortage severity, government interference and manipulation, are some of the looming unknowns.
View Quote



Imho, that is the elephant in the room.  A lot of people don't look at the interest rate, they look at the monthly payments.  I want this car, house etc.... If interest rates kick up without corresponding income increases big ticket items will have to come down in price or finance for a longer time.
Link Posted: 6/14/2021 12:17:41 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By TomJefferson:
July here the $300 fed bonus for unemployment dries up.  That should help.
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Not likely, July starts the Child Tax Credit advances. So you can still get paid and not work
Link Posted: 6/14/2021 10:45:54 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Badger545:
Not likely, July starts the Child Tax Credit advances. So you can still get paid and not work
View Quote


Yep. It sure is convenient that yet again payments will start flowing to keep people at home and living off the government. You have to Opt Out if you don't want the money. Why not make people Opt In? And it's an advance against next years tax liability. What are these folks going to do when they don't get their big money refunds....? My guess is there is something else in the works.
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