But we already know about LBYM..........

[mickeyd]

Looks like the rest of the world is getting on board with that LBYM thing.

Quote:

"The American consumer has woken up and realized that their debt is too big, their car is too big, their house is too big, their belly is too big and somehow they have to go on a diet," says Underhill. What's more, the man who has been called the Margaret Mead of shopping says the change is gonna do us all a world of good -- at least in the long term. In the short term? Well, no pain, no gain.

American spender is new 'biggest loser'

[Rambler]

I have just one thing to say:

Of the hundred or so people you know who have gone on a diet in the last 10 years, how many have stuck with that diet, and kept the weight off for the entire 10 years?

Well, I firmly believe that this LBYM phenomenon is kind of like the Atkins diet fad. The people who believe in it, and really make it work, are already there, and they have been for a long time. Sure, a few new "true believers" will join our ranks. But most will be here today, gone tomorrow, for the most part. They may "slim down" a little bit, but their overall SMI (Shopping Mass Index) will bounce back, and may be less than before, but will still be at least "overweight" if not "obese".

My two cents...

R

[ls99]

Yeah this sudden mass population LBYM. I see it the same as the early spring interest in exercising, or the newfound GREEN, behavior.

As I like to say, this too shall pass.

[freebird5825]

More of a knee jerk reaction to the inevitable reality of (referring to the overspent consumer in hock up to their eyeballs) :
"The credit cards are maxed and you're broke, fool"
or
"You been playin', and now you be payin'."
The New Frugal is a transitory condition at best. Yawn...

[Cattusbabe]

From the article:
"Paco's Cashmere Socks." "Last Christmas, I asked my family to give me cashmere socks; I wanted blue and black cashmere socks. It meant that some of them got me one pair of socks; that's all I wanted from them.
"But I ended up with a bunch of cashmere socks, and I went to my sock drawer and every pair of tube socks that I had from Wal-Mart over the last three years got thrown out. You know what? I'm wearing a pair of cashmere socks now and my feet feel great. I'm loving it."


Horrors. That is not LBYM. Those socks could have been recycled for other used for other purposes.

[Nords]

Quote:

Originally Posted by Cattusbabe You know what? I'm wearing a pair of cashmere socks now and my feet feel great. I'm loving it."

I wonder why he bothers wearing socks at all...

[Midpack]

Rambler, ls99, freebird5825: I sure hope you're wrong, but I fear you're not...

[FUEGO]

I overheard an interesting conversation at the local mongolian bbq joint the other day. There were a few 50-something well dressed professionals discussing the economy. They were government agency type people, something to do with health care. One lady started explaining how she has downsized into their third house recently. They started out at 2800 sf when the kids were still living with them. Then went to 1900 sf when the kids left home. Now they just moved into a 1500 sf house. Apparently all of this happened in the last few years.

The interesting part of the downsizing discussion isn't the simple fact that someone wised up to the fact that they can save a lot of money by getting a "right-sized" house. It was the style of explaining the actions and thought process. And the reactions of those listening to this lady. It was the exact same style and reaction that I would have expected a few years ago if someone were to explain their rationale for buying a brand new Escalade or Hummer or something. Everyone was smiling, nodding their heads in approval and commenting on what a great idea and how smart it was and how much sense it made. Being frugal is finally "in style". For now at least, it seems like "keeping up with the Joneses" may mean cutting out some frivolous expenses, selling that second boat, selling the Escalade or Hummer and getting a $30,000 hybrid import that gets a little better gas mileage, etc.

It is very interesting to see the public opinion on consumption and expenses change. I wonder how much of this is driven by the media and how much is really driven by individual's fear of reduced means going forward? For many people, they didn't have anything in the form of retirement savings to lose, and their jobs are still stable (ie government and healthcare generally speaking). So they are no poorer today than 2 years ago, and their income has a very low likelihood of declining or going away, yet they are still driven to save and conserve. Must be the media.

My take is this frugality is just a trend and as soon as we get back to the good old days of economic boom times, we will once again have double digit price increases in investments and housing, access to home equity loans and cash out refi's and 401k loans, and more asset bubbles to get the media abuzz again. Once we get into an economic recovery, most will go back to their old ways again and spend every penny they have and then some. A small portion of folks might get that "Great Depression" fear that my grandparents in their 80's have. But for most people, no lessons will be learned. Bailouts will always be there. Buy as much house as you can afford. You'll have a great place to live in the meantime, and you may become a millionaire from price appreciation. Worst case, you send the bank some jingle mail and walk away with a dented credit record for a while (but you got to live in a totally sweet house in the meantime). The only ones that will change permanently I think are the ones that lost their house and job AND had a tough time afterwards (ie became homeless and destitute, frequently hungry, suffered, etc).

Just my $.02

[Alan]

Quote:

Originally Posted by Rambler ... but their overall SMI (Shopping Mass Index) will bounce back, and may be less than before, but will still be at least "overweight" if not "obese".

SMI

I agree that most will "fall off the wagon" once the economy recovers. 6 years ago, after the children were out the house, we downsized from 3,500 ft to 1,500 and most folks thought we were a little eccentric, but now we don't look so odd.

[FUEGO]

Quote:

Originally Posted by Alan SMI I agree that most will "fall off the wagon" once the economy recovers. 6 years ago, after the children were out the house, we downsized from 3,500 ft to 1,500 and most folks thought we were a little eccentric, but now we don't look so odd.

I'm sure there are going to be a slew of 60-ish "retirees" trying to sell their 3500 sf houses, get the remaining equity out to live on during retirement, and buy a smaller house. "In these difficult times", as they say, it will seem very normal and acceptable to do that (because it makes sense).

[mickeyd]

From cashmeresocks.com:

Quote:

Available colors: Ivory/White, Taupe, Midnight Blue, Flannel Gray, Slate Gray, Black, Crimson Red,Cherry Red, and Dark Forest Green. Please be aware that due to different monitors, there might be slight color variations from actual product. We titled the colors accurately to assist you in making your choice. Thank you for your business Add items to your shopping cart from the links below: Price: USD 48.00

WOW! $48 for socks? Hey that's my sock budget for at least 10 years (if I had a sock budget). Damn if I even knew that men's socks were even made of cashmere!

[Midpack]

Quote:

Originally Posted by FUEGO My take is this frugality is just a trend and as soon as we get back to the good old days of economic boom times, we will once again have double digit price increases in investments and housing, access to home equity loans and cash out refi's and 401k loans, and more asset bubbles to get the media abuzz again. Once we get into an economic recovery, most will go back to their old ways again and spend every penny they have and then some. A small portion of folks might get that "Great Depression" fear that my grandparents in their 80's have. But for most people, no lessons will be learned. Bailouts will always be there. Buy as much house as you can afford. You'll have a great place to live in the meantime, and you may become a millionaire from price appreciation. Worst case, you send the bank some jingle mail and walk away with a dented credit record for a while (but you got to live in a totally sweet house in the meantime). The only ones that will change permanently I think are the ones that lost their house and job AND had a tough time afterwards (ie became homeless and destitute, frequently hungry, suffered, etc). Just my $.02

I really hope you are wrong too. But if we don't enact/restore regulations (restore Glass-Steagall, restore loan qualifications, get the SEC back on track, etc.) to prevent this from happening again, I am afraid you are right. This is a crucial point IMHO, and an unlikely source but here is the clearest, most concise explanation I have heard yet Elizabeth Warren Pt. 2 | The Daily Show | Comedy Central.

I don't particularly care for Jon Stewart's politics, but I think Elizabeth Warren should be in charge of our economy right now. I had seen her on other shows before and been impressed.

[mickeyd]

My folks were what I call "Depression era folks" and their habits of frugal living (I dare say LBYM) rubbed off on me and my 4 siblings. None of us are spendthrifts though, we are all successful. I am hoping that this long recession will instill the same kind of thinking in many of my fellow citizens.

[haha]

Quote:

Originally Posted by FUEGO My take is this frugality is just a trend and as soon as we get back to the good old days of economic boom times, we will once again have double digit price increases in investments and housing, access to home equity loans and cash out refi's and 401k loans, and more asset bubbles to get the media abuzz again. Once we get into an economic recovery, most will go back to their old ways again and spend every penny they have and then some. A small portion of folks might get that "Great Depression" fear that my grandparents in their 80's have. But for most people, no lessons will be learned. Bailouts will always be there. Buy as much house as you can afford. You'll have a great place to live in the meantime, and you may become a millionaire from price appreciation. Worst case, you send the bank some jingle mail and walk away with a dented credit record for a while (but you got to live in a totally sweet house in the meantime). The only ones that will change permanently I think are the ones that lost their house and job AND had a tough time afterwards (ie became homeless and destitute, frequently hungry, suffered, etc). Just my $.02

This is how I see it too. I think that in the US and certainly much of the English speaking world nearly everything is a fad. How else could you explain Twitter? Or American Idol? Or any of those bizarre "reality" shows. I made the error of turning on Nightly News with Brian Williams last night. Yuck! The fad now seems to be who can display the most false, useless, saccharine "sympathy" for our fellow Americans suffering from the bad times.

Very hard to underestimate Americans. No matter how low your expectation is, we will usually surprise you by coming in lower yet.

Ha

[clifp]

Quote:

Originally Posted by Midpack I really hope you are wrong too. But if we don't enact/restore regulations (restore Glass-Steagall, restore loan qualifications, get the SEC back on track, etc.) to prevent this from happening again, I am afraid you are right. This is a crucial point IMHO, and an unlikely source but here is the clearest, most concise explanation I have heard yet Elizabeth Warren Pt. 2 | The Daily Show | Comedy Central. I don't particularly care for Jon Stewart's politics, but I think Elizabeth Warren should be in charge of our economy right now. I had seen her on other shows before and been impressed.

I agree Elizabeth Warren is an impressive figure Ladfina brought her to my attention a few years ago. I didn't know that she had been appointed to the TARP oversight board. Even though I don't agree with her politics, there is no doubt about her intelligence and competence. As Stewart said she is like financial chicken soup.

[freebird5825]

"Champagne tastes and beer pockets" comes to mind when I see people spending beyond their income. Hello hangover!
It's kind of funny...and I say this using my own personal observations of former co-w*rkers. Those of us who grew up with modest amounts or just enough or very little money in the household, the unlimited credit thing didn't seem to take hold.
I am positive that I was one of the few serious savers and investors in my peer group. So my sympathy level for those who danced all night and now need to pay the fiddler is miniscule. Heartless, I know...

[NW-Bound]

Quote:

Originally Posted by mickeyd From cashmeresocks.com: WOW! $48 for socks? Hey that's my sock budget for at least 10 years (if I had a sock budget). Damn if I even knew that men's socks were even made of cashmere!

I did not know that either. Do they have to be drycleaned?

One positive thing about this is that it is one of the ways for the wealth to get "trickled down". How else can the centimillionaires and the billionaires spend all their money?

[freebird5825]

Quote:

Originally Posted by mickeyd From cashmeresocks.com: WOW! $48 for socks? Hey that's my sock budget for at least 10 years (if I had a sock budget). Damn if I even knew that men's socks were even made of cashmere!

Cashmere sox? Heck, go for cashmere elsewhere on the bod.
I did a search for "mens cashmere underwear" and had a really great time checking out the sites.

[FUEGO]

Quote:

Originally Posted by clifp I agree Elizabeth Warren is an impressive figure Ladfina brought her to my attention a few years ago. I didn't know that she had been appointed to the TARP oversight board. Even though I don't agree with her politics, there is no doubt about her intelligence and competence. As Stewart said she is like financial chicken soup.

I have a lot of respect for her, and I think she has a great legal mind and is an excellent legal scholar. I have read her book the 2 income trap, and was under impressed. Her politics and worldview show through. I used her bankruptcy law textbook during college, and her politics showed through, although to a much lesser extent.

During the Stewart interview, she said we need "smart regulations that adapt to new products". The devil is in the details, as I would guess that her definition and implementation of smart regulations would vary greatly from what many would consider smart regulations (particularly those right leaning fiscally conservative laissez faire types).

What I fear is an over-regulated financial industry that is punished when it doesn't (because it can't) provide loans to risky credit people or, in the alternative, is forced to make low interest loans to risky credit people, when the rates on those loans do not cover the credit risk.

I think most of us (save true libertarians) are fans of "smart regulation" but that term would be defined very differently if we took a poll.

[haha]

Quote:

Originally Posted by FUEGO I have a lot of respect for her, and I think she has a great legal mind and is an excellent legal scholar. I have read her book the 2 income trap, and was under impressed. Her politics and worldview show through. I used her bankruptcy law textbook during college, and her politics showed through, although to a much lesser extent. During the Stewart interview, she said we need "smart regulations that adapt to new products". The devil is in the details, as I would guess that her definition and implementation of smart regulations would vary greatly from what many would consider smart regulations (particularly those right leaning fiscally conservative laissez faire types). What I fear is an over-regulated financial industry that is punished when it doesn't (because it can't) provide loans to risky credit people or, in the alternative, is forced to make low interest loans to risky credit people, when the rates on those loans do not cover the credit risk. I think most of us (save true libertarians) are fans of "smart regulation" but that term would be defined very differently if we took a poll.

These people tend to cater to the perceived needs of two groups- those who provide votes for them, and those who provide contributions to them. Hence all the interest in the "poor", and all the gifts given to Wall Street. Everyone else get ready to lose.

Ha