How high can it go

funwithfuel · May 1, 2022

You guys ain't seen diddly squat yet. Wait till after the mid-terms. Germany has been asked to hold off on prohibiting Russian energy until after the mid-terms. Once that's over with, Germany will withdraw from energy agreements with Russia and begin to purchase off the world market. There's another consumer and one less supplier. You don't have to be an economics professor to see the implications. On top of that, do you think there is any reason to maintain fuel tax forgiveness, not until next election cycle.

suladas · May 1, 2022

I'm not hoping things slow down, but i'm at the point if things continue crazy or drop i'm going to benefit either way. I've sold 3/4 of my houses (no more dealing with renters!), was trying to sell my CTL but got tired of lowballers might try again. With interest rates going up fast, cash is king and much easier to make good returns with it.

It's crazy how much many trade prices have went up and how busy people are. There are people digging basements like crazy even on sundays, it's insane. Won't catch me doing it though.

I know I wouldn't be buying any equipment right now unless I had some guaranteed long term contracts locked up or something like that. The guys who are not piled up in debt will survive the slowdown and probably stay reasonably busy and will be able to find employees really easy. Because if the work available drops 50% tomorrow, there will be non stop companies folding and so many less around to do the work.

I really feel for the guy who does my trucking, he just spend $1 million adding pickups and equipment to expand from just dump trucks. If things go down he's going to be in a lot of trouble.

suladas · May 1, 2022

funwithfuel said:
You guys ain't seen diddly squat yet. Wait till after the mid-terms. Germany has been asked to hold off on prohibiting Russian energy until after the mid-terms. Once that's over with, Germany will withdraw from energy agreements with Russia and begin to purchase off the world market. There's another consumer and one less supplier. You don't have to be an economics professor to see the implications. On top of that, do you think there is any reason to maintain fuel tax forgiveness, not until next election cycle.

Which should mean oil places like here get absolutely stupid busy but it will never happen. They will get oil from unethical places like saudi arabia, venezuela, anywhere but Canada. And as soon as the stuff with russia is over give it a few months and they will go back to buying their oil.

funwithfuel · May 1, 2022

The current administration is on a clean energy kick, no matter how much or who it hurts. The EPA standards set for 2026, I think are currently unattainable. No carbon credits, no I produce 175k turbo 4-bangers now let me make 2 dozen 8 cylinders. Those days are gone. And diesel, they're pricing it out of existence. Fossil fuels are gonna be just like R12, electric is the new R134a and nobody's thought about what the next R1234y is gonna be. The greenies win, and we lose. I'm still not sold on global warming. Friggin boondoggle is what it is.

DMiller · May 1, 2022

Sad to consider I dare say TS is correct, we sit at a juncture of topple over if something does not change. Interest rates get stupid as in the 80s, banks mergers get stupid, loans get called that are seen as Chancey and then all hell breaks loose. Autos are out of sight price wise, property taxes have gone insane due to escalated speculation, then the jobs market is tanked and transport of products in jeopardy. My boss was offered a 2022 Pete leftover day cab tandem X15 Progressive shift 13 on air ride similar to a truck he purchased in Nov last year, price was UP $30k.

Shimmy1 · May 1, 2022

Let's all try to stay on topic, we all know that we all have ideas on who's to blame, but none of us are going to change any other's mind no matter what we type on here. I started this thread to see what other guys in other parts of the country are planning to do both short-term, and long-term. I'd have felt alot better about spending $200k on an excavator last year, and probably should have, but hindsight is always 20/20.

suladas · May 1, 2022

Shimmy1 said:
Let's all try to stay on topic, we all know that we all have ideas on who's to blame, but none of us are going to change any other's mind no matter what we type on here. I started this thread to see what other guys in other parts of the country are planning to do both short-term, and long-term. I'd have felt alot better about spending $200k on an excavator last year, and probably should have, but hindsight is always 20/20.

But chances are that machine will be worth a lot less in the next 6-12 months then what it was last year even.

Guy who I said spent 1 million bucket paid $100k each for 2 F450's loaded and $30k a piece for 2 3x10k gooseneck trailers, then 2 CTL's, and 3 mini ex's. He was even considering a 200 hoe, said it was $300k all said and done with no thumb just extra bucket and ripper that was all Cat stuff.

IMO if only needed here and there i'd rather rent equipment this year. Sure there's a chance things stay ok this year, but prices will still come down once supply chains are back. But i'd say more then likely there will be no shortage of deals on equipment pretty quickly.

Shimmy1 · May 1, 2022

suladas said:
But chances are that machine will be worth a lot less in the next 6-12 months then what it was last year even.

IMO if only needed here and there i'd rather rent equipment this year. Sure there's a chance things stay ok this year, but prices will still come down once supply chains are back. But i'd say more then likely there will be no shortage of deals on equipment pretty quickly.

You're the first I've heard say stuff will be worth substantially less going forward. I have been renting, but I'm tired of spending $40k a year on rent and not making any ground. Also, interest is not going to stay where it's at, in fact if I wouldn't have gotten a qoute from my banker bank in January, interest today would be around 5.5, and it's certainly not going to be that next year. If I don't do it now, *if* I can find the same deal next year, it would end up costing me an extra $14k in interest alone over the life of the loan.

AzIron · May 1, 2022

Interesting thing about the southwest is track housing is all built with tile roofs witch needs Portland to make so anyway tile is on backorder right now so it's becoming more of a thing that houses are framed and waiting for roof tile to load the structure so the can top out and drywall and of course stucco this causing delays well over a month so on average right now if you buy a track house it's a year to move in do you think anyone last summer was thinking about these interest rates when they signed

My generation has never experienced historical standard interest rates so once above 6 percent for a house I dont think people are ready for that and they cant afford that interest on these prices

I see commercial having the same problem here with delays and rising interest there is no way to maintain a budget

There is no cure for high prices like high prices

suladas · May 1, 2022

Shimmy1 said:
You're the first I've heard say stuff will be worth substantially less going forward. I have been renting, but I'm tired of spending $40k a year on rent and not making any ground. Also, interest is not going to stay where it's at, in fact if I wouldn't have gotten a qoute from my banker bank in January, interest today would be around 5.5, and it's certainly not going to be that next year. If I don't do it now, *if* I can find the same deal next year, it would end up costing me an extra $14k in interest alone over the life of the loan.

Once supply chains resume used prices will absolutely drop as new inventory rates go up they will cut prices to move stock. Interest rates it's hard to say, and the increases could offset the decrease in equipment cost. If I was buying cash, I would totally wait. But financing, it's tougher to say. I think if you can buy and know it would still make sense to own if prices come down and things slow down it might make sense to buy with that kind of rental cost.

My numbers for my CTL were like $38k if I sell it, i'd probably only spend $4k a year renting to replace it, and I can make a pretty decent return on the $38k I have freed up.

suladas · May 1, 2022

AzIron said:
Interesting thing about the southwest is track housing is all built with tile roofs witch needs Portland to make so anyway tile is on backorder right now so it's becoming more of a thing that houses are framed and waiting for roof tile to load the structure so the can top out and drywall and of course stucco this causing delays well over a month so on average right now if you buy a track house it's a year to move in do you think anyone last summer was thinking about these interest rates when they signed

My generation has never experienced historical standard interest rates so once above 6 percent for a house I dont think people are ready for that and they cant afford that interest on these prices

I see commercial having the same problem here with delays and rising interest there is no way to maintain a budget

There is no cure for high prices like high prices

That's weird, no concrete shortage here it's one of the few things you can get easily and hasn't increased in price that much.

The big shortage is overhead doors, 6-8 months wait time. Cabinets are taking like 4 months.

Around here they are building in less then 4 months, some I bet are 3 months. They are going absolutely nuts slapping them up. A few builders doing pre-fab so house is framed and in some cases shingled, and sided within a few days.

For interest rates some builders here take draws so the people can save their rate, but within a few months once the rate holds are over I think sales are going to come to a halt. High prices and rates above 4% it doesn't make sense to buy.

digger doug · May 1, 2022

Shimmy1 said:
Fuel up $0.89 this last week, fuel man says that when he dumps the truck on Monday, road fuel is going to be $5.75. It's been holding steady at $4.75 since March, but now it's going to get real. Friend of mine says some guys he's talking to are saying it'll be $7+ by June. What price do you all think is going to blow things up? At some point, something is going to have to give. Anyone changing any plans yet?

It's going to keep going UP until you go "All electric".....

digger doug · May 1, 2022

Vetech63 said:
Diesel here was $5.29 here yesterday. That is the highest I've ever seen it here. Nothing will be left, for anyone, if we have to do another 2.5 years of this.

You forgot the golden years under Jimmy ?
It was allot worse.

Bring on the "government cheese".....

Truck Shop · May 1, 2022

Face it the housing prices have been inflated for a long time now. The Fed left the interest rates too low for
too long. The Fed by leaving interest rates at low levels took away the last lever to pull when a economic
correction is on the horizon. Several things economically and on the world stage make a perfect storm.
In the early 80's when interest rates hit 21% people reeled in-stopped speculating and tightened there
pocket books and waited it out. It's what will happen this time around also.

Here are some examples of history repeating it's self. It's what is going on right now.

https://www.thoughtco.com/causes-of-the-great-depression-104686

Spud_Monkey · May 1, 2022

Spud_Monkey · May 1, 2022

John C. · May 1, 2022

Oh my god. The sky is falling!!!!!

Stay calm, monitor and adjust. We have all weathered storms before and it sounds like ya’ll are already making plans to get through whatever is coming.

DMiller · May 1, 2022

Most of us old farts had home loans, some of us had business loans in the 80s.
Are nowhere near to sky falling in yet but are working that general direction.

Truck Shop · May 1, 2022

I agree-problem people got use to the low interest rates as being the norm. I can remember in the 80's
people thought 6.5 to 7 was great.

Even and steady always wins the race.

suladas · May 1, 2022

John C. said:
Oh my god. The sky is falling!!!!!

Stay calm, monitor and adjust. We have all weathered storms before and it sounds like ya’ll are already making plans to get through whatever is coming.

Of course. I would bet most companies who are run well, have established a good list of clients, and not drowning in debt will likely only feel a small ripple at most. It's just the one's who think now is the time to expand or buy a bunch of new equipment that will be hurting.

How high can it go

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