Another anecdote from Black Swan

One more story from Mish’s prolific, observant, and plugged-in commenter Black Swan, found in comments on this post:

Yesterday morning, I was invited over to a friend’s house for Turkish coffee, something I had never tried before. My friend and her family own a shipping company, and they went through an expansion period in 2006. She and her family had been offered acreage in a new industrial park in a small Virginia town near Norfolk, for a couple thousand dollars an acre. They built a 100,000 sq. ft. office and warehouse complex. It cost them $2 million to build, and it has been sitting empty since it was completed. They also went on a residential real estate buying binge that same year. As you might guess, their timing was a disaster. She is very scared. 

They also own a big shipping complex at the Wilmington port, and that one, at least, is paid for. Their main headquarters is in NJ. She is getting freaked out about the deteriorating BDI figures. She desperately wants her shipping business to turn around, but she is seeing no evidence that it will. Meanwhile, she and her family, who put 20% down on all the residential properties they bought, are very much underwater in their mortgages. I gave her my vision of the future, and she has gone from fear to panic. Hey, she asked.  [Emphasis added]

Aside from the additional data point about what it is really like out there for mid-level business owners, I was struck by the fact that they paid 20% down on their properties—the old definition of prudent when applied to an individual,  yet in the case of a business probably a mistake because 20% will be lost upon default, rather than 10% or 5% or 0%. And, as a business, nobody will sympathize much about their losing that 20%, but neither will anyone spend much time scolding them about their moral failings in not somehow paying the other 80%. It’s just a business deal that went sour.

Black Swan is also right about the Turkish coffee.

The Turkish coffee she made me, for those who are as uninitiated as I was, was brewed on the stove from a mixture of coffee (ground to powder) and cardamom, in an 8 oz pot with a handle, called an Ibrik or a Cezve. It was boiled and reboiled. to the point of boiling over, four times, and then served in little dimitsse cups. It was extremely thick, but did not taste as bold as espresso.

It is very good, but more trouble than I am willing to take to make for myself. I’ve been fortunate to occasionally have some made for me. One thing Black Swan doesn’t mention is the sugar—I think it is always served sweetened, with the sugar brewed along with the coffee and cardamom, and the Turks generally like their sweets sweet.


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