CaseLabs Announces It Has Been “Forced into Bankruptcy and Liquidation”

Discussion in 'HardForum Tech News' started by Megalith, Aug 11, 2018.

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  1. Dan_D

    Dan_D [H]ard as it Gets

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    I'm not sure I buy this reason. I think the biggest issue here is that their prices were in the stratosphere and one can't run a business through lean times selling Ferrari's alone. Case Labs as I recall sold monstrous cases and very few if any alternatives. Few people build monsters like that. In fact, my Thermaltake WP100 is very similar to Case Labs offerings but I'd wager Thermaltake sells very few of them compared to their smaller and more budget conscious models.
     
  2. Krenum

    Krenum [H]ardForum Junkie

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    Exactly the point I was trying to make earlier before I got crucified by pointing that out.
     
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  3. Zarathustra[H]

    Zarathustra[H] Official Forum Curmudgeon

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    I agree.

    I was always interested in their products but always balked at the price, and I'm not opposed to spending on my tech setups.

    This may have been the last straw though. It's amazing to me that they could not turn a profit with the prices they charged for those things.
     
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  4. Ocellaris

    Ocellaris Ginger @le, an alcoholic's best friend.

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    There isn’t enough raw material in each case to tank the business just from tariffs. These folks are just being a bunch of whiny bitches and trying to blame Trump for a problem they inflicted on themselves. They expect people who read the news to be stupid enough to believe it, which shows how they feel about their customer. Like many on the left, nothing is their fault, they are victims. Good riddance.
     
  5. Prav

    Prav Limp Gawd

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    Absurb claim from CaseLabs. Materials cost for someone selling boutique priced cases is immaterial. This is equivalent to Apple announcing they can no longer sell Iphones because a processor tariff added a few dollars to the cost. If this was some budget case company with razor thin margins it would be debatable, but this is nonsense. Caselabs business did not fail due to a tariff of any size much less the ones currently in place. Will have to remember where these liars end up working so I can boycott their products. Politicizing their business failures is utterly reprehensible.
     
  6. DoubleTap

    DoubleTap 2[H]4U

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    Aluminum seems to be running $1 - $1.20 per pound. Their big cases weigh 32 lbs or more - with the tariff, it might cost them 10% more. It's a few dollars on cases that run $250 on the low end and $800+ on the high end.

    They should have just owned up to it instead of basically saying "we love you guys, we wanted to make your cases so bad, but the big mean orange monster guy just made it impossible, we're so sorry he did that (and also some giant deal fell apart) boo hoo hoo.

    I liked their bullet cases but not enough to buy one.
     
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  7. alxlwson

    alxlwson You Know Where I Live

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    Libertarian, here.

    Your comment directs one way or the other. You made a comment of buried heads, about a company that blamed tariffs, while making zero sense and so many people plugging their ears.
    So yes, it does matter. From which color do you speak?
     
  8. LuxTerra

    LuxTerra Limp Gawd

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    I don't buy it alone either, but it certainly didn't help. Reality is always far more messy and complex than we like to admit. Politics certainly adds an interesting flavor to the discussion, as does the fact this was their livelihood and I'm sure a lot of sweat and blood was poured into it. It's hardly a rational topic for the owners.

    I'm going to pick on you a bit, but it's not just you...

    However, since you bring up cars and multiple people have said they should have just sold a lot of cheaper stuff at reduced margins. That's great and all, but it's not like a massive automobile manufacturer like GM has never gone bankrupt either...you know, doing exactly that, right? Also, that's exactly what Apple doesn't do and they obviously make no profit, right? It's not like there's whole fields of study devoted to figuring this out (business and economics), for example theories like Porter's to describe various competitive advantages and values, right? Here's a simple graph since it's obvious I must: https://www.mindtools.com/media/Diagrams/GenericStrategies.jpg

    That's super simple, almost so simple as to be of no value...and yet I bet almost no one on here has EVER seen it before, despite being self-proclaimed business geniuses! For goodness sakes, take some MBA courses at the local community college or at least read HBR occasionally. I'm am engineer, not a business guy and I don't have an MBA, but even this is basic fundamental knowledge. It's literally blog level of knowledge if you'd just take even the slightest interest in the subject.

    You can make money in multiple ways and companies, large and small, niche and mass market, low and high cost get driven out of the market all the time. Period. Without actual data it's impossible to know exactly why or provide any useful analysis as to what went wrong. It's speculation by the ignorant at best.
     
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  9. LuxTerra

    LuxTerra Limp Gawd

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    Um, you do realize that a lot of what we colloquially call "aluminum" is really almost always an alloy, not the pure metal, and costs SIGNIFICANTLY more than the spot price on the market right? Think cheap aluminum can vs strong car part. You also realize just how much you have to order to get that spot price, right?

    I'm going to guess not or you'd have never made such a silly argument in the first place. Here's the spot price: http://www.kitcometals.com/charts/aluminum_historical.html
    And here's some contract info: https://www.lme.com/en-GB/Metals/Non-ferrous/Aluminium/Futures

    Ya, 25 tonnes! Again, of the base metal not alloyed.

    Oh ya, and you'd better have a plan to take delivery and finish processing that raw material.

    Edit: no small or even medium sized company is realistically dealing with spot contracts or able to do much more than buy an index as a hedge. In the commodities markets though, it's easy to loose your shirt if you get it wrong. Just ask the airline industry about their fuel price hedging over the last decade or so. Or just Google it.

    Here's more data on the physical specs of a minimum contract: https://www.lme.com/Metals/Non-ferrous/Aluminium/Physical

    I hate to have to edit yet again, but just in case it's not common knowledge what LME is...that's the London Metal Exchange which is basically the global standard for these commodities. https://en.wikipedia.org/wiki/London_Metal_Exchange
     
    Last edited: Aug 11, 2018
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  10. GoldenTiger

    GoldenTiger [H]ard as it Gets

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    Oh, I just meant you were acting like he wasn't the president because you don't like him.
     
  11. theplaidfad

    theplaidfad Lurker

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    Okay, instead of saying it doesn't matter, let me put it another way for you...

    Why does it matter to you then? What are you getting at?
     
  12. FrgMstr

    FrgMstr Just Plain Mean Staff Member

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  13. DoubleTap

    DoubleTap 2[H]4U

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    Regardless of their source, its not clear why a 10% tariff on aluminum suddenly invalidates their business plan.

    A point, which many people have made and which, for all your fascinating knowledge about commodities, you have have yet to refute in clear terms.
     
  14. emphy

    emphy Limp Gawd

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    Not sure what the truth of it is, but the answer is right in the news post: (relevant part bolded)

    Now I'd like to know how a 10% tariff causes shortages enough to raise prices by 80% and why that price increase does not cause an increase in supply, sufficient to bring it back down to something closer to the expected 10% increase.
     
    Last edited: Aug 12, 2018
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  15. theBrownLlama

    theBrownLlama Gawd

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    geez, what BS.
    just get your steel supply from Japan then. It's just slightly more expensive. In these volumes, it is insignificant. Even steel workshops in South East Asia import as much from Japan as from China.

    possible reason could be that their bank now refuses to do business with their Chinese partner, due to sanctions. The sudden lack of credit facility and insufficient cash would indeed force a company shutdown on short notice.

    with enough cash, they can switch things around in a couple of months though.

    so, pretty much it's the owner's fault for taking everything out of the company whenever they can , rather than leaving some liquidity to buffer against regulatory risks
     
    Last edited: Aug 12, 2018
  16. Rizen

    Rizen [H]ardForum Junkie

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    They're not buying steel, and if you didn't bother to read the article or thread (which you clearly didn't) then maybe you shouldn't post.
     
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  17. Mav451

    Mav451 [H]ardness Supreme

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    Looks like Paul's Hardware took the bait lmao. Just a few minutes of due diligence would have a went a long way, but hey - YT personalities. What can I say.
     
  18. pcgeekesq

    pcgeekesq [H]ard|Gawd

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    The way the US bankruptcy code is setup, a smart business person can use it to maximize their personal income at the expense of their customers, suppliers, lenders, and stockholders. And then do it again a few years later. All in the name of giving people a second (and third, and fourth, and so on) chance.

    Is that what happened here? Could be. How much did the head of CaseLabs pay himself and his cronies this year?
     
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  19. MrDeaf

    MrDeaf Limp Gawd

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    IMO, Caselabs had stiff competition from the well established makers recently and have failed to grab market share outside of extremely boutique and niche cases.

    I don't think they are badly designed or anything.
    They are simply uninspiring, expensive and very niche.

    If the cases were "RGB and Glass pretty", they might have stood a chance despite their prices, but their lineup looks very dated by today's "standards".
    What's more, their cases seem to be really well built, so I think most existing owners would opt to have the internals swapped, rather than their case.
    Oh, and their high price makes it really difficult to recommend to other people.

    Like, how much does Corsair's Halo product, Obsidian 1000D, cost?
    And then how much does Caselabs Halo product, MAGNUM, cost?
    And which one looks like a case for a PC you'd get as top prize in a contest?
    And which one looks like a server that hosted all those matches at the contest?
    Yeah, it's going to be the Obsidian 1000D that gets all the attention.

    Now, yes, I do understand that there is a niche for minimalist looking, functional cases, but honestly, I think Fractal Design has that segment well covered.
    If not FD, it's either Silverstone, NZXT, Tt, Corsair or Lian-li.
     
  20. B770

    B770 [H]Lite

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    remember back in the 1950,60,70 when there were hundreds of thousands of jobs in the US and you could get "almost" everything built in the USA? T.V.'s, cars, washers and dryers, stoves, fridges, damn near everything was made here, everybody that wanted to work had a job. Then corporate greed kicked in and thousands of factory's closed and went overseas( CHINA ) the company's that did stay simply could not compete and went under. Bringing those jobs back to us is/was never going to be easy. We as a nation have been taking it in the ass for 30+ years from the rest of the world..how? by them having tariffs against us and us having none or very few against them. So now we FINALLY get a leader who is more worried about us than what the rest of the world wants and because he stands up for us he gets shit on..... yes there will be growing pains until the US gets back on its feet from a infrastructure and manufacturing standpoint, but when it does get there once again jobs will be literally everywhere and most things will once again be made in the USA.

    It was going to happen sooner or later anyway, as the average oversea(china) workers will no longer work for pennys a hour. they still make far less than the average US worker, but not even close to what they made 25-30 years ago. taking into account the cost of shipping the goods and within the next 30 years the profit margins would have made it cheaper to get a "local" source anyway. the cheaper to build it overseas business model was never going to be sustainable over the long run, they got a good 30-50 years out of it and the writing is on the wall for it now. my grandkids will probably reap the rewards of the current reversal of outsourcing manufacturing jobs overseas.
     
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  21. kitsura

    kitsura n00b

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    I came back from lurking just to post this. Those of you who are slamming Caselabs for selling expensive overpriced cases have obviously never seen Soldam (Windy) cases from Japan. At least Caselabs stepped in to fill the void once Windy closed down. Now there is no one left after Caselabs. And I don't consider the Corsair 1000D as a viable alternative to anything Caselabs ever had.
     
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  22. B770

    B770 [H]Lite

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  23. theBrownLlama

    theBrownLlama Gawd

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    what, they buying rare earth metals? Steel , alum, zinc-alloys etc , and the hundreds of grades in between = interchangeable in this context
     
  24. theBrownLlama

    theBrownLlama Gawd

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    that's what i speculated as well. No more cash in the company or a classic overleveraged position where bankruptcy is better for the owners than pumping in more money.

    they must have analyzed that the brand and potential future sales , is just not worth the extra .

    (liquidators might sell of the brand though.)
     
  25. LBJM

    LBJM Limp Gawd

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    Caselabs should have stopped using cheap Chinese materials and labor to sell their over priced crap.
     
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  26. aokman

    aokman Gawd

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    Sounds like bullshit, they could ship direct to customers from China and avoid the Tariffs.
     
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  27. RogueTadhg

    RogueTadhg [H]ard|Gawd

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    Man. that sucks.

    Their cases are the European Exotics of the case world.
     
  28. tetris42

    tetris42 [H]ardness Supreme

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    I'm still not used to these debates where the two sides don't agree on reality.

    I think this is more of a "the enemy of your enemy ISN'T your friend" situation. You're talking about generations benefiting from a globalist end game. So far, I've seen the "end game" of globalism being products produced as cheap as possible, money flowing overwhelmingly to the top, maximum extraction of resources, and sweatshop labor becoming the standard. Just because the tariffs aren't likely to solve any of that, doesn't make the alternative good either. What end game are you seeing?
     
  29. Guys, c'mon.

    Case Labs went bankrupt because nobody bought their cases. Simple as that.

    The only thing good about their cases was the built-quality (and only if you liked industrial-finishing). Their design wasn't inspiring, their size wasn't optimized and their price was ludicrous all things considered.

    This is the example of brand failure:

    attachment.jpg

    This, on the other hand, is a very expensive case that sold very well:

    DAN-Cases-001_1280x1280.jpg

    A computer case is not simply a rack in which you place your stuff. Some of us want a good looking piece to have over our desks. For me a $500 case is completely acceptable, so long as it is well built AND looks good. Something I could never get with a Case Labs, but something I got with my NCASE M1.

    Of course, I'm not an average user since my keyboard alone is worth $500 (and more if you add the extra keysets I have). But still, many computer "geeks" can afford expensive stuff... but they need a good reason to do so. Ugly stuff won't cut it unless you want a piece that is purely functional... but even then there are better options than Caselabs, that are in stock, for a lesser price.
     
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  30. theplaidfad

    theplaidfad Lurker

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    I know what I said was a pipe dream. The end I see isn't pretty from what we have to work with, so pretty much what you said
     
  31. Mugato

    Mugato Muh Feelz!

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    Respectfully, disagree. What happens when all of a sudden (oh yes these are in place, we were hit with 25%, so a BIG number) when the stock you use for collateral to pay your bills you can’t afford or get a hold of because stock was bought out before more tariffs hit?

    Be prepared to pay a little more for electronics, with specialty items becoming more rare. There is a worldwide shortage on the IC / component stream, leadtimes for some items in the 50 week area, these dont help things.

    I support the president, have since he announced running but these hurt, I am hoping for the long game here. China cannot overtake the USA so at least he’s doing something about it.
     
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  32. MNKyDeth

    MNKyDeth Limp Gawd

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    I had bought a ST10 several years ago. It's basically the bigger brother of the Merlin SM8. Smoked window and the power supply bracket to fit the power supply inside the case. This allows up to two 480 and one 360mm res to fit inside the case without any add-on pedestals.
    They discontinued the ST10 rather quickly as the SM8 was far more popular. I think I spent around $700 for the case and all the accessories that I wanted for it.

    A year or two after that I grabbed a Mercury S5 case for a micro ATX build. Went with clear windows this time and bought all the accessories I wanted. At the time I think I spent about $400.

    Prices might seem expensive.... But I won't ever need to buy any other cases for the rest of my life unless they change the ATX spec. And the ST10 supports the extended board spec. The S5 was designed for micro ATX but it can also take a board larger then the normal micro spec.

    I didn't read all the posts in this thread. Just wanted to post what I have... What I spent around.... And not regretting a moment of it. Love my cases! And I know with all the accessories I have for them I'll be set for whatever and however I want to do my builds with them for the foreseeable future.
     
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  33. Mugato

    Mugato Muh Feelz!

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    See my other post, no more free rides for China (I believe the short term end goal is pressure on NK). At least he’s doing something, which is 1000% more than any regular politician would.
     
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  34. Could you please explain this in more detail. I'm not sure I understand.
     
  35. There are mass production cases that are in that price range and even more. CaseLabs made some nice, high quality cases that would last through build after build, with their larger cases being the ones that caught the most attention. With that said, if people would read, one of their main clients defaulted, CaseLabs had stated some time ago they would be raising prices at some point to cover new material costs, however I am not sure that ever happened, but CaseLabs was more of a small side venture for them as their main money maker was design etc and other smaller integrated cases for other industry. One of those clients defaulted and is what made them go under, the tariffs and as such shortages of material went up and killed almost all profit being made, but they were able to keep going, the default was what killed them because of the time it happened at.

    Most cases were almost always on back order, as they were small runs, but far from not selling, most normal orders sold out right away and because of demand custom orders took sometimes months to be filled. But they stated they would never be a large high production MFG.

    Many people also don't understand most of these cases were massive and not something many people were going to be into, they did get into the smaller and micro cases, which I think sold quite well for them.

    That is a full tower next to the CaseLabs case:

    20ud0ya.jpg
     
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  36. SparkedFire

    SparkedFire [H]ard|Gawd

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    Using the tariffs as an excuse to shut down, or lay people off is nonsense. Most products I deal with are entirely made of metal. Those manufacturers are only increasing pricing by 5-10% and that includes labor, insurance, freight and metal increases. Even if your product is completely metal, it only makes up a small portion of your cost. Everyone understands what’s going on and just pases the cost on.
     
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  37. LuxTerra

    LuxTerra Limp Gawd

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    Since you don't bother reading...

    I've consistently said it's a complex issue and it's unlikely that tariffs alone did them in, but it almost certainly had an impact. It could have been the straw that broke the camels back. Without actual data, we have no idea.

    We don't know anything about their existing contracts, supply chain, previous debt load, profit margins, etc, etc. A tariff certainly cuts into margins and a lot of manufacturing has margins below 10%. Even niche manufacturers sometimes do because they can not purchase at the quantities required to get those prices or take advantage of efficiencies of scale. Also, a 10% tariff doesn't not mean that the price of all aluminum alloys goes up by the same amount. It's sort of the floor for new pricing, but large manufacturers often started stockpiling and that can drive the price of specific products well above the 10% tariff, even to integer multiples of the original price.

    For example, I make beer at a 1 barrel volume (split multiple ways) and I can tell you that even at that scale, my ingredient costs are significantly higher even a 15 barrel craft brewery, let alone a massive commercial brewery. It's illegal to sell since I'm not licensed, but I really could never turn a profit margin at those prices. Retail markup on craft beer is about 7:1 which is why craft breweries love selling direct in their tasting rooms. However, my beer is still a third to half the price of commercial.
     
  38. WaltC

    WaltC [H]ard|Gawd

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    Caselabs has been failing for years. Everyone who goes BK blames it on someone else--it's never their own fault--why, they had nothing to do with it, in fact. "Tariffs" is just a terrible excuse...really near the bottom, imo. Anyone who thinks it's a good idea to drop the current American tariffs evidently thinks it's a good idea for the other nations to put tariffs on our goods sold in foreign markets--as they have been doing for many years--tariffs imposed by the Chinese, the EU, etc. What these American tariffs are designed to do is to force these other countries to drop their tariffs on our goods-duh. About time, too. The goal is 0 tariffs in both directions! That's the only kind of free trade there is, imo. Once these other nations see that we are serious they will definitely capitulate on their own tariffs--we have made some progress already with the EU, China is next...
     
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  39. Mugato

    Mugato Muh Feelz!

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    There’s another post here that’s quite good as well, there is a lot going on and we do not have much detail. But! In my experience (as was stated in this other post as well) profit margins are very low for manufacturers, often below 10%, many of them lease equipment but purchase inventory with cash. Where does that cash come from? Lines of credit, initial investors, loans against any equipment owned, and loans against inventory. That one is important, if you use all of your inventory, and can’t get more with the cash you have due to inflated prices or competitors buying it all up because tariffs might hit, you can’t pay the bills man. They have to report inventory levels weekly most likely, the bank will look at this and not extend further credit.

    It’s a ton more complex than this and we have little info, and I totally agree something else could have been the problem, just saying it hurt our company and ran a shockwave through our industry. Honestly, running that close to the margins (and it sounds like they use high grade alunimum which is much more expensive and procured outside the chinese market usualllly) you can stay afloat for a while - hell years - but something like this could do a company in.
     
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  40. Rizen

    Rizen [H]ardForum Junkie

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    Funny how the people that repeat this drivel are never actually economists, hmm.
     
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