Stock is Falling, Number Two

Kind of a two-part entry here.

ECONOMIC UPDATE:

First of all, I've been reading a book by Barton Biggs called "Hedgehogging" off and on for the past year or two. It's an account of Biggs' efforts to raise capital and run a hedge fund, and consists mainly of anecdotes about the hedge fund space and various characters he met who inhabit that space. Biggs changed the names of the characters to protect the innocent, but I came across the passage below (not a sexual reference, no matter how jacked I get reading about finance and investing) which I found especially poignant considering the book was published in 2006. This passage was uttered by "Vince", who is referred to in the book as the Bearded Prophet of the Apocalypse:

"Stocks will fall a lot further. They are still too expensive. The U.S. economy will be slow for years; too much debt, too little savings, inadequate retirement provisions. Residential real estate is the next big disaster. People are borrowing short to invest long, refinancing mostly with floating-rate mortgages. When short rates go up, debt service payments will soar and house prices will decline. Then the consumer collapses from the double whammy of the wealth effect and shrinking disposable income. It's called civilization exhaustion, and the beginning of the decline and fall of the American empire.

"Furthermore, another bubble is about to burst. Existing home prices have been rising 7% to 8% a year, financed by Fannie and Freddie. Luxury real estate values from Park Avenue to Beverly Hills and from Southampton to Aspen will collapse. In the aftermath of every burst financial bubble in history, paper wealth of all types evaporates. It was created out of thin air, and it will be blown away like mist in the wind. The price of the average luxury condo in Tokyo fell from US$1.2 million in 1990 to US$250,000 last year. In the 1930s, the price of art fell 80%. Oriental rug prices collapsed. Delayed backlash effects are always the same. Why should it be different this time? Secondary consequences take time - years - to happen, particularly when central banks cut interest rates drastically and flood the system with liquidity. But they can only be postponed, not averted. In three years, the American economy will be in a depression, the S&P 500 will be at 500, and there will be a revolution in America. It could be a fascist revolution like Germany in the 1930s."

The S&P closed at 735.09 Friday, and at last check people still seemed to have some faith in the government and in newly-elected President Ba-Rah-Rah Obama, but it looks like this Vince had an idea of what he was talking about. The author did point out, however, that the mysterious Vince had "predicted nine of the last three recessions", so maybe we won't end up speaking German after all this is said and done. But now onto more troubling matters.

DATING UPDATE:

This being 2009, the Year of Benetton, I went on a date the other night. It was a first date, and as is the norm these days, it was of the online variety. Our plan was to go to dinner, but we decided to meet for a drink first. I wanted to do this (1) to avoid having the bland "getting to know you" conversation while wedged into a table between two other couples who could easily overhear everything - we may as well just post a big red flag at our table that reads "First Date" - and (2) because this was a way to get an additional drink into her, as I subscribe to the Make Them Drink Till I'm Cute Theory of Dating. She agreed to meet for a drink first to help her figure out if she'd be able to stand my company for a longer period; if she hated me, she could pull the plug without having to suffer through the Sisqo CD and a whole meal of food.

Luckily I had all my pitches working that night, and I found this reasonably young lady to be clever and engaging. So we proceeded to dinner:

INTERIOR, RESTAURANT, SAN FRANCISCO:

A man and a woman sit at a table in the corner of a restaurant. They appear to be yuppies; their black overcoats are draped over the adjacent chairs and their high-tech telephones lay on the table. The man, OSCAR DE LA JOLLA, is nearly 37 years old, though he appears to be in his late 20s or early 30s due to his unwrinkled face and highly athletic build. He is wearing a fashionable button-down shirt with jeans, and has assumed an easy yet confident posture. He is clearly controlling the conversation. The woman, MELANIE, attractive with dark hair and dark eyes and dressed in all black, listens intently; she is obviously enjoying herself, and is beginning to look flushed due to a combination of wine and... other stimulation.

The flirtatious conversation is interrupted by a sudden burst of sound. The sound breaks the couple out of their rhythm and they momentarily appear confused, as if restaurant management has suddenly increased the volume of the restaurant's stereo to its maximum to play a popular song, perhaps one by Pink or Kelly Clarkson. MELANIE realizes that the sound is coming from her phone - it is her ringtone. She picks up the phone and peers at its LED screen.

MELANIE: Hmmm... I don't recognize that number...

MELANIE pushes a button on the front of the phone and lifts it to her ear.

MELANIE: Hello?

OSCAR glares at MELANIE, his face a combination of annoyance and disbelief.

OSCAR (to camera): Did this bitch really just answer her phone at dinner?

MELANIE begins an inane conversation with the person who has called her. After realizing MELANIE has no intention of ending her call quickly, OSCAR pulls out his cell phone and begins sending text messages - the first is to a buddy, telling him that the date will end early because MELANIE is currently on the phone and asking if the buddy would like to meet up later. The second is a "booty text" to an undisclosed female. OSCAR then proceeds to check his Facebook page, reviews NBA boxscores, buys a pair of jeans on Amazon, and runs a few searches for potential matches on the online dating website, using the search keyword COURTEOUS. Several minutes later, MELANIE finishes her call and addresses OSCAR.

MELANIE: So where were we?

OSCAR looks up from his phone, somewhat startled.

OSCAR: Huh? Oh, sorry. I didn't realize you were done with your call.

MELANIE: Oh, yeah, well, that was my friend.

OSCAR stares blankly at MELANIE for several seconds.

MELANIE: Oh! That wasn't rude of me, was it?

OSCAR: I'd say it was somewhere between very rude and extremely rude. I'm a pretty easygoing guy, and it's one thing to say "Oh, I'm sorry but I have to take this. I'll just be a second" and to wrap up the call quickly. But it's another thing to answer your phone on a first date, without even knowing who it is who's calling, and then to proceed to chat with this mystery person for five minutes. So yeah, I'd say that was very rude of you.

MELANIE: Did I just make a faux pas?

OSCAR: You could say that. In fact, you should say that.

And... SCENE!

(Wood Dog, let me know where to send the royalty check for stealing that SCENE! line. By the way, nice work on making two posts in a row. The sky is falling! The sky is falling!)

I have lashed out in the past about cell phone rudeness, particularly on public transit. However, cell phone use is so prevalent on public transit these days that its pretty much the norm. But have our societal manners eroded so far that it is OK to take a call at dinner on a first date? I haven't been on many dates since my return to SF, and this is a high-tech city, so is that what we're doing now? One of my prior first dates updated her Facebook status while on the date, but at least she had the common courtesy to wait until she went to the bathroom ("Jane is on the crapper and is also having a crappy time on her date"). My first question to myself was whether I liked "Melanie" enough to go out with her again despite the phone call, or whether that was a deal-breaker. Now I'm wondering if I'm the one who was being unreasonable by being annoyed in the first place.