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Dinner up High

Bruce Krasting's picture




 

Sadly, I’m not on anyone’s A list for a holiday party. I was fortunate
enough to get an invite to a swell dinner bash in the City. A nice lady I
know (who has no interest in men) needed a date. The thinking was that I
would not make a hash of it, so I got the nod.

I was in that enviable/unenviable position of not knowing anyone. There
is only a dozen, so I schmooze as best I can. The place is filled with
NY types; lawyers, bankers, buy-side types, RE sharpies, art dealers, ad
execs, a few (very busy) wives and one degenerate blogger. My kind of
crowd. The hostess gives me a quick tour of the place, (30th floor,
three bedrooms, view of the park) and drops me with the ‘guys’.

Normal banter from the boys.

“How much money has been lost in the past six weeks betting on NY football teams?”
Answer: Staggering.

“Is Cialis really better than Viagra?”
Answer: It depends. For a quicky Viagra is fine.
For something “special” Cialis was a better choice. I was surprised that
a cost benefit analysis was part of the discussion. Apparently Cialis
is up to $22 a pop and Viagra is still only ten bucks. Of course no one
had any first hand knowledge on any of this, it was all “I’ve heard” or
“I read”….

“How’s business?”
Answer: Fucking great. This is not a crowd that brags. They don’t really need to. So you had to read into the words; “We were very pleased” or “Best year since 06”. My favorite; “Lots of smiles at bonus time at my shop”.

“What’s 11’ looking like?”
Answer: Fucking great. While this group is a very small
subset of the economy they are seeing plenty of opportunities. They are
hiring, expanding and acquiring. They all have full plates for the year.
This represents a significant change from two years ago.

“What about Obama?”
Answer: Deep disappointment. Keep in mind that it is this
crowd who gave Obama hundreds of millions a few years ago. The attitude;
“He took his eye off the ball on the economy and wasted his first two
years on health care legislation that we will never see” summed up the
feelings.

I (of course) pushed my hot buttons.

“What about QE?”
Answer: It’s good for the market. Nothing else matters.

“What about the sorry state of municipal finance?”
Answer: It’s all priced in.

“What about the deficits?”
Answer: They don’t matter. It’s all priced in.

Dinner was a bunch of courses. Something for everyone. This was not
family style. I did my best with which fork to use and when. The small
talk was over my head.

“Alta or Vail this winter?”
Answer: Vail. Apparently there are no go good restaurants in Utah.

“Was Bloomberg bluffing when he said he was not a presidential candidate?”
Answer: He was bluffing.

“Should one consider full body scans?”
Answer: Absolutely not. Most either had done this or knew
someone who had. The conclusion was that if you did the scans the
results were 100% certain that they would find something. Interesting
state of denial

“Is Sara Palin for real?”
Answer: Yes. While they expressed fear and loathing
they also recognized that the level of disappointment in the country
with Obama and the Democrats was likely to bring a very different
candidate in 2012.

One fellow actually had a very good rep. Been in the investment biz for a long time and damn good at it. Someone asks him, “Is investing overseas still the right strategy?”. He wisely dodges the question with an obvious answer, “If you don’t have some non US exposure you’re not wisely invested.” Another who was looking for some free advice asks the follow on, “Yes, but which country?” He answers, “I focus on the countries that have the highest work ethic.” This last comment prompts a conversation that lasts through coffee.

The talk was about which countries ranked high on that list. This was
not about which worker produced more. The answer to that is easy. A
worker for VW in Germany produces much more than does a worker in Viet
Nam. However, the conclusion at the table was that on the narrow issue
of work ethic, Vietnamese workers had a better attitude than German
workers.

The general question of East versus West was sort of dismissed. The
obvious answer was East. The more interesting debates were on the
narrower questions:

France – Germany? Easy for this group.
Italy – Spain? Not so easy.
UK – France? Harder still.

How about China versus India? That’s a tough one. Harder still, Taiwan
versus Korea. Israel ranked high. Some Eastern European countries made
the final list. Russia was dismissed on the issue of work ethic.

Brazil confounded the group. Everyone recognized the rising tide for
this country. But on the work ethic issue Brazil was not high on the
list.

The diners did not fall prey to the stereotype of workers from Latin
America. Too many of us had worked, lived or done business in that
region to make that mistake.

This was all just “dinner talk”. I found it interesting. I’m not going
to publish the list we came up with. I think the readers can do that as
well as we did. There is a level of arrogance to this type of ranking.
Some of the biases we brought to the discussion no doubt tainted our
conclusions.

On the ride home I thought of the evening. I had hoped that there would
be something interesting to write about. My first thought was that there
was not. Just a nice dinner, nothing memorable. But later I reviewed
the list we came up with and I was struck by what was missing.

This group of relatively sophisticated, well-traveled and knowledgeable
people spent an hour 300 feet above the lights coming up with the
country comparisons. America was mentioned and compared on a number of
occasions. But the final list did not include the USA. If the elitist
don’t think much of our collective work ethic, what does that mean?
Answer: Nothing good.

 

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Thu, 12/30/2010 - 22:42 | 838946 RunningMan
RunningMan's picture

If everything is so good for these folks, then why does it feel like this year ended in the abyss and 2011 is looking like the long dark of Moria? I guess maybe my name ended up on the wrong list or I don't know enough elites to get a fair crack at all the FRNs flooding the market. America isn't on the list because all the opportunities to work hard and realize the american dream have been diminished through the creation of a welfare state for the voting masses, the destruction of the middle class, and continued largesse for those who have a seat at the table.

Thu, 12/30/2010 - 19:32 | 838705 TeresaE
TeresaE's picture

Thoroughly enjoyed your recap.

 

Some notes.  There was not a productive-economy, real job producer in the bunch.  Of course their outlook is rosy!

 

We continue to follow the elite and view their experience as the "average" for America.  Which would be great if the Bell Curve wasn't reality and our country (and the world) consisted entirely (or nearly, I'll give a quick exception for our dog-walkers and toilet scrubbers) of over 100 IQs.

 

Sadly, these elite continue to believe the lower dregs of society don't exist, aren't growing and most definitely don't vote and garner tax dollars to survive.

 

How much longer can the "average" elite continue to pretend that having 50%+ of Americans drawing at least part of their survival (or wealth) from the government won't/can't touch their standard of living?  I know it's worked well up til now, but things change even if nobody wants to admit to it.

 

That is the real question we all should ask our friendly neighborhood upper-class guys. 

 

Of course, we won't, cause we truly don't want to know the answer to that question as it would portend the end of such wonderful holiday soirees.  Well, the end of ones like this, I'm sure the Rockefellors, Clintons, Bushes, Pelosis, Hunts, Gates and the like will still be having them somewhere. 

 

Probably not within our borders, but hey, the good life is good.

Thu, 12/30/2010 - 18:20 | 838600 greenewave
greenewave's picture

Bank of America is a Public Disgrace and Should be PUT OUT OF BUSINESS!! The BANKING ELITE have cost TAXPAYERS TRILLIONS in FUTURE BAILOUT MEASURES and the AMERICAN PEOPLE are SUFFERING!

To find out more about the TRUTH of the recent MORTGAGE SCAM, watch the YouTube video “BANK OF AMERICA ~ A PUBLIC DISGRACE” at (http://www.youtube.com/watch?v=cXDpOBOS94A).

Anonymous-

This is absolutely appalling and I am dumbfounded why the American people aren’t RIOTING in the STREETS as we speak. Thw civil and political unrest we’ve seen in Europe is without a doubt coming to the United States!

Bend over America and enjoy getting SCREWED by the BIGGEST BAILED OUT BANK in the Country!!

Fri, 12/31/2010 - 00:50 | 839056 merehuman
merehuman's picture

junked you for shameless advertising yourself.

Thu, 12/30/2010 - 22:15 | 838920 Hulk
Hulk's picture

Son of Grand Supercycle...

Thu, 12/30/2010 - 22:51 | 838960 halvord
halvord's picture

One aches for Ned.

Thu, 12/30/2010 - 18:08 | 838557 virgilcaine
virgilcaine's picture

It's fair to say QE has been good for the Elites and they don't realize it. Enjoy while it last folks.

Sounds like a nice Eve. though, thks for your work Mr. Krasting. I agree , Nothing is priced in until it is. 

Thu, 12/30/2010 - 17:00 | 838457 Ted K
Ted K's picture

Not as good as your Connecticut dinner post, but still a nice change of pace. I'm always hoping you'll gouge their egos David Letterman style after some drinks Bruce, but then I guess we wouldn't get the next year's dinner column if you pulled that stunt.  Hope you have a Happy New Year's Brucie.

Thu, 12/30/2010 - 16:49 | 838427 What_Me_Worry
What_Me_Worry's picture

Sounds a lot more interesting than my dinner/xmas parties way down here in the upper-middle class.  They don't even know what QE is and the most interesting question on investing I got was whether they should be buying GM(obv, a no).

Nearly everyone I talk to is an engineer or sales to automotive here in Detroit.  Everything is rose-colored through their eyes in the auto industry.  Everyone is buying houses on the ask, again.  Everyone is buying every new and shiny toy, again.  They are back to 2006 thinking.  

It would have been interesting if I would have brought up that I just stocked my basement with long-term storage food.  All of these parties are reminding me of how different I am becoming now that I can see what is coming.  

It's like The Sixth Sense, now.  I see (financially)dead people everywhere.

Thu, 12/30/2010 - 19:55 | 838738 penisouraus erecti
penisouraus erecti's picture

"It's like The Sixth Sense, now.  I see (financially)dead people everywhere."

++ Love that line....have a feeling I'll be stealing it!

Thu, 12/30/2010 - 17:57 | 838560 dark pools of soros
dark pools of soros's picture

actually it is an inverse to what strippers deal with.. they feel they are morally absent so they stay away from the herd..  folks around here see the herd as financially absent so we too stay away into our own flock of same feathers

Thu, 12/30/2010 - 16:43 | 838409 DeltaDawn
DeltaDawn's picture

I have realized someone who independently trades like myself has freedom to go into gold if spooked. The IBs I know have to sell the market and be in the market, it is their job. You cannot be a vegan and sell pork for a living.  They will be the panic sellers who sell right before their customers call up asking to sell.

Thu, 12/30/2010 - 16:11 | 838323 velobabe
velobabe's picture

happy holidays, bruce. your great, this is coming from a

TAD, trashy woman.

Thu, 12/30/2010 - 15:39 | 838260 linrom
linrom's picture

Do elites read ZH?

Thu, 12/30/2010 - 16:13 | 838327 velobabe
velobabe's picture

who cares!

Thu, 12/30/2010 - 16:13 | 838324 velobabe
velobabe's picture

who cares!

Thu, 12/30/2010 - 15:28 | 838232 thegr8whorebabylon
thegr8whorebabylon's picture

You're on my A list, Bruce.  More of the same please....chainsaws and musings on the end of an empire.

 

And, wasn't the last act always looting on the way out?  Maybe that's what's priced in.

Thu, 12/30/2010 - 15:22 | 838216 JustACitizen
JustACitizen's picture

Hmmmm...just looked at that picture again. In the future avoid the Chardonnay - the serfs may be pissing in it.

 

BK - did you ever wonder about why folks castigating other's work ethics have no higher ambition than to do as little actual work as possible? I mean seriously - they want to have the wealth to pay others to do their work for them...

Thu, 12/30/2010 - 15:15 | 838199 onlooker
onlooker's picture

Sounds like a most interesting evening without having to worry about getting lucky.

Thu, 12/30/2010 - 22:12 | 838916 New_Meat
New_Meat's picture

relaxing, since was original premise ;-)

Thu, 12/30/2010 - 14:45 | 838144 JustACitizen
JustACitizen's picture

Most of us in "flyover" country are on "fixed incomes" at best or declining incomes at worst. I am reminded of a UC MBA I once knew - some of his answers to a challenging business environment: "it's easy" and my personal fav "it's a no-brainer". It wasn't easy and it wasn't a no-brainer - the challenges just required work. Needless to say - it did not turn out well - but he was off to contaminate another business.

Thu, 12/30/2010 - 14:37 | 838131 wang
wang's picture

those on fixed incomes in flyover country must be pleased with this small glimpse into how their subsidies to the banksters are being spent

and of course the glimpse you provide is but a faint shadow of the banksters' lifestyle

Thu, 12/30/2010 - 14:14 | 838082 TruthInSunshine
TruthInSunshine's picture

Bruce,

You should ingratiate yourself with that 'tightly knit group,' and then pitch a pilot of 'The Real Housewives of Aspen' to Bravo...

...you know, where the women do fun things, while the au pairs and nannies raise their kids...

...and their husbands are off banging their secretaries and the au pair.

Thu, 12/30/2010 - 16:11 | 838317 velobabe
velobabe's picture

S P O T  on, i got a lot of dirt on their husbands.

Thu, 12/30/2010 - 16:37 | 838386 DeltaDawn
DeltaDawn's picture

Were you a secretary, au pair or professional?

Thu, 12/30/2010 - 17:17 | 838485 velobabe
velobabe's picture

professional velo babe†

Thu, 12/30/2010 - 13:59 | 838042 piceridu
piceridu's picture

Bk, I'm happy to hear that you aren't on anyone's A-list...says a lot about you. Great stuff as usual, thanks.

Thu, 12/30/2010 - 13:55 | 838034 JustACitizen
JustACitizen's picture

And these are the same people that think they deserve something for all of their "efforts"?

I would love to hear how they view their own work ethics - sitting on my ass, watching the electrons go by - waiting for my latest insider tip.

Thu, 12/30/2010 - 13:40 | 837989 Hook Line and S...
Hook Line and Sphincter's picture

Bruce, I was at that party. Your fly was open the whole time and we knew you were a no-good, trouble making blogger from the lower end. You also had toilet paper on your shoe.

Thu, 12/30/2010 - 13:21 | 837936 tamboo
tamboo's picture

ymmv but i've found that 1/6th of a viagra pill works just as well as a larger dose so 40 pills becomes 240 doses. :)

Thu, 12/30/2010 - 13:51 | 838023 dark pools of soros
dark pools of soros's picture

like LSD, your environment greatly affects your experience

Thu, 12/30/2010 - 13:15 | 837923 DR
DR's picture

"If the elitist don’t think much of our collective work ethic, what does that mean?"

Collective work ethic-is that code word for austerity?

The elite of the US loathes their own citizens-a class war is coming and my bet is on a win for the peasants.

Thu, 12/30/2010 - 15:38 | 838255 linrom
linrom's picture

Vietnam--the country with the lowest labor cost. Why would worker productivity in US matter: this is not a producer but a consumer nation! Those guys are simply looking at US as a place to off-load whatever they're selling or scamming.

Thu, 12/30/2010 - 13:50 | 837884 Sisyphus
Sisyphus's picture

So, go long?

And what about gold? No discussion about gold?

Now, since business is fucking great, 11's gonna be fucking great and everything is priced in, any second thoughts about your predictions for 11?

I was at a car dealership the other day to service my car. On the ride back home on a shuttle, I listened to the discussion between another rider and driver of the shuttle. The questions centered around economy and if it is coming back; how the business is doing and if people are buying cars. The person driving the shuttle mentioned that they had had a Christmas diner at the owner's house just a few days back. And in that dinner, they were told by the owner that 2010 has been the best year in the past 30 years they had been in the business. And this is Michigan. Ground zero for almost everything. I know this is just one data point, and there could be a multitude of reasons for the dealership to have had the best year thus far, but it could also point to the animal spirits returning. And that could mean only one thing, the markets sky rocketing higher. Anybody shorting be careful.

Thanks for your wonderful articles, Bruce. By the by, what happened to the lady from Ohio. Did your initiative finally land her with a job?

 

Fri, 12/31/2010 - 14:36 | 839850 Dantzler
Dantzler's picture

I was at a some what lower rent party last night (a friend is living in a house where the owner is in default, no heat or electricity). A car salesman in the Seattle area said his earnings this year were half-again more than last year. I asked if cash for clunkers had anything to do with it and he thought it may have affected sales positively. He sells Minis and the stock manual model gets 39 miles per gallon.

Always amusing to hear about Cialis vs. Viagra. The $2.1B acquisition of ICOS has turned out to be quite a boon for Lily. It was a pretty bitter experience for me & my colleagues back in '06. My current company is doing extremely well, but I can't say it has been a great year in biotech in Seattle. We lost Zymogenetics and Trubion this year to acquisitions. So far the Trubs still have jobs but the Zymo folk are not so lucky.

Bruce, thanks for the articles--I always find them informative and props for being willing to make specific calls in your recent 2011 piece.

Thu, 12/30/2010 - 16:36 | 838383 DeltaDawn
DeltaDawn's picture

There is a feeling in the air that the ball is about to drop. Personally I have had the urge to drain any dollars out of my bank account due to the dollar losing value.  I have given more to charity, stocked up on supplies and thought about buying a new car..."may become difficult to get equal quality down the road" I rationalize. It would also make me feel good temporarily. 

Thu, 12/30/2010 - 12:55 | 837848 Mercury
Mercury's picture

"It's all priced in"

"It's good for the market"

"...the elitist don’t think much of our collective work ethic"

At least one of those things can't be true, given the other two, my bet is on the first.

In the HBO version the sullen daughter from Columbia will come back early from her date and call you all racists for being judgemental about something so bourgeois as the work ethic.

Thu, 12/30/2010 - 12:31 | 837790 the grateful un...
the grateful unemployed's picture

was given a ticket to a hi-end broker presentation several years ago, equity sell side, the brokers technical analyst, highly respected, back when tech analysis worked, did a full hour on the hot group of the moment, hi beta utility stocks, Calpine, and Duke and yes, Enron. When I looked at the same charts I saw trouble. What's different from then is the promise of economic growth. Everyone believed in growth. Not only were the utilities adding capacity, (the housing market was strong) but there was growth in band width, the wiring of America. We were ignoring (old fashioned) infrastructure, (including the power grid, but they were sure that the government would upgrade the nations power lines) and replacing it with high tech solutions, (many of these utilities had local and regional solutions to power needs, stand alone, etc) and that was okay, heck it was preferable. We didn't need government solutions, the economy would grow itself, and find solutions. Investors assumed that would always be the case.

When you say business is good, that doesn't say the same thing, does it?.

Thu, 12/30/2010 - 12:07 | 837712 cdskiller
cdskiller's picture

Bruce, I look forward to all your contributions, but these posts are my favorites. Like a voiceover narrative of a detective in a noir film set in the high finance world. Here's wishing you find yourself on A-lists this coming year. 

Thu, 12/30/2010 - 23:20 | 838983 StychoKiller
StychoKiller's picture

"She had legs from here to there, and back again!"...

"You do know how to whistle, don't you?  You just put your lips together and blow."  -- Lauren Bacall

Thu, 12/30/2010 - 13:10 | 837907 DB Cooper
DB Cooper's picture

I always like Bruce's posts.  This one is a little like "Catcher in the Rye".  Thanks Bruce.

Thu, 12/30/2010 - 15:27 | 838230 knukles
knukles's picture

Catheter in the Wry?

Thu, 12/30/2010 - 11:59 | 837693 Boilermaker
Boilermaker's picture

..."Sadly, I’m not on anyone’s A list for a holiday party."

Bruce, you should take this as the highest compliment!  The "A list" is a morally corrupt group of purse snatchers.  You're better than that.

Thu, 12/30/2010 - 11:52 | 837674 Husk-Erzulie
Husk-Erzulie's picture

Interesting vignette, thank you.  Were we to infer that you were the degenerate blogger?  The Viagra/Cialis conversation is amusing as hell...  :-)

Thu, 12/30/2010 - 11:47 | 837662 downrodeo
downrodeo's picture

Bruce, thanks, that was a good read. What was your impression of their impression of the degenerate blogger?

Thu, 12/30/2010 - 12:03 | 837705 Bruce Krasting
Bruce Krasting's picture

Actually I lied. I said I was a writer. Doesn't that sound better?

People like writers. They don't like bloggers. At least that has been my experience.

I was asked where I put stuff up to read. I said Zero Hedge. Most said "Huh?". That said, the lawyers, bankers and buy side types were all familiar with ZH. They wanted to know if I had met Tyler Durden. I said that I had and that actually "he"  was a young and beautiful woman.

But then I said, "just kidding". They are still wondering.

Thu, 12/30/2010 - 23:40 | 839001 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I heard Tyler Durden is seven feet tall and once pitched a no hitting against the Federal Reserve Baseball team.

Thu, 12/30/2010 - 20:01 | 838755 Fred Hayek
Fred Hayek's picture

Oh man, what a wasted opportunity!

You should have gone with the Meatloaf/Robert Paulsen response, whatever it was in the film. 

"He sleeps one hour each night and has reconstructive facial surgery to disguise himself every three years . . "

Thu, 12/30/2010 - 18:16 | 838596 downrodeo
downrodeo's picture

Haha! Good on ya!

Thanks again for your consistently concise and cogent reporting. Tell the critics to take a hike. In the age of celebrity journalism and perverse surreality programming, blogs may be the only source of actual information left. Thanks again for your dedication.  

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