Rumor has it that times are tough for Manhattan's "girlfriend elite."
Now that investment banking, proprietary trading and various other seven-figure Wall Street professions are losing a digit or two, funding is drying up for high-maintenance, extra-marital relationships.
During the go-go days (and nights) of the late nineties and early aughts, Manhattan's "kept women" enjoyed 5-star lifestyles. But the disappearance of over-the-top pay packages has crimped the economics of under-the-covers liaisons. As Wall Street's pampered professionals lose their perks, so do their girlfriends. Many of these privileged ladies must now adjust their lifestyles "down island," so to speak. The posh, Upper East Side digs of 2007 are yielding to Lower East Side lofts and studios.
Some of these gals are suffering such a severe drop in income and lifestyle that they are starting to resemble, dare I say, prostitutes. It's humiliating. Sadly, these voiceless victims of the financial crisis possess almost no recourse. Either they accept a cut in pay or choose a new line of work, just like their boyfriends must do. But the transition away from high-priced prostitution to less lucrative lines of work can be very stressful. And it's not easy for the girls to change their professions either.
Even the fortunate members of the girlfriend elite who have survived this initial wave of layoffs face new stresses. They must now carefully consider the security of their revenue stream, and contemplate a vast new range of potential risks. They must ask themselves, "Does my boyfriend work for one of the big banks or does he work for a hedge fund? If he works for a bank, is the bank receiving TARP funding? If yes, is my boyfriend's bonus 'contractually obligated' or discretionary? If no, can my boyfriend's bank survive without bailout monies? If my boyfriend works for a hedge fund, is the fund suffering from poor performance in 2008? Or, if the fund's numbers were good in 2008, were they also real? Who's auditing this thing anyway? Is the auditing firm reputable or does it operate out of a small, dingy office in Florida?"
Younger members of the girlfriend elite will also want to contemplate long-term economic trends, like the prospective path of the U.S. dollar relative to foreign currencies or gold. There's almost nothing more tragic than devoting a lifetime to backbreaking labor, only to accumulate savings in a fatally flawed currency. Sure, you get to keep all the memories from a career of faithful service, but what happens to your golden years?
So every highly compensated girlfriend owes it to herself to ask, "Would it be best to save money in dollars or euros or yen…or perhaps something more exotic like Brazilian reals?" After all, this is business.
"According to a survey by Prince & Associates, a Connecticut-based wealth-research firm, the average 'price' that men and women demand to marry for money these days is $1.5 million," reports Robert Frank in a fascinating column for the Wall Street Journal entitled, "Marrying for Love…of Money."
"The survey polled 1,134 people nationwide with incomes ranging between $30,000 to $60,000 (squarely in the median range for nationwide incomes)," Frank continues. "The survey asked: 'How willing are you to marry an average-looking person that you liked, if they had money?'
"Fully two-thirds of women and half of the men said they were 'very' or 'extremely' willing to marry for money. The answers varied by age: Women in their 30s were the most likely to say they would marry for money (74%) while men in their 20s were the least likely (41%). The matrimonial price tag varies by gender and age. Asked how much a potential spouse would need to have to be money-marriage material, women in their 20s said $2.5 million."
Let's think about this; $2.5 million seems like a lot of money. But it seems like a lot less money if you're a 20-year old facing a new cycle of hyper-inflation. Therefore, given the crisis of the last 24 months, and the Fed's inflationary response to that crisis, every forward-looking gold-digger has reason to wonder if $2.5 million is really enough…and whether the dollar is really the best store of value.
And one final note gals; PLEASE know your counterparty! Contracts ― both actual and implied ― are only as good as your counterparty. Specifically, examine the size of prospective "senior claims," like the divorce settlement that might ensue from your first chance encounter with Mrs. Investment Banker. Additionally, be certain that your counterparty has not issued multiple, redundant claims on the identical underlying asset.
The "Risk Factors" section of the prospectus may not include all the relevant disclosures.
A big thanks to Eric for stopping by. You know, Shooters, this is the exact sort of thing I love: An unflagging look at the world the way it actually works, not as we wished it worked.
True love? Bah! Economics! Every emotion has its roots in heartless natural selection; women with their precious eggs try to reproduce the fittest carriers of good genes they are able to attract with their endowments.
Sound mercenary? Tough. Things are as they are, not as we wish them to be. It's something a lot more of us are going to be learning the hard way in the ensuing months…
Now, as promised we'll address the umbrage brooked by some readers due to James Howard Kunstler's characterization of Glenn Beck and his followers:
Sir:
In his otherwise well written April 7, 2009 article, Strange Days, Mr. James H. Kunstler badly mischaracterized broadcast commentator Glenn Beck.
Mr. Kunstler says, "cheerleaders such as Glenn Beck on Fox News calling for the formation of militias....
To my knowledge, Mr. Beck has NOT called for "formation of militias", He has instead emphasized that we citizens who feel disenfranchised respond to our government's errors in a peaceful, non- violent manner.
Despite the many errors our politicians- of both parties- have and are making, despite their steering us into a Fascist society, they need not fear "the tattooed minions of Glenn Beck come a'calling."
Mr. Kunstler would do well to check out the facts before writing about anyone. He owes Mr. Beck an apology.
I sent your concerns along to Jim and here's what he had to say:
The new form of demagogic broadcast "news" is designed specifically to "stir up the animals" by presenting figures to model "angry" behavior. Obviously, it is a marketing ploy by the companies who present the "news." It is also a gross departure from the values and norms of broadcast news that had existed in an exemplary form of self-regulation until fairly recently
These new histrionics are pure emotional manipulation (for profit) and it is a kind of playing with fire. By the way, I regard the smug, sneering performances of figures like Keith Olberman and Rachel Maddow on the "Left" to be as disgusting as the wild-eyed hysteria of "Rightists" like Glenn Beck. The entire landscape of cable TV news has degenerated into a toxic swamp of hatred and anger. The consequences are apt to be very unpleasant as our social and economic woes mount.
We tend to agree on the big ideas about scarcity, commodities, commodity money and the inevitable failure of government. The particulars, however, can get a little hairy. Some of our letters to you are bound to insult some person or idea you hold dear. You are of course encouraged to let us know when we've upset you.
Now we turn our attention to the rest of the article…
Good Afternoon
After reading about Peak Oil and sources to replace it, I have to agree on several things.
I am a headhunter who works for several nuclear entities here in the U.S. as well as a hydropower engineering firm.
Our dams are already built, why not harness them for more power? It's clean, no environmental impact, except may be some fresh sushi from fish that get sucked into the turbines.
Nuclear is even better. It's clean and cheap and runs constantly. If you do your energy research and look at capacity factors and how long out of a day can the station produce power, then nuclear, geothermal and hydro are the best of the bunch.
Unfortunately, environmentalists see two out of three as destructive. But then, isn't anything? Environmentalists forget to talk about the birds that fly into wind turbine blades.
I do enjoy your columns and subscribe to a few for Agora Financial newsletters.
Well, thank you! And you're right; everything has a cost. Ain't no such thing as a free lunch as the old folks and physicists say. Everything has an impact and the circle of life is a chain of suffering and predation. But what can you do?
We won't let the lights go out without a fight. Our geologist and energy expert Byron King likes nuclear, geothermal and hydro, too. You can read more about that here.
Promise me you'll see what Byron has to say before you move into a cave and try to survive solely on air.
Gary ―
Hi! I like the Shots a whole lot ― thanks for the great work. In response to the Peak Oil doubter:
I find that people who reference only estimated underground reserves have not had much exposure the complex processes it takes to get oil from the ground to your local Shell station. Yes, there all sorts of reserves underground. But the real questions are "how do we get the oil up" and "how much does it cost to do so"? It does help to have done some field work in geology (I have a BA in it) to understand the importance of those questions.
My personal 30 second speech explaining Peak Oil is that we have blown through most of the *cheap* oil and the world must change because of that. I don't see us actually running out of oil in my lifetime, but I do suspect my children or my grandchildren will inquire with interest about a world where plastics were thrown out daily, by the ton. It's comforting notion to think the only thing that stands in the way of endless oil prosperity is The Nature Conservancy, but it is not the case.
Thanks. I gave up trying to explain Peak Oil to anyone in my everyday life. Now I act just as surprised as everyone else during the bumpy tumble down the far side. As James Howard Kunstler is probably tired of pointing out, this is going to prove to be about a lot more than different ways to run all our cars.
Dear Gary,
James Kunstler is right to point out the potential for social unrest which could follow from the continued unraveling of the economy brought about by the financial community's stupendous fraud. At least in the United States the citizens are armed and can fight back against the perceived plunderers. Here in Britain, the citizens have been systematically disarmed since the end of the First World War when the ruling class feared the returning army.
But in both countries we can look forward to increasing inroads of 'fascist' economics ― we are already a long way down the track. Extensive government regulation, expanding public works, state-enforced cartels, generous social programmes. The state will continue to take over failing banks and corporations, while the rest of big business will survive in direct proportion to its willingness to co-operate with the state. The 'national' part of national socialism (fascism) will come through trade barriers, restrictions on capital movements, and travel constraints on individuals. Through this melding of nationalism and socialism we will be able to see fascism for what it always was ― no more than a Marxist heresy with a rump of a possessing class.
The strange thing is that the great bulk of people in the western world will welcome this ― because the fascist government will promise salvation from anarchy and starvation.
Meh. Anarchy isn't all that bad, but your point is taken. Still, anarchy doesn't mean chaos. More on that later. Till then…
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