Last Saturday night, as the storm clouds gathered on the horizon and I lit a Montecristo No. 2 cigar, I was seized by a mild panic. Should a full-fledged economic crisis ensue, I thought, I might experience a disruption in the supply of quality cigars. Serious times call for serious measures, so I decided to ration my existing collection.
A week later, I can only smile. As you know, I am employed in the financial services sector; I run my own firm. I deal with hedge funds, HNWs, and property developers. The economic crisis in which the government and banks have plunged the country represents years of greed, corruption, and incompetence. It does not take a Wall Street quant to figure out how it happened. The signs were there for all to see. There were those of us who saw it coming and planned accordingly.
Almost two years ago I started trimming my real estate holdings in anticipation of a downturn. Unlike many local real estate professionals I know, who behaved as if they would live forever. It amuses me to watch these arrogant young pricks--many with Ivy League MBAs--come begging for money. Just a few years ago they were snapping up interest-only, 'no doc' loans in order to make a quick buck 'flipping' properties. They bought villas in Newport Beach, diamonds and face-lifts for their wives, expensive motor cars, private jets, mistresses, etc. The money has now dried up and they are hurting.
The chaps I do business with on the East Coast are hurting too. They are property developers and have over-extended themselves in a massive way. These old boys, with years of experience and business success behind them, are telling me they have not seen conditions like these in 40 years.
As I light another Montecristo No. 2 and pour a glass of chardonnay, taking care not to spill a drop on my Gucci loafers, I think of them. But only for a second or two. It would be unseemly to gloat. Self-satisfaction is such an ugly trait. I may be contemptuous and mocking; but smug, never.