Am I Living In A Parallel Universe?
As far as I’m concerned, the US economy is recovering handsomely. How could it not with packed restaurants, and traffic that makes me want to pull your hair out? Facebook is worth well over $20 billion now in just a few short years. Meanwhile, the whole world is hooked on Apple products with iPads ($500-800) and iPhones ($200-300) selling like hotcakes. Who needs yet another computing device? I guess millions do!
There is so much money flowing into the Bay Area, it’s hard to imagine another financial crisis on the wing. Yet, I’ve read plenty of posts on “steps to take when the next financial crisis comes” and I’m scratching my head. Am I living in a parallel universe where every other car I see is a fancy German vehicle, and I can never get a reservation at my favorite sushi joint? I feel like I’m living in a little optimistic bubble where the world isn’t falling off a cliff and is actually doing well. Tell me if I am, because bubble living is delusional living at its finest.
The stock markets, although highly volatile have recovered some 50% from the bottom and generally serve as as a leading indicator for the economy. Yet people are still talking about a double dip recession. Yes, the biggest worry is stubbornly high unemployment, but you’ll never be able to tell if you walk the streets of San Francisco.
LOTS OF POSITIVE ANECDOTES
* Commute time from the city to the airport has increased from 25 minutes to 35 minutes on average due to traffic.
* The House Of Prime Rib is always packed and calling two days before gets one a reservation for two at 10pm.
* The BMW dealer says they are moving cars at the fastest pace since 2007. The new 5 series is in, with a price tag of $72,000 for the 550i version.
* Venture Capital and Private Equity firms are flush with cash and are looking to find a home before they have to return money to investors. Foursquare, Pandora, Zynga are getting funded for ridiculously high multiples.
* Banks are cashed up and lending again based off my conversation with three mortgage brokers.
* Headhunters (recruiters) are calling incessantly and it’s already past the halfway mark.
* You can never get a tennis reservation at 3:45pm, 5:15pm, or 6:30pm at my club because people make so much money they get to leave work early or don’t have to work at all. Membership has increased by over 30% in one year.
* A house down the street received multiple offers and was in contract within 10 days.
* Advertisers have been filling my inbox seeking to do business.
* Landscaper had to delay a job for one week after already starting at my house because there was a bigger job to do elsewhere.
* Went to go buy a pair of retro Air Jordan Infrared VI shoes for $340 (package set of two) 20 minutes after Nike Town opened and they were sold out. Went to two other stores, sold out! Typical buyer? High school kid.
* I can never get on the bus after 5:30pm because the bus gets completely full in the first 3 stops of a 7 stop pick up route.
* QE2 baby! Asset reflation on a one way train up.
The newspapers and TV stations constantly tell us how rocky things are. Even fellow bloggers are urging caution. Yet our fearless leaders in Washington are telling us we’re recovering quite well. I’m generally wary about government prognostications, but with the amount of activity in the Bay Area, gosh darn it, I think they might be right! How else can the government raise taxes for the rich to 60% (Federal, State, City, FICA, Medicare) next year without torpedoing the economy? The government must know something, and it seems as if people are also catching wind that the good times are back again. Even if the markets drop 10% by end of the year, it still doesn’t take away the fact that activity is back, and in a big way.
Readers, do you believe the economy is solidly recovering? How is your neck of the woods doing? Any anecdotes you’d like to share indicating a weak or strong economy?
Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”
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