A Venti-Sized Recession?

I wonder if people will be more civil and post fewer incindiary comments once the election is over.

Not to mention their existence encourages the culture American overspending. $5 for a cup of coffee? Sure. It's on every corner. If everyone is drinking it, that must mean that I can afford it, too. Otherwise, I'm not as cool. Do you accept Visa? Great! I'll just pay off my credit card with an adjustable rate mortgage.

This guy sounds like he had a bad experience at Starbucks (possibly rejected by the cute barista?) and wants to put the blame on a successful entrepreneurial company that is constantly looking for ways to ride the ever-changing tide of the economy, just like the rest of them. Why Starbucks, I wonder? There are plenty others to point to - fast food chains in general, wall street, the egotistical reach of the american "way of life".

I feel like this article is twisting the reality of the situation. That is, that these different international economies are suffering because they are connected to our own which is flailing. The fact that Starbucks is there is merely an effect of an economy that is tied to our own and practices the same "free market" mentality and has the consumer base to support it. The stronger the economy, the more Starbucks there are....and McDonalds, and KFC, and AT&T....etc.

Use Starbucks as an example, sure, but don't make it sound as though Starbucks is the devil and is the reason for everything that is wrong with someone's life.

To the communist that thinks the democrats and Obama Hussein are the answer:


Get a life....Comrade...If you think its bad now, wait till the democrats get in and tax us to death...Bill Clinton promised a middle class tax cut too, but instead he hit us with one of the largest tax inceases EVER...His economy was still enjoying all the money coming in from REAGANOMICS, and we had a surplus IN SPITE of Billy boy, NOT because of him...Obama will do the same thing...Demoicrats hate people that succeed, they wanna take successful peoples money and give it to the "lazy class" that dont wanna work, the ones that wanna suck from the government nipple instead...I hope Osama Hussein wins, and I hope this country REALLY goes into the tank afterward...Thats the ONLY way you communists will learn that Democrats are BAD for this country...But you wont learn, even if Osama tanks this country you commies will STILL try to figure out how to blame it on Bush, and your commie cronies in the news media will gladly go along with it...You make me sick...

As I sit in the Starbucks in Miami's financial district, strategically located between the 4 star JW Marriot and one of the few banks that is not suffering and has maintained its reputable status by being chosen by our gvmt to assist in the Bailout and as the depositary bank by Suramaericana de Inversiones Bank of New York Mellon, I cannot help but to declare the Starbucks theory as.... brilliant.

People on these bogs are fond of saying that the current economic meltdown was caused by Fannie Mae and Freddie Mac underwriting bad mortgages. While Fannie and Freddie obviously are guilty of writing bad mortgages, and worse, guilty of lobbying Congress to allow them to do so with impunity, their actions are just a small piece of the puzzle when it comes to determining who (or what) caused the financial crisis we face today.

In 1929 the stock market crash caused the banks to fail, because the banks were in bed with the stock market. Back then, banks owned investment houses, so when the stock market fell, the banks fell too. This triggered the Great Depression. So in 1933 the Congress wrote laws that regulated banking, making it illegal for banks to own investment companies, mortgage guaranty companies or insurance companies. The idea was to keep key industries separated by a fire wall, so that if one industry failed the whole economy would not go down in flames.

But the Republicans under Bush deregulated the banking industry. Senator Phil Gramm wrote legislation (the Gramm Rudman Act, the Gramm Leach Biley Act, etc.) that stripped away the regulations in the financial and insurance industies. He pushed them through the Republican Congress and they were signed into law by Geo. W. Bush. John McCain voted in favor. Everybody said how great it is to deregulate and create free markets.

Lehman Brothers, Bear Stearns and Merrill Lynch each gave over a million dollars to Senator Gramm's re-election campaign.

The economic collapse that happened later was a direct result of the deregulation, and here's how: the banks wrote bad mortgages, then bundled the mortgages into investment vehicles that they sold all over the world, and they even got firms like AIG to insure the investments. It was all a house of cards.

If there had been no deregulation, sure we would have had a bunch of bad mortgages, and the mortgage guaranty and real estate industries would have suffered, but there would not have been a global financial meltdown, since the problem would have been contained in one sector of the economy. You can thank Geo W. Bush, Sen. Phil Gramm and Sen John McCain for the meltdown, since they were strong proponents of deregulation.

Furthermore, although Fannie and Freddie are now holding the bulk of these bad mortgages, Fannie and Freddie did not originally write most of these mortgages. They bought them after the fact, bundled by banks/investment companies. Fannie and Freddie got screwed by the Wall Street fat cats. And so did you, if you pay taxes.

What is Phil Gramm doing today? He works as a lobbyist in Washington, trying to make it legal for the Swiss bank he represents to sell Death Bonds in the United States. Nice guy, Phil Gramm. Incidentally, John McCain has said that he wants to appoint Phil Gramm as Treasury Secretary. Some people just can't learn from their mistakes.

DUDE! We need more POT to help us make sense of all this!

LMAO! You've been smoking pot again haven't you. I would have to say POT is the reason for this creative thesis of yours. College students all over the world have already proven that. I know it helped me crank out some of my most creative thesis papers in college. Our economists and politicians need to have a nice long pot session and then hash-out a plan to save our country's financial crisis. Forget Starbucks! We need POT!

How about Germany? Their bailout is only 25 billion less than ours; how many Starbucks do they have? Cute theory, but no latte for you!

Actually, though some of the logic was misguided, I feel the overall premise was sound. I think the writer is simply using Starbucks as an indicator to understand market trends. I think it's very easy to see that in an economy where people have discretionary income to support overpriced products (like starbucks) it's a sign that not only are the people improperly spending their resources, but maybe their source of funding comes into question. A sign that households are in fact running a deficit at home, to support an exuberant lifestyle.

And, on the other hand, if the people in a country don't have discretionary income to waste (they aren't running a deficit lifestyle), or if they do have more money and are choosing not to waste it, they are in fact being fiscally responsible.

an interesting article, but the theory breaks down when you look at Iceland, where there are no Starbucks yet the economy faces a collapse. I do agree that there is an interesting correlation, but as always, correlation does not equal causation - or, in this case, correlation does not equal an indicator of immanent financial crisis

Your article makes more sense than anything that has emerged from the Bush Administration, or either of the Presidential candidates. It seems that those with no sense of humor also lack a good understanding of complex financial derivatives and the damge they have done and will continue to do.

Nowhere did I see the $500 TRILLION of CDWs mentioned, when 'Joe the Plumber" understands what those might do his head wil explode.

Wow, this has to the worst article to date. Besides the point of this being completely bogus, you almost go as far as saying that McDonalds should be found at fault if they sell a Big Mac to a murder right before they committed the action. I shudder at actually quoting your story but I feel I must.

As you report, "Starbucks's frothy treats provided the fuel for the boom, the caffeine that enabled deal jockeys to stay up all hours putting together offering papers for CDOs, and helped mortgage brokers??? work overtime processing dubious loan documents."

According to your logic, it would be due to the fact that McDonald's sold a product to "fuel" the murder to perpetrate the crime. I believe that your bogus logic resides more on a personal vendetta, escalated to a global level against you receiving an incorrect beverage at a Starbucks, or the barista at the bar did not give you her phone number.

That would be a good theory to apply to UK or USA, but Iceland doesn't have any Starbucks and that country is really screwed up right now. It has the same suburb fetish, car fetish, and mass-consumerism of the US though.

woah, worst article ever.

South korea, expecially in seoul(171starbugs!) it's not a problem of financial cricis. It's the trendism of the korea young woman who like 'sex and the city' and newyork style.. kekeke very foolish woman. Generally starbugs girls graduate university and only like to decorate she's out looks not a buy book in an year, plastic sergery is basic standard in there circle. It's the big problem of appearance-to-others society,south korea.

Why do journalists seem to need to overgeneralize in the pursuit of the profound. Many of the countries who have few Starbucks don't have them for reasons related to the local culture. For example, Argentina, has a thriving culture of cafes. There are national chains such as Havanna and Bonafide as well as local cafeterias. Therefore Starbucks does not have easy entry into the market. In contrast South Korea was wide open for Starbucks. So before making Starbucks the symbol of a much more complex problem maybe you should just wake up and smell the coffee.

Please do not make readers no get confuse: Manhattan = New York City not Brooklyn, Long Island, Queens etc...
I encourage to review above sentence: "with nearly 200 in Manhattan alone. " Thanks.