In the same spirit, I propose the Starbucks theory of international economics. The higher the concentration of expensive, nautically themed, faux-Italian-branded Frappuccino joints in a country's financial capital, the more likely the country is to have suffered catastrophic financial losses. In the same spirit, I propose the Starbucks theory of international economics. The higher the concentration of expensive, nautically themed, faux-Italian-branded Frappuccino joints in a country's financial capital, the more likely the country is to have suffered catastrophic financial losses.
It may sound doppio, but work with me.
The current crisis has its roots in the unhappy coupling of a frenzied nationwide real-estate market centered in California, Las Vegas and Florida, plus a nationwide credit mania centered in New York. If you could pick one brand name to personify these twin bubbles, it's Starbucks (SBUX, news, msgs).
The Seattle coffee chain followed new housing developments into the suburbs and exurbs, where its outlets became pit stops for real-estate brokers and their clients. It also carpet-bombed the business districts of large cities, especially the financial centers, with nearly 200 in Manhattan alone.
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Starbucks' frothy treats provided the fuel for the boom, the caffeine that enabled deal jockeys to stay up till all hours putting together offering papers for CDOs and helped mortgage brokers work overtime processing dubious loan documents. Starbucks strategically located many of its outlets on the ground floors of big investment banks. (The one around the corner from the former Bear Stearns headquarters has already closed.)
Like American capitalism, Starbucks, fueled by the capital markets, took a great idea too far (high-quality coffee for Starbucks, securitization for Wall Street) and diluted the experience unnecessarily (subprime food like egg-and-sausage sandwiches for Starbucks, subprime loans for Wall Street).
It may sound doppio, but work with me.
The current crisis has its roots in the unhappy coupling of a frenzied nationwide real-estate market centered in California, Las Vegas and Florida, plus a nationwide credit mania centered in New York. If you could pick one brand name to personify these twin bubbles, it's Starbucks (SBUX, news, msgs).
The Seattle coffee chain followed new housing developments into the suburbs and exurbs, where its outlets became pit stops for real-estate brokers and their clients. It also carpet-bombed the business districts of large cities, especially the financial centers, with nearly 200 in Manhattan alone.
More from MSN Money and Slate.com
Everything's changed now -- for the worse
The theory and practice of blackmail
Starbucks: Real-estate savvy gone bad
Bringing down the house
Starbucks debuts new breakfast menu
Will there be blood?
Starbucks' frothy treats provided the fuel for the boom, the caffeine that enabled deal jockeys to stay up till all hours putting together offering papers for CDOs and helped mortgage brokers work overtime processing dubious loan documents. Starbucks strategically located many of its outlets on the ground floors of big investment banks. (The one around the corner from the former Bear Stearns headquarters has already closed.)
Like American capitalism, Starbucks, fueled by the capital markets, took a great idea too far (high-quality coffee for Starbucks, securitization for Wall Street) and diluted the experience unnecessarily (subprime food like egg-and-sausage sandwiches for Starbucks, subprime loans for Wall Street).
