Could things get any worse?
Perhaps. According to a preliminary, decidedly limited investigation by SF Weekly, banks may also be riding atop a financial bubble made up of fist-sized cloth animals with names like Blizzard the Black and White Tiger, Curly the Brown-napped Cow, and Floppity the Lavender Bunny.
Consider that, recently, a Bay Area bank decided it was OK to include the value of a Beanie Baby collection when determining the net worth of a customer applying for a $200,000 loan.
Beanie Babies, it seems, are now acceptable collateral for bank loans.
"They were trying to get what assets we had inside the house. They said, 'Do you have any collectibles?' and we said we have this much in diamonds, this much in other stuff, and this much in Beanie Babies," says Terri Cooper, of Clayton, who says her 100-Baby collection has a current book value of around $2,000. "They wrote it on a piece of paper, and we got the loan."
In the interests of cordial relations with her lender, Cooper declined to name the bank that made the loan.
To any close observer of the Beanie Baby scene, it was only a matter of time before the nation's august financial institutions signed off on the value of these creatures.
A pair of Santa Ana robbers vouched for the dolls' value this spring by clubbing two store owners with metal pipes, then making off with a box full of the critters.
Beanie Baby conventions, like the one being held this month at the Vallejo fairground, have turned into melees rivaled only by the trading pits of Chicago.
"We have seen people lie, use unacceptable language, push children and others out of their way, hit each other, argue," write Jim and Laura, recent contributors to one of the thousands of Beanie Baby Web sites. "Right now BBs are almost as valuable as gold."
Cooper and her partner started collecting Beanie Babies several years ago "because they're cute."
"We don't ever plan on selling them," she says.
By networking with Beanie-crazy family members and friends on the East Coast, Cooper was able to construct an informal emergency-response brigade, in which members would scour stationery and gift shops when rumors surfaced that a particular Baby had been distributed in their area.
"I have family in Boston and New York, and if they'd get a shipment up there, they'd call and tell us," says Cooper, who works for an environmental engineering firm at the Presidio.
Though she paid no more than $8 for any of her Babies, many of them have appreciated dramatically since then. She now has several worth more than $200 apiece.
Which is fine and good for Cooper. But is this any way to run a banking system?
Well, actually, Cooper says she probably would have gotten the loan without the Beanie Babies. And there haven't been any other documented cases of loan portfolios backed by stuffed animals.
But that doesn't mean there won't be someday. And then what's next? Will we see brokers trade Beanie Baby Bonds, and craft sophisticated Beanie Baby derivatives?
After all, the lovable little things have all the characteristics of a solid financial instrument: "Supply is low, demand high, and you have crazy people like me who will do anything to get them," Cooper says.