Juliette, I agree that what your friend is doing is low and ridiculous and immature. However, it is not up to either of us to try and control or dictate his actions. The fact of the matter is that him "taking care of it on his own" is going to result in him making an ass of himself. If that is the path he is choosing to follow then that is his choice. In the long run, however, this may be a good thing. Your friend (the guy) will show his true colors and your other friend (the girl) will *hopefully* be turned off by his immature reaction. Yes, this may cause tension in your circle of friends, but it will be temporary as opposed to your current issue of having an unspoken attraction in the group.
Long story short, don't deck the kid. His actions will deck himself.
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Quote for Truth, betches... Out.