Friends from the days when I lived in Manhattan are writing increasingly gloomy e-mails saying that there are so many units for sale in some of the snooty, co-op buildings on Park, Madison, and Fifth Avenues that the boards of directors – which normally scrutinize a potential buyer’s financial statements, family background, medical history and question-laden application with more intensive thoroughness than the CIA examines a potential employee – are practically begging people to move in.
We’re talking about buildings that once rejected Richard Nixon’s application to buy a 12-room penthouse because politicians are “unsuitable,” or worried whether Jackie Kennedy Onassis would come with too many noisy Greek friends, and turned down an aging but still-famous Hollywood actress for being “too visible.” Apparently, the thought of trench-coated G-men, dancing Zorba’s and vulgar paparazzi all lurking about was just too awful to bear – until the luxury real estate market tanked.
It gets worse
I learned that, in the past three weeks, four Manhattan limo services parked their stretch Lincolns for the last time as long-time customers start trying to find their way around by subway. Many pricey summer rentals in the Hampton’s, usually all reserved with hefty deposits paid by this time of the year, are going begging. Upscale eateries are barely filling up once an evening where, for the past 10 years, many had two or three turns every night and reservations were made weeks in advance.
A doctor who works in a large Midtown emergency room tells me the number of unsuccessful suicide attempts rushed in by paramedics rose by nearly 30% over the past three months as a growing number of once obscenely wealthy yet now suddenly destitute Barons of Business see no solution to their downfall other than the final one. It seems that the (un)real Manhattan housewives glamorized on a syndicated television “reality” series are aghast at having to clean their own bathrooms. Would somebody please show them how to use the vacuum?
Other New York friends bemoan the fact that the private schools their children attend are facing a unique financial crisis. Every week, it seems that the schools are losing another one or two students whose parents can no longer afford five figure tuition bills so budgets are being tightened and hefty fee hikes are in the offing for those who still have a few pennies.
The Left Coast
Meanwhile, old pals in Los Angeles report much the same thing is happening there, even in old money neighborhoods such as Hancock Park and South Pasadena. I’m told that in the San Fernando Valley, part new Hollywood gold and part old middle class blues, on some streets “for sale” signs in front of houses outnumber the Mercedes’ parked in the driveways. Indeed, the number of Rolls, Porsche’s, Beemers, Mercedes, and other luxury cars so common on LA streets is dwindling as people suddenly can’t afford the lease payments and turn in the keys.
In the past, that only happened when actors, writers or directors went on strike for more than a month and the over-extended “A” list ran out of cash.
High priced celebrity services like dog whisperers who rehabilitate dogs and train people are feeling the pinch as are the heretofore-absolutely necessary, totally fabulous, designers who dress the Lower Left Coast for everything, as are cosmetic surgeons and fashionable divorce lawyers. One noted Santa Monica family lawyer wrote to me saying that a wealthy client who’d been fighting her soon-to-be-ex-husband for everything including the riding lawn mower just sent an e-mail instructing him to “finish it up this week so I can stop paying you and he (her husband) has something left to split with me.”
Farther up the Pacific Coast Highway, the wealthy computer geeks on the San Francisco peninsula sit terrified as they watch the daily, shrinking value of their stock options and 401(k) plans, stuffed full with company stock taking a beating. Many are cutting expenses back to the bone which, for them, may mean replacing running shoes twice a year instead of every two weeks.
A woman in the Deep South whose family roots in the region pre-dates the Confederacy and is still fighting the Civil War, whines about having to cut the number of days her housekeeper comes to clean to only twice a week because the stock market collapse severely injured her trust fund. For a Southern Belle, this must be the ultimate humiliation.
I am hearing reports that many wealthy Cuban families in Miami are reducing or eliminating how many US dollars they funnel to relatives still living on the island, an act that hurts both recipients and the Cuban economy. Moreover, this winter the steady flow of American tourists to the island who sidestep idiotic US travel restrictions by flying first to Canada, the Bahamas or Mexico – the Cuban government gleefully cooperates by not stamping American passports, instead putting entry visa’s on a Cuban version of Post-It notes – will be a fraction of what it has been the past 10 years based on reports from travel industry groups.
So, do I pity the rich and their troubles?
No. If anything, and I know it’s perverse to say this, but if there is to be an economic collapse it is heartening to see the same problems beset those who used to live in multi-million dollar homes as those struggling to stay in their homes in working class districts.
Articles by Charley: