[Marxism] Gloomy yuppies

[Louis Proyect <lnp3@xxxxxxxxx>]

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/11/AR2008101100362.html
The Big Apple Loses Luster
Wall St. Meltdown Caps a Streak of Defeats for City

By Keith B. Richburg and Robin Shulman
Washington Post Staff Writers
Sunday, October 12, 2008; A01

NEW YORK -- This big, brash, in-your-face city suddenly seems to have 
lost its mojo.

At the beginning of the year, there was supercharged hype over the 
possibility that two, even three New Yorkers may be squaring off 
against one another for president. But now former mayor Rudolph W. 
Giuliani (R), Sen. Hillary Rodham Clinton (D) and Mayor Michael R. 
Bloomberg (I) are sitting on the sidelines while the action is in 
Chicago and Arizona.

In September, the New York Mets collapsed again before reaching the 
National League playoffs, and the Yankees were left out of the 
postseason for the first time since 1995. Baseball is being played in 
October, but not in New York.

On top of all that gloom comes the spectacular implosion of Wall 
Street, where some of the city's most storied financial behemoths -- 
Bear Stearns, Lehman Brothers, Merrill Lynch, American International 
Group -- have been forced to merge or seek federal handouts to stave 
off bankruptcy. There are projections of thousands of lost jobs in 
the financial services sector, and the continuing plunge in stock 
prices has forced dramatic and sudden changes in the lifestyles of 
some of New York's wealthiest.

Bookings for private jets are way down, and yacht rentals are drying 
up. Young Manhattanites are giving up the multimillion-dollar lofts 
they can no longer afford. The decade-long real estate boom appears 
to have stalled, with new projects on hold and existing skyscrapers 
difficult to refinance. New Yorkers are scaling back plans for big 
weddings and bar mitzvahs. Even a staple of life in the city, eating 
out, has taken a hit.

"Businesses are having tremendous difficulty getting money, and 
there's a loss of confidence in the marketplace," said Kathryn Wylde, 
president and chief executive of the Partnership for New York City, a 
nonprofit alliance of business leaders. "Merger and acquisition 
activity has stalled. . . . Portfolios have gone to hell. It's 
rippling all the way through our system."

In true New York fashion, more and more of those directly affected by 
the financial crisis are finding their way to psychoanalysts' couches.

"I had a whole bunch of referrals -- I had five new patients just 
come in," said Alden Cass, a psychologist who specializes in the 
mental health problems of stockbrokers and investment bankers. "These 
are individuals who have become successful at taking control of 
things, and now they are reduced to a kind of helplessness."

Cass, who wrote the book "Bullish Thinking: The Advisor's Guide to 
Surviving and Thriving on Wall Street," spoke last week at a 
conference of mental health professionals in Santa Monica, Calif., 
explaining how they should handle an expected influx of new clients. 
When he returned to New York, he had 10 consecutive hours of patient 
sessions on his schedule -- people from affected firms, chief 
executives, branch managers.

"They come from the grandiosity of making a lot of money," Cass said, 
"and now they most certainly won't be getting bonus checks this year. 
How do they explain that to their wives? How do they explain that to 
their children in college?"

The average working stiff might find it hard to sympathize with 
someone who once earned a couple of million in salary and bonuses 
suddenly being forced into a $180,000-a-year lifestyle. But according 
to Cass and others, the shock here in New York is all too real. There 
are private-school tuition, house staff salaries, and huge mortgages 
on multimillion-dollar apartments in Manhattan and second homes in 
the Hamptons.

Marie-Claire Martineau, a real estate agent with the high-end agency 
Maison International, said several of her clients took out big 
mortgages on Manhattan lofts and are now looking to move into smaller 
spaces. "A lot of people have to rent their apartment because they 
can't afford it anymore," she said.

One of her clients was paying $19,000 a month for a two-bedroom, 
two-bathroom apartment in the Chelsea neighborhood. "He lost all of 
his stock options on Wall Street and he can't afford the mortgage," 
Martineau said. "All these people are renting their lofts because 
they can't afford them. . . . They overextended themselves or they 
were counting on their bonuses and stock options."

They are not only moving out of their luxurious digs but also 
altering their once high-flying lifestyles.

Alex Todd, president and chief executive of Quintessential Jets, a 
charter jet company based in New York, said his company used to have 
about 20 to 30 bookings a month for private jets; so far this month 
it has had three or four.

"With what's happening in today's economy and the markets, people are 
obviously less inclined to spend the kind of money to fly privately," 
Todd said, explaining that a private jet flown one way to Miami costs 
about $15,000. "Most of our clients are CEOs and financial advisers 
and celebrities as well," he said. "But basically the corporations 
have been the best fliers. With all the corporate setbacks and 
everything, it's affected everything from the bottom to the top."

The formerly wealthy are also avoiding private yachts, often a choice 
venue for cocktail parties and receptions where merrymakers take in 
the skyline, the bridges and the Statue of Liberty while cruising 
along the Hudson River.

"It's definitely hit us hard as an industry," said Frank Giordano, 
president of the Yacht Owners Association of New York, a 
Manhattan-based consortium of charter yacht owners. "I've seen two 
companies go out of business in the past year, but everyone is down. 
The industry is down 30 percent as a whole."

During hard times, corporations are "just not going out as much," he 
said. "Personally, I just had a bank who we do business with a lot 
saying, 'With these economic times, it's just not prudent for us to 
go out. We'd like to hold our credit for next year.' "

The party circuit is feeling the pinch, too. Even those who still 
have wealth are anxious not to appear too showy during difficult 
times. Joe St. Cyr, director of Joseph Todd Events, which plans 
weddings and bar and bat mitzvahs, said people who have already 
planned big events are now looking for ways to trim costs -- cutting 
back on flowers, for example, or bargaining with hotels for lower prices.

"I have clients who have lost a significant percentage of their 
portfolios, 10, 20, 50 percent of their portfolios," he said. 
"They're mostly Wall Street-connected people. They're not so 
terrified and know the market will come back. They have money to 
spend." But, he said, "they want to either not spend so much on a 
party, or want to look like they're not spending a lot of money."

Wall Street itself, and the surrounding warren of narrow streets, 
have taken on kind of an amusement-park feel. Tourists snapping 
pictures outside the New York Stock Exchange are bumping up against 
television news crews from across the country and around the world 
that stick microphones in their faces and ask about the latest dip in the Dow.

"So how do you feel today?" a Russian television reporter asked in 
accented English, shoving his microphone unknowingly into the face of 
another reporter.

"It's been like this for two weeks," said a young investment banker 
who came out of his office in shirtsleeves on a breezy day for a 
cigarette, trying to avoid the crowd.

"I'm not happy about it because it affects my pension," said Hugo 
Zettler, who was visiting with his wife, Diane, from Tempe, Ariz., 
taking snapshots outside the stock exchange. "I'm just glad I don't 
have any money in the stock market."

"Well, I did," said Diane Zettler, "but who knows now?"


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