Here endeth the New Gilded Age
Some snapshots of the end of the new gilded age by Michael Shnayerson in Vanity Fair:
There were…some big-name “blowups” as the market began to implode. Here was Sumner Redstone, chairman of Viacom and CBS, who had to sell $233 million worth of Viacom and CBS stock in order to pay down part of an $800 million loan. T. Boone Pickens, legendary Texas oilman, was another blowup, and so was Chesapeake Energy’s Aubrey McClendon, forced by a margin call to sell 94 percent of his 32 million company shares into the bear market. (Worth $2.2 billion last July, the shares were sold in October for $569 million.) Kirk Kerkorian, 91, has lost about $12 billion on his 54 percent ownership stake in MGM Mirage, the casino and hotel operator that owns almost half the hotel rooms on the Las Vegas Strip, including those in the Bellagio, the MGM Grand, the Mirage, and Mandalay Bay. The company’s stock is down 86 percent this year, and its bonds were downgraded deeper into junk status in October. Kerkorian has reportedly told friends that he “lived one year too long.”…
What’s definitely gone…are jobs — lots and lots of them. Along with a sizable portion of Lehman’s 26,000 worldwide, and Bear Stearns’s 14,000, Wall Street firms across the board — even Goldman Sachs — are cutting back, and that pain radiates out to the limousine drivers and caterers and lawyers and personal trainers and restaurant owners and real-estate brokers who rely on Wall Street clients, not to mention to the many nonprofits and charities that have grown accustomed to Wall Street money. The latest estimate of jobs New York will lose, both on and off Wall Street, is 160,000. Governor David Paterson says the state’s budget deficit has already reached $12.5 billion. In New York City, where Wall Street accounts for more than a quarter of the tax revenues, Mayor Michael Bloomberg thinks the financial-sector crisis will leave a $2 billion hole in the next fiscal year’s budget…
no fewer than 50 high-end New York apartments have been put on the market since late September, most by Wall Streeters. Usually, the fall listings for apartments between $10 and $20 million are all teed up by Labor Day. Not this year, as The New York Times’s Josh Barbanel notes. At the Majestic, on Central Park West, two Wall Streeters listed their three-bedroom units within hours of each other. Robert Long, a managing director of hard-hit Allied Capital, listed 8C for $13.8 million as “the most magnificently renovated grand apartment to become available on Central Park West in years.” James Kern, a former senior managing director of Bear Stearns, listed 17D — the “ultimate renovation” — for $12 million.
Ten blocks away, at the Park Laurel tower, on 63rd Street, Charles Michaels, of the hedge fund Sierra Global Management, listed his 2,800-square-foot, four-bedroom apartment with terrace for $l4.9 million. In early October, Steven F. Stuart, of the Garrison Investment hedge fund, listed the apartment directly above Michaels’s — no terrace — for $10.8 million. Ten days later, real-estate developer Ira Resnick put his own, similar apartment at the Park Laurel up for sale — for $10 million.
In mid-2007, all guests were kicked out of the Georges V Hotel on a few hours notice. The guests included, we are told, the Rolling Stones, ILFC founder Steven Udvar-Házy, Boeing CEO James McNerney, and various billionaires and luminaries. Perhaps a hedge-fund operator wanted the place all to himself. As we observed this spectacle, we suggested that our colleague mark the event well, since it seemed to symbolize a gilded age that was out of control and nearing its end. Now it seems that a new golded age has indeed ended.
December 8th, 2008 at 7:10 am
The story is that 3 Indian billionaires have each lost 30+ billion this year. That is $90-$100 billion between the three of them. How many Russian Billionaires have taken large haircuts?