Sep 19, 2008
Wall Street quakes shake New York social scene
Sep 19, 2008
By Nicole Maestri
NEW YORK, Sept 18 (Reuters) - New Yorkers who frequent Gotham's most lavish parties fear the good times are over.
The economic downturn of the past year left many of the city's richest unscathed. But the swift demise of some of Wall Street's most historic firms has erased immense wealth and challenged a sense of security for even the moneyed classes.
"It's the end of an era," said party-goer Melissa Berkelhammer at an event at New York's Plaza Hotel this week. "Everything was going so sky high that everyone had to keep redefining what luxury was."
The reality check may even affect the way the city's top socialites appear in public, regardless of whether their own billions are safe.
"Being an unemployed heiress and going to a party and wearing a pretty dress is not the image people want to see right now," said Remy Stern, founder of Cityfile.com, which profiles people it believes are the city's most influential.
David Patrick Columbia, editor of the New York Social Diary website, which chronicles the city's wealthiest and their satellites, said: "We've entered a hurricane, maybe combined with a monsoon and cyclone."
"We save nothing, so we're not at all prepared," he said.
The turmoil on Wall Street has become the topic du jour among New York City's movers and shakers, Stern said.
Newspapers have been dominated by stories of bankers losing their jobs and photos of Lehman Brothers employees packing up boxes after the bank failed.
The boom on Wall Street and the proliferation of hedge funds fueled unprecedented wealth in recent years, while TV shows like "Sex and the City" glamorized for the masses the Manhattan good life -- designer clothes, stiletto heels, cosmopolitan cocktails, and never-ending parties.
From the $1,000 lobster and caviar frittata on the menu at Norma's restaurant to the $10,000 martini, complete with an unset diamond, offered by the city's historic Algonquin Hotel, Wall Street's newest wealth had changed the way the city socialized, celebrated and consumed.
At the Plaza, celebrities like actress Marisa Tomei and would-be socialites mingled at the launch of a $13,000 luxury Vertu mobile phone.
"It's very frightening," said Sherry Baroness von Koeber-Bernstein, who attended the party. "I grew up with Lehman Brothers."
She said the dire headlines left her feeling scared and missing the comfort of her husband, who died 10 years ago.
"HE LOST EVERYTHING"
On his website, Social Diary's Columbia recounts a conversation he overheard recently at Amaranth restaurant.
Two women were discussing a mutual friend, who recently sold an apartment for $40 million soon after buying it.
While one woman believed the apartment was sold because the husband did not care for it, her friend, described as a prominent New York real estate broker, quickly corrected her and said the couple sold it because they are broke.
"He lost everything!" the friend said.
"These are the kind of stories we're beginning to hear," Columbia said.
New York's financial industry laid off more than 49,000 people through late August, according to state data.
That number is bound to rise, and New York's nightlife industry is bracing for a slowdown as the bankers or hedge fund managers, who once plunked down thousands of dollars to secure a private table at the hottest clubs, lose jobs or fortunes.
"Who is going to spend $600 to $800 for a bottle of vodka?" Stern said.
Other society watchers said it is too soon to judge how extensively the Wall Street shake-up will tame the decadence of New York, a city known for its ability to reinvent itself.
"We are in the excess capital of the world -- the land of $2,000-a-plate hedge fund dinners," said Diahann Lassus, co-founder of wealth management firm Lassus Wherley & Associates. "They haven't been scrapped yet, but..."
Sandra Miniutti, spokeswoman for Charity Navigator, which helps donors find worthy causes, said people tend to pull back on their giving six to 12 months after the economy turns sour.
"We have heard from charities that giving is declining," she said.
Fern Mallis, senior vice president of IMG Fashion, which runs New York's Fashion Week, expects fashionistas will weather the downturn by cutting back in other areas of their lives.
"They may not need a second house, they may not need to buy the plane, they can cut back on vacation, but they're still going to get dressed every day," she said. (Additional reporting by Daniel Trotta and Bob Margolis, editing by Leslie Gevirtz)
© Thomson Reuters 2022 All rights reserved.