The silicon chips aren’t down yet

“How poor are you?” That’s what formerly rich guys ranging from hedge-fund kings and tech pioneers to bankers and trust-fund heirs are now asking each other at dinners around town.

This group doesn’t care who ends up buying Wachovia. That’s all background news; just one more sorry piece of detail in the carnage of a lost battle that’s left them ruined. None believes US Treasury Secretary Henry Paulson’s plan or its revisions can stave off devastation.

For a society that has pretended not to talk about money, while caring about little else, suddenly the experience of being nouveau pauvre is all that’s on everyone’s lips.

Startlingly, Manhattan bankers who once flew private, had yachts, homes, wives and servants, and owned art worth hundreds of millions, are not afraid to say: “We’ve lost everything.”

Some of them even compare themselves with workers in Detroit: “At least I’m not as badly hit as that,” they say.

Well, thank goodness for the reality check.

Last Friday night at a birthday party given for 200 of the former rich at a downtown circus where socialites wore jeans and the bar was open one financier asked about 10 other men in turn: “So how much have you lost?” All said: “Too much or enough to be ruinous.”

People are even openly asking: “Dumped the wife yet? If not, why not? You hate her; she hates you. Now, you’ve nothing to lose …”

On Saturday, I was invited to a baby shower. At the last moment we were called to be told: Absolutely No Gifts, Please. Social liberation is the upside of what many fear will be the most harrowing few years anyone under 80 has experienced. One financier was so troubled not just by the fact that he’s lost his millions but also by the effective collapse of government that he told me he is planning to retire to study government and to develop a think-tank to ensure we never see a breakdown like this one ever again.

There was talk of the end of America as a superpower. “We’re done. Watch China rise,” people are saying. Yet a few loners weren’t about to quit. “This is the time to put our thinking caps on and innovate,” said a Silicon Valley overlord. Well, let’s hope he’s thinking hard. With Wall Street in tatters, Silicon Valley may be our last hope.

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And a small glass of Chateau Plonk, please

L ast week saw not just the initial failure of Hank Paulson’s bail-out bill but also the death of the $800 bottle of wine.

“It’s just not OK to have that on your expenses at a time like this,” one restaurateur says he has been told by banker clients. In this cut-throat world of mergers and firings, one imagines the quickest route to being fired would be to get carried away with a client and put a particularly fine Château Margaux on the office tab.

Inevitably, the owners of New York’s 22,000 restaurants are worried about how to survive the downturn. In previous periods, many have had to close, bringing that number down to 16,000.

According to Alex Von Bidder, co-owner of the Four Seasons — the ultimate power-lunch hot spot in Midtown — the answer is to be careful in good times as well as bad. “We never sell $800 bottles of wine,” he tells me. “In these times we know we lose the bankers who’d come in from the suburbs on a Friday or Saturday night, so we are careful about pricing, staffing, etc. It’s about quality, not quantity.”

Indeed I notice that lunch or dinner companions are more careful than usual about what they order: it’s one course, not two, and no coffee.

But then everyone is trimming back — and, for once, there’s no shame in it. If they used to take limos, now they take taxis; if they took taxis, now they take the bus or subway. I’ve also seen society women scale back their requests from friends for philanthropic money. Those just seem tactless at a time like this, despite their valid arguments that charities are losing out too.

Ironically, people are buying more designer clothes — because they’re on sale. Salespeople call to say they’re willing to come to your home to show you clothes if you haven’t time to visit the stores.

Private clubs are also increasingly the preferred dining spot for many New Yorkers. These are no longer aimed at rich wealthy Upper East Siders. One hot club is the Montauk Club in Brooklyn; it invites members to bring families and friends, but it costs $500 a year.

So thrift is the new chic in New York — and, as one dinner companion and I reflected on it last week, we felt relieved. “It’s almost like people can really be themselves for the first time,” he said. “There’s no longer that need to pretend to be something you are not. The reign of Gatsby is over.”

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Lose your job and watch friends vanish

Alberto Vilar once promised so many millions to both New York’s Metropolitan Opera and London’s Royal Opera House that his name was engraved in both places — only to be removed in 2005, when prosecutors charged him with stealing most of his fortune.

But the former financier said that what has hurt him most in the build-up to his trial, which started last week, was that “Ninety-nine point x” per cent of the people he had known haven’t phoned him since he was indicted.

In these precarious times, he is not alone. “Who, really, are my friends?” is a question a lot of people are asking themselves. There is a real fear that you are only as desirable as your job title — when you lose your job, do you lose your friends too?

I recently had lunch with a former media titan who had, in his fifties, retired from a high-profile life. People were shocked to see us lunching. “He never comes out,” one passer-by observed.

I asked my companion why. He shrugged. “When I left my job, I knew I was leaving behind most of the people I knew. They weren’t real friends. Mentally, I checked out. It’s the only way to be sane.”

He talked about another household name who was recently fired. Even though this man was a multi-millionaire, with a nice wife and family, he couldn’t get used to the fact that the phone wasn’t ringing off the hook. “He made the mistake of believing that the people who’d sucked up to him all those years actually were his friends.”

I digested this along with my food. There’s no doubt that in New York “friendship” is a fickle term. As long as you are king, you will courted; when you are down and out, you are dumped.

But if you treat your friends well, the inner sanctum will always stay loyal. These past weeks, many people have rung me concerned about friends, some of whom have suffered extreme losses. If they haven’t rung those people themselves, it’s because they don’t want to be tactless at a time when people’s nerves are frayed.

And it’s not just changed circumstances that change friendship. I remember talking about Alberto Vilar with one of the board of the Metropolitan Opera — before the legal charges were levelled. This person told me that something about Vilar didn’t smell right. He just didn’t like him. Perhaps Vilar is wrong to blame his new isolation exclusively on his reversal of fortune.

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Women should beware male spinsters

F or some reason, in the last week or so I’ve had a series of lunches and dinners with friends who are male, single, over 35 and never-married. Men like this were traditionally labelled playboys, a term implying they possessed a rakish charm and a wariness of settling.

New York is full of them, since this is the town where men come to get rich and consider dating an unserious pastime. Young, nubile women outnumber men here by far, so casual sex is absurdly easy to come by.

In 1980, US census figures showed six per cent of men over 40 never married; now 16 per cent are in that position. So does this merely reinforce the notion that there is no need for men to rush into matrimony?

Au contraire. According to the new issue of men’s magazine Details, such men should be aware that women increasingly don’t buy the “I’ve just never found the right woman” line from any man over 35.

In fact, women have a new term for these men: they are not playboys, they are “male spinsters” — a moniker that implies at best that these men have “issues” and at worst that they are sociopaths.

Since reading this, I’ve listened to my single male friends with new interest. I’ve noticed that before you’ve even ordered the appetiser they always bring up their love lives — and when they do, their conversation is comic and pitiable.

From one: “Sex with no strings attached is just great; we both know we’re just having fun.”
(I thought: how little you know about women.) Or, as another put it: “Once I’ve had sex with one woman, it’s a bit like unwrapping a present — there isn’t any point doing it again.” I told him there’s a name for that: sex addiction.

One fears for these men, just as society has traditionally feared for the single woman. They cannot see how lonely they will be. The term “male spinster” is entirely appropriate.
But in time to ease my anxiety, a British friend came through town. He’s 30, absurdly handsome and just dumped a celebrity he was dating.

“I realised everything was on her terms. I couldn’t see a future like that. I want to get married,” he said. Finally. A worthwhile man. “You’ve got five years,” I told him, “before you need to worry about becoming a spinster.”

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Will Hillary Rain on Obama’s Parade?

The story I’d been hearing for some time has finally emerged in the mainstream media: namely that Hillary Clinton, her husband, Bill, and many of her major financial supporters, known as “bundlers” are so livid at what they see as underhanded — I’ve even heard it called “vindictive” — play by the Obama team, that it’s been suggested the Clintons intend to eviscerate what ought to be Obama’s coronation at the Democratic Party Convention in Denver next week.

There are reports that there will be a roll-call for delegates, in the hope that this crystallizes the magnitude of Hillary’s support.

Inevitably, all it would realistically do is highlight the rawness of the wounds from this year’s campaign trail battle — which is precisely what Obama wants to move on from.

The Clintons are doing their best to resist him.

Only a week ago, an effort was made by Hillary’s supporters at the Democratic National Committee’s platform committee in Pittsburgh to abolish caucuses, not least because Clinton’s supporters have long alleged that Obama won in Iowa — the crucial first caucus (where Hillary came third) because Obama supporters were bussed in from Illinois.

The efforts in Pittsburgh were rebuffed, but resentment lingers.

One New York-based Hillary bundler told me he is upset that Obama has not raised more than the half a million dollars he promised towards helping her clear her debts. (She still is $25 million in the red). He won’t be “bundling” for Obama.

Apparently he is not alone.

As of June 30th, only 10 of the 300 or so big Clinton bundlers had switched camps. (There has been some movement in July but it is said by sources to be insignificant.)

Also, angered Clintonites say they still hold a grudge towards David Axelrod, Obama’s campaign chief, who sent an email to reporters highlighting Hillary’s “I will continue” speech back in May, where she had alluded to Bobby Kennedy’s assassination.

“For Obama to come out, as he did, and say ‘we think it’s a non-story’ was ridiculous” says one Clinton backer. “Axelrod was the one pushing the story.”

But Clinton’s biggest gripe remains Obama’s hiring of Patti Solis Doyle, Hillary’s former campaign chief, and the declaration that Solis Doyle would be chief of staff to whomever Obama picks as Vice President.

“That,” says someone close to the Clintons, was “interpreted as personal. To appoint the VP’s chief of staff months before you’ve picked a VP is highly unusual — particularly given the fractious relationship between Patti and Hillary. It was as good as telling Hillary “It’s not going to be you.”

From Obama’s perspective, one wonders, is he mad or clever, giving both Clintons the stage in prime time consecutive nights before he speaks at the Convention?

One thing is for sure. When he finally appears in Denver, his speech needs to be better than his best. It isn’t just the times that call for more than a rockstar. His party does too.

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Not Even a Woman Can Win It For McCain

F riday saw a brilliant move by John McCain in choosing Sarah Palin, the 44-year-old governor of Alaska, to be his running-mate. Theoretically, if you look at the polls which had McCain close to the Obama-Biden ticket before this announcement, his appointment of Palin ought to make up for all his deficiencies. Palin is young. She’s female. She’s attractive; she’s got some celebrity, having been the runner-up in the Miss Alaska beauty pageant; She’s also wins our sympathy: she has one son off to war in Iraq; her youngest, born this year, has Downs Syndrome.

So I’m not surprised, to hear, while on holiday in France with English friends, as I have been hearing for the past two weeks, how, in their view, McCain has the American Election sewn up; They think that Obama will never overcome the racial prejudice of people who, unlike me, don’t live on the East Coast; that the blue collar voters just won’t go for a 47-year-old black guy who speaks like a rockstar but is thin on experience and substance.

Well, thank God, an American just joined us here on the Riviera. “You must be mad” he told our group. “There is going to be an Obama landslide in November.”

I inhaled.

I’ve been saying this for fourteen days — and no, it’s not because I’m drunk on the rhetoric of the Democratic convention. I recognize scripted political speeches for what they are.

But unless you are American or you have lived there for a long time (for me, it’s been eleven years) it is almost impossible to describe the disenchantment we feel about the George W. Bush era. He and his cronies have brought us to our knees, not just economically but spiritually. It wouldn’t matter who stood to follow Bush, I don’t think any Republican stands a chance in November.

I am prepared to wager that the polls have gotten the closeness of this race wrong (they’ve been wrong before) and that, Palin or no Palin, this is Obama’s moment.

Before 9/11 Americans did not fear in the way we fear now: we fear for our economy, for our safety, we worry who we can trust.

This wasn’t how things were when I arrived here.

In 1997 America was a country, in which, as Joe Biden put it so evocatively last week, people believed if they worked hard enough they could achieve anything. They certainly believed that if they worked hard enough they could tell their children “it’s going to be ok.”

I may not be American, but I grew up with parents who told me that anything was achievable if you just tried hard enough. So, like everyone around me, I have felt the change in the air of late, seen the worried brows reflect the dire economy and never felt so disappointed.

I’ve watched the bewilderment as people read the newspapers and learn we invaded the wrong country; seen the concern when we learn that, as Barack Obama put it, Osama bin Laden is still alive despite billions spent on a war with a country he’s not even in.

So, now, no matter how hard I work, I can’t tell my sons “It’s going to be ok.”

This is why, when Obama says he stands for hope, many people (myself included) do not hear this as political rhetoric. For them, and for me, it is real.

What isn’t real is John McCain’s beauty pageant appointment of Sarah Palin. This is the same McCain who recently recommended his wife appear in a topless beauty contest. So Palin’s appointment is just transparent chess-playing politics. And in the long-term I don’t think it’s going to work. Why?

Because as Barack Obama pointed out last Thursday, it wasn’t so much his achievements that took him to the Democratic presidential candidacy, but the American voters, who have signaled they are ready for a change. They’ll still be around in November, and with Hillary Clinton, now gracefully out of contention, there’s 18 million more of them.

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Lehman’s collapse rattles the really rich

T he phone has rung off the hook all weekend. “Are you OK?” I’ve asked friends whose husbands have been at Lehman Brothers. No, of course they are not. They just saw everything they’ve worked for go down the drain. A lunch barbecue with a Lehman executive who has been there 16 years was cancelled. No explanation needed.

The Saturday papers predicted the end of other institutions, too: Merrill Lynch, AIG. On Sunday morning one of my savviest investor friends told me not to worry about Merrill Lynch. He said it had too many good parts to implode. He had seen John Thain, the chief, very recently and had a long talk. Thain had said his bank was too valuable to go under.

By Sunday night my friend was on the phone again. Now, the news was that the Bank of America was ready to buy Merrill at $29 a share. Given that Merrill’s share price had fallen to $17 on Friday, this news, said my friend, proved that he and Thain had been right.

Sort of. We live in terrifying times. Even the election is not as much of a distraction as it should be from the economic pandemonium we are experiencing. At lunch and at dinner we all debate whether the panic is manufactured or whether a collective mental panic has always played an integral role in recessions, regardless of what the reality is.

Ordinarily people might be wondering about other things right now. For instance, there is artist Damien Hirst’s brash step of cutting out the middle man in selling his works; there is the huge exhibition of contemporary art in Russia on Wednesday. Soon Daniel Radcliffe comes to Broadway in Equus. We’re ending fashion week. But women talked not about clothes but about children, schools and how stressed their husbands were.

Until this week I’ve never heard really rich people — as in billionaires — sound scared. But now they do. Sure, they say, it’s no time to be panicking. Stay calm and there are fortunes to be made. There are lots of assets going cheap and some people are going to get rich.

But for most of us it is time to hunker down. Time to hope we don’t get that phone call: “Are you OK?” The answer, for all of us in New York, is no, we are not.

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Be very afraid of the hockey moms

Like 37 million Americans last Wednesday night, I sat transfixed as I watched the previously unknown figure of Sarah Palin turn herself into the angel of the Republican party. But the burning issue in my mind was: what is a hockey mom?

As a New York mother, I don’t believe the subject has ever come up at the school gates. Our offspring are just five. They’re still learning to skate. But after listening to Palin, the reality that my sons, New York born and bred, might soon take up hockey hit me like a weapon of mass destruction.

“Hockey moms”, according to the websites, come in three types. First, the X-treme hockey mom. She knows all the coaches at the colleges and the rankings. She sounds truly terrifying.

Then there is the Power Play Hockey Mom. She organises all the games, raffles and bingo nights. She is definitely a fleece-wearer.

Then there’s the “Cool-not-cold Hockey mom” — who lets Dad drive the kids to the games while she stays in bed, sure that sleep is the most essential requirement for the household leader.

Should anyone in this family want to play hockey, this is the role I will be adopting.

Obviously the hockey mom is a regional phenomenon. Few Manhattan mothers describe themselves this way — yet it occurs to me that both the X-treme mom and her “power play” subordinate would in fact translate very well in New York. This is, after all, the city that is home to the ultimate competitive mother of the Alpha child.

I am startled by the number of times I am told by proud parents how bright a child is, how good-looking, how talented. So you turn up at a school concert or play expecting to see either a young Laurence Olivier or Mozart and you watch something closer to Miss Piggy and Kermit from the Muppets. The one upside of all this is that one’s own children blend in to the latter scenario.

But this is America where, regardless of reality, all offspring are prodigies. And this is what the hockey mom, particularly the X-treme hockey mom, believes. Of course she does. Doubt is not in her vocabulary. As Palin says, she’s a pitbull in lipstick.

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Not even a woman can win it for McCain

J ohn McCain made a brilliant move in choosing Sarah Palin, the 44-year-old governor of Alaska, to be his running-mate. This appointment ought to make up for all his own deficiencies. Palin is young. She’s female. She’s attractive; she’s got some celebrity, having been the runner-up in a Miss Alaska beauty pageant.

She also wins our sympathy: she has one son off to war in Iraq; her youngest, born this year, has Down’s syndrome. So I wasn’t surprised to hear from English friends that they believe John McCain now has the election sewn up.

They think that Barack Obama will never overcome the prejudice of people who don’t live on the East Coast; that the blue-collar voters just won’t go for a 47-year-old black guy who speaks like a rock star but is thin on experience. But there is going to be an Obama landslide in November – and I don’t think that because I’ve been drinking the Kool-Aid rhetoric of the Democratic convention.

Unless you are American or, like me, you have lived here for a long time, it is almost impossible to describe the disenchantment about the Bush era. He and his cronies have brought us to our knees, not just economically but spiritually.

I don’t think any Republican stands a chance in November. Palin or no Palin, this is Obama’s moment. Before 9/11 Americans did not fear in the way we fear now: we fear for our economy, for our safety, we worry about whom we can trust.

In 1997 America was a country, in which, as Joe Biden put it last week, people believed if they worked hard enough they could achieve anything. But I have felt the change in the air of late, and never felt so disappointed. I’ve watched the bewilderment as we learn we invaded the wrong country and see that Bin Laden is still alive. When Obama says he stands for hope, many people do not hear this as political rhetoric but something real.

What isn’t real is John McCain’s beauty pageant appointment of Sarah Palin. And I don’t think it’s going to work. Because, as Obama has pointed out, it wasn’t so much his achievements that took him to the Democratic candidacy, but the American voters, who are ready for a change. And with Hillary Clinton now out of contention, there’s 18 million more of them.

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Will Hillary rain on Obama’s parade?

T he story I’d been hearing for some time has finally come out in the open: Hillary Clinton, Bill, and many of her major financial supporters, known as “bundlers”, are so livid at what they see as underhanded play by the Obama team that they intend to eviscerate what ought to be Obama’s coronation at the Democratic Party Convention in Denver this week.

There are suggestions there will be a roll-call for delegates, in the hope that this crystallises the magnitude of Hillary’s support. All it would realistically do is highlight the rawness of the wounds from this year’s campaign battle – precisely what Obama wants to move on from.

But the Clintons are doing their best to resist. Only a week ago, Hillary’s supporters tried unsuccessfully to abolish caucuses, not least because Clinton’s supporters have long alleged that Obama won in Iowa – the crucial first caucus – because his supporters were bussed in from Illinois.

One New York-based Hillary bundler told me he is upset that Obama has not raised more than the $500,000 he promised towards helping her clear her debts (she still is $25 million in the red). He won’t be “bundling” for Obama. Apparently he is not alone. As of 30 June, only 10 of the 300 or so big Clinton bundlers had switched camps.

Angry Clintonites also say they still hold a grudge towards David Axelrod, Obama’s campaign chief, who sent an email to reporters highlighting Hillary’s “I will continue” speech back in May, where she had alluded to Bobby Kennedy’s assassination. “For Obama to come out, as he did, and say ‘we think it’s a non-story’ was ridiculous,” one Clinton backer told me. “Axelrod was the one pushing the story.” But Clinton’s biggest gripe remains Obama’s hiring of Patti Solis Doyle, Hillary’s former campaign chief, and the declaration that Solis Doyle would be chief of staff to whomever Obama picks as vice president. “That,” says someone close to the Clintons, was “interpreted as personal. To appoint the VP’s chief of staff months before you’ve picked a VP is highly unusual. It was as good as telling Hillary ‘It’s not going to be you’.”

From Obama’s perspective, one wonders, is he mad or clever, giving both Clintons the stage in prime-time, consecutive nights, before he speaks at the Convention?

One thing is for sure. When he finally appears in Denver, his speech needs to be better than his best so far.

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