The Nine Stages of Economic Calamity

It’s around two in the afternoon in the afternoon on in the afternoon on Columbus Day that I get the news: The Dow is up over 400 points! Cut to the trading floor of the New York Stock Exchange—the usual pandemonium, only instead of disconsolate traders clutching their heads, we see jubilant traders punching their fists in the air. I must be the last person in New York to hear the glad tidings. How did I tune out until this late in the day? I thought it was a holiday. Turns out there are no holidays from the markets: You can get up at three o’clock in the morning and trade in Hong Kong, or sleep in until five a.m. and start trading in London. Money Never Sleeps—that’s what they’re calling the sequel to Wall Street, out next year, with Michael Douglas as Gordon (“Greed is good”) Gekko twenty years later.

The end of the day recorded an insane 936-point spike, “the biggest single-day percentage gain in 75 years,” according to the Times. Could it have been only a week before, on a beautiful Saturday night at the end of the “roller-coaster week” that finished with the Dow plunging 18 percent, that I walked past Isabella’s, the restaurant on the corner of Columbus Avenue and West 77th Street where we eat three or four nights a week now that the kids are gone—and got nervous because half the tables were empty? I shouldn’t have been surprised. We had cut back ourselves and were sitting in our kitchen those three or four nights (well, anyway, one or two) eating Amy’s Frozen Burritos thawed in the microwave. Tonight? Table for two on the terrace, please. I’ll have the tuna tartare and the lamb shank. But if the market tanks, break out the frozen tortellini al pesto from Fairway.

Up a thousand points on Monday, down 700 points on Wednesday, life in New York is always unpredictable (sometimes harrowingly so, as 9/11 proved), but the whipsawing market is taking a toll on everyone. The grief, the relief, the doomsday fantasies: A friend who has a farmhouse in the Berkshires says, “We could always sell our co-op and go live off the land, grow corn.” Even the woman at the coffee-vending van on my corner shakes her head ruefully when the transistor radio reports a 400-point drop on Tuesday. Wait a minute! What happened to the historic rise? Did it just evaporate? What’s Hank Paulson doing with that $700 billion? On the No. 7 bus heading downtown, I pass the Lehman Brothers building, which until last week had these amazing multistoried billboards showing color films of exotic locales. London, Tokyo, Frankfurt, Chicago: Here was global capital at work, making money ’round the clock for … someone. Now it’s Barclays, and the neat film footage is gone. Does that mean I have less money? And if so, how much less? I don’t want to know.

You can’t not care about money in this city, even if you don’t. It’s in your face all the time—in the Luxury Homes and Estates brochures, the Sotheby’s auctions, the windows of Chopard on Madison Avenue, the “Special Watch Portfolio” that arrives on a peaceful Sunday morning with the Times. Not that the rich haven’t been good for the city. Thirty-year-old stockbrokers pulling down $4 million a year support a lot of aspiring-actor waitresses who live off their what-do-I-care tips—and when the tens of billions in lost bonuses kick in, the rest of us are going to feel it. But a backlash was inevitable. The more retirement accounts are lost, the more buyouts and firings you hear about, the more embarrassing it is to be ostentatiously rich. Who rides in limos anymore besides kids from Long Island on prom night? As for the $300 tasting menu at Alain Ducasse at the Essex House, no wonder it closed: Who would be caught dead in such a place even if you could afford it? Wealth has become a virtual stigma.

Still, it’s a bad idea to gloat. “If you became obscenely rich riding this bubble, I’m taking pleasure in your fall,” John Schwartz writes in the Sunday “Business” section of the Times. Don’t be a churl, John: that my neighbor, a retired Wall Street veteran who’d worked hard for his money, lost a bundle in stock options intended for his children is no joke. No need to feel sorry for Hank Greenberg, ex-CEO of the disgraced insurance giant AIG, who told Charlie Rose that his holdings were “virtually worthless”—meaning that he’d lost $2.4 billion and was down to his last $100 million. But if you’re a lawyer at a white-shoe firm and you have to sell the place in the Hamptons, it still hurts: Your house is your house, whether it cost $5 million or $500,000. Still, it’s not the end of the world, not yet. No box seats at Yankees games, no Dress Circle at La Traviata—but have you bicycled down the bike path on the Hudson that goes all the way to Battery Park from where you can see the Statue of Liberty and the sailboats gliding by just feet from where you’re standing on an emerald lawn that goes right down to the waterfront? Is it as much fun as taking your entire staff to Venice for a weekend like the hedge-fund king Remy Trafelet? Probably.

Let’s admit it: On some level, the meltdown has been—dare I say this?—exciting. We get a frisson out of the plummeting numbers, the charts on the front page every morning zigzagging like a heart-attack victim’s EKG. How low can it go? The stimulus package is stimulating. Media columnists are getting great copy out of their own self-coverage: Over at CNN, an exhausted-looking Maria Bartiromo had been up for 48 hours … We’re history, in a positive sense. Tell me about the Crash of ’08, Grandpa. And for the serotonin-deprived, emergencies are mood elevators. Depressives thrive during a crisis. The number of suicides dropped during World War II.

How much of these catastrophic losses are phantom, anyway? Say you’re in the enviable position of having a job, your mortgage is paid off, the children’s tuitions are paid, your mom is tucked away in assisted living, you just painted the kitchen … What difference does it make if you’ve lost a third of your net wealth? When the city’s flush, your co-op is worth a fortune; when there’s a budget deficit and garbage piled up on the sidewalk, it’s worth a lot less. So what? You’re still going to live there. When the market is up, you feel rich; when it’s down, you feel poor. Meanwhile, life goes on. “We’ll be working until we’re 90 anyway,” says a psychiatrist friend of mine.

Maybe the Dow will be back to 14,000 by then.

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Up-to-the-Minute Market Reactions
The Fall of the I-Banker
The Trickle-Down of Misfortune

The Nine Stages of Economic Calamity