As Bear Stearns Collapsed, Chairman Bought $25 Million Condo!!!

Submitted by SadInAmerica on Mon, 04/14/2008 - 11:05am.

Ex-chairman heads to party where women will pose as statues... The ultrarich aren't going under!

Across the country, those of multi-million dollar means may be feeling the pinch in the stock market, but it isn't keeping them from spending lavishly. The multimillion and up housing market -- particularly in Manhattan and Miami Beach -- remains strong.

And it's not just the rich who are rich that are doing well.

"Days before the collapse of Bear Stearns, the bank's chairman, James E. Cayne, paid $25 million for a 14th-floor condo at the Plaza Hotel," the New York Times' Christine Haughney and Eric Konigsberg reveal Monday.

You might expect Cayne to be hiding from the financial crowd after Bear Stearn's collapse. He's not.

He's "invited to [a] May 10 party at the Plaza," Haughney and Konigsberg write. "It will feature a dozen female string musicians made up to look like statues and clothed in dresses of fresh flowers, like roses and gardenias. There will be caviar and Cognac bars, as well as a buffet designed to visually replicate 17th-century Dutch paintings from the recent Metropolitan Museum of Art exhibit, "The Age of Rembrandt."

Cayne stepped down to become non-executive chairman in January. He will become "one of the bank's top 'rainmakers,' working with key clients on mergers and acquisitions and other high-profile deals," according to the British Telegraph.

Above right is a view of the $40 million New York City condo purchased by Sun Microsystems co-founder Bill Joy in November 2007.

The paper documents the continued buying power of America's powerful elite.

One of the unaffected is Paul Parmar, a 37-year-old investor in health care, defense, luxury and media companies. Despite the economy's slowdown, health care companies continue to blossom.

Just two weeks ago, Standard & Poor's affirmed its ratings for health insurers Aetna Inc., UnitedHealth Group Inc. and Cigna Corp., "citing strong profit and competitive positions in the industry."

"In recent months, Mr. Parmar, who lives in Colts Neck, N.J., said he bought 140 acres in Mineola, Tex., and is spending $20 million to begin building a refuge there for abused tigers," the Times notes. "Since January, he said he added to his car collection with a $110,000 BMW 750 Li (for his girlfriend) and a Bentley Arnage for himself, for about $300,000. He is leasing a Maybach through Luxautica, an 'ultimate car club' that has annual fees of about $125,000."

Defense contractors are posting record growth. In 2008 dollars, yearly expenditures top peaks reached during the Korean and Vietnam wars, and amount to three quarters of the peak reached during World War II -- which called for 10 times the number of troops -- according to associate editor Jack Hough.

"Accordingly, the stock value of America's big defense contractors has swelled, on average, more than 150% in five years, about triple the broad market's gain," Hough adds. Lately, defense contractors have begun to feel the pinch -- most notably Boeing, which lost out on a massive Pentagon deal to France-based Airbus.

"On a spending level," Mr. Parmar said, speaking about a possible recession, "it doesn't affect me at all." That said, providers of luxury goods reported anecdotal evidence of a widening gap between the merely rich and the ultrarich. Clifford Greenhouse, who owns a household-staff employment company, said he suspects that the merely rich might be starting to lag behind their far richer counterparts, and are trimming their budgets. He cited reduced demand for chauffeurs — a relatively small-ticket service — yet ever-strong demand for private chefs, butlers and "household managers."

Real estate in Manhattan isn't suffering the woes of the subprime crisis hitting low-income and middle-class homeowners across the country. Buyers have plucked up 71 apartments in the gilded city -- all of them priced over $10 million. This compares with just 17 such units in 2007.

"And the GoldBar, a downtown lounge, reports that bankers continue to order $3,000 bottles of Rémy Martin Louis XIII Cognac."


John Byrne - April 14, 2008 - posted at

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Submitted by SadInAmerica on Mon, 04/14/2008 - 11:05am.