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Richistan: So 2007


As wealth boom deflates, one website devoted to conspicuous consumption holds firm.


If you're looking for some dark humor these days, why not pick up Wall Street Journal reporter Robert Frank's Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich?

It feels like it was published in a different era. In fact, it came out less than 14 months ago when the Dow Jones Industrial Average exceeded 13,000 and would travel north of 14,000 shortly after.

The wealth boom sure did deflate quickly, eh? Even the uber-rich have been exposed as mere mortals - Sheldon Adelson's $30 billion paper loss, Lakshmi Mittal's $30.5 billion hit and German billionaire Adolf Merckle's bad $500 million bet on VW shares.

No question: The Era of Excess is kaput.

As Minyanville contributors have astutely pointed out, we find ourselves in the Age of Austerity now. The backlash against those clinging to the old ways is harsh - just ask the heads of General Motors (GM), Ford (F) and Chrysler about the now-infamous Private Jet-Gate. Knowing how narrow-minded and juvenile Congress has become, I wouldn't be surprised if that was the definitive factor in a decision to dismiss the automakers without a bailout.

Looking back on the excesses near the top -- between 2006 and 2007 -- it all feels so surreal. Like the Roaring Twenties which prefaced the Great Depression, the rich became richer while the poor languished. Instead of jazz clubs you had bottle service in Manhattan's Meatpacking District. They had Herbert Hoover to oversee the crash; we got George W. Bush.

We also got the website Launched in 2006, it brings readers the most ridiculously expensive goods and services in New York. Apparently, the 2 things its founders "never joke about are money and money." Indeed.

Over the years, the site has profiled everything from New York's most expensive hamburger to its priciest beer without a shred of irony.

Even in the state of luxury, something is surely rotten. These days, Fifth Avenue is as quiet as a classroom during final exams. According to a recent New York Times article, "Even the more luxurious stops, among them nearby Bloomingdale's, Bergdorf Goodman and Salvatore Ferragamo, are discreetly cutting prices, or are about to."

As Robert Frank recently wrote in "The Wealth Report" on the Journal online, there's even a red-tag sale on yachts. For those who plan to keep theirs, remember your history: In 1932, wary of insulting the masses of unemployed Americans, J.P. Morgan Jr. kept his 343-footer, Corsair IV, in the boatyard.

No positions in stocks mentioned.

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