Rich Feel Good Again About What They Do Best: Caroline Baum
The world is beset by crises, from an earthquake and tsunami in Japan to revolution and repression in the Middle East. For one small segment of the population, however, it’s party time.
The rich are spending again; the more conspicuous the consumption, the better. Gone are the exhortations to bankers in the dark days of 2008 and 2009 to temper extravagant behavior, act more like an everyman, shun the limo in favor of a yellow cab, and tone down the annual Christmas bash.
Millionaires, nay billionaires, are back with a vengeance. Many of the newly wealthy are Asian.
I’m not sure what it all means exactly. The rich always have money to spend, in good times and bad. While their relative advantage is greater when low- and middle-income families are struggling, today’s robber barons want to appear sympathetic to the plight of the working class.
The fact that flamboyant spending is making a comeback may be a sign that, Japan’s human tragedy notwithstanding, the worst is over for the global economy.
Here are a few examples of what the wealthy are spending money on these days:
No. 1. Dog-Eat-Dog or Dog-Eat-Abalone?
Last week, a Chinese coal baron paid a record $1.5 million for an 11-month old red Tibetan mastiff named Big Splash, or Hong Dong in Chinese.
Tibetans believe mastiffs have the souls of departed monks and nuns who didn’t qualify for entry into heaven or reincarnation.
While Big Splash’s buyer may believe 10 million Chinese yuan is a small price to pay for a shot at the Big House in the Sky, it sure sounds like a lot of money, even for a working dog. (Don’t tell my dachshund Greta I said that.)
Big Splash will be kept in the style to which he is accustomed, with a menu of Chinese delicacies, including sea cucumber and abalone, to supplement his kibble.
According to the American Kennel Club, Tibetan mastiffs have exceptionally strong jaws and teeth and a “legendary fondness for wood” that can lead to destruction in the house.
That’s one way to deal with a housing glut! Besides, if you can afford $1.5 million for a furry friend, replacing the baseboards every so often isn’t going to set you back.
No. 2. My Own Private Jumbo.
For tennis fans, Roger Federer’s promotion of NetJets gave private air travel a certain panache. Today’s billionaires don’t want any part of time-sharing. They’re lining up to buy their own private jumbos.
According to the Wall Street Journal’s Wealth Report Blog, sales of Boeing 747s and Airbus A380s to private clients are breaking records.
“Sales of private jumbo jets are so strong that Airbus and Boeing now have special sales forces devoted to potentates and the hyper-rich,” according to the blog post, referencing a Feb. 11 article in Aviation Week & Space Technology.
The two companies delivered 37 VIP jumbos last year and have a growing pipeline of orders.
It may seem extravagant for Saudi Prince Alwaleed Bin Talal to upgrade his Boeing 747 to an Airbus A380, which can seat as many as 853 people, but with so much increased capacity, he won’t have to spring for hotel accommodations.
No. 3. Indecent Exposure.
If you want a home with a panoramic view of the skyline, by all means build a 27-story skyscraper for your residence.
That’s what India’s richest man, Mukesh Ambani, chairman of Reliance Industries Ltd., did when he built what’s believed to be the world’s most expensive home in Mumbai. Antilia, the $1 billion, 400,000-square-foot home named after a mythical island, has nine elevators, a 50-seat theater, ballroom and helipad. The spa is complete with lap pool, sauna, yoga and dance studios and a juice bar.
The first six floors of the building are dedicated to a parking garage -- just for the Ambani family, guests and domestic help.
With an estimated half of Mumbai’s residents living in slums, it shouldn’t be hard for Ambani, his wife and three children, to find a suitable staff of 600 to serve them.
No. 4. Planes, Trains and Helicopters.
While it’s still customary in some parts of Asia for a bride’s family to offer a dowry to the groom, it’s not every day the husband-to-be gets a $4 million Bell 429 helicopter.
The wedding itself cost anywhere from $22 million to $55 million, according to press reports, making it the most expensive on record.
The son and daughter of two wealthy, well-connected Indian families celebrated their nuptials over a seven-day period with 2,000 of their closest friends.
“The froth does seem to be forming again among the Dom Perignon set,” Robert Frank, who writes the Journal’s Wealth blog, said in an e-mail.
Froth! Now there’s a word I haven’t heard in a long time.
Right before he stepped down as Federal Reserve chairman in January 2006, Alan Greenspan conceded there was some of that in the housing market. The rest, as they say, is history.
Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the editor responsible for this column: James Greiff at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.