Financial Pinch Being Felt Amongst The Wealthy As Some Struggle To Maintain Appearances

In New York City, The New York Times reports on the apparently devastating problems being felt by some amongst the wealthy caused by recent financial struggles:

• One of [Manhattan divorce attorney Nancy Chemtob's] clients recently confessed that his net worth had decreased to $8 million from more than $20 million, and he thinks that his wife will leave him. He has hidden their fall in fortune by taking on debt to pay for her extravagant clothes and vacations.

• Hairstylists and private jet rental companies say the wealthy are cutting back on luxuries like $350 highlights and $10,000-an-hour jet rentals.

• “Even if they’re not in danger of not paying their mortgage, there’s still a psychological change,” said Chris Del Gatto, chief executive of Circa, which has watched its business jump by 50 percent in the last year as wealthy clients sell their spare diamonds and Rolexes.

• Some older couples, he said, are selling estate jewelry to help support their children who have lost Wall Street jobs. Bankers are paring down their collections of Patek Philippe watches. Wives from Greenwich and Scarsdale are selling 2-carat to 35-carat single-stone diamond rings. One recent client explained to Mr. Del Gatto that she was selling $2 million in diamonds she rarely wore, because her friends wouldn’t notice that they were gone. “She said, ‘If I sold my Bentley or my important art, they would notice,’ ” he said. “That we hear, in differing examples, every day.”

• One New York real estate developer cut his budget to less than $250,000 a year from $1.5 million a year. “A year ago, he would have only flown Gulfstreams,” [Justin Sullivan, managing director of Regent Jet, which leases private airplanes] said. “Now it’s moving to the point where he’s flying Beech jets and Learjets.”

For more on the devastating effects of the recent financial downturn being felt by the wealthy, see It’s Not So Easy Being Less Rich.