Attention peasants: The Greubel Forsey GMT at $549,000
Source: Greubel Forsey
I have been hearing a lot about the spending habits of the 0.01 percent lately.
Perhaps, a little bit too much.
Don’t worry, this isn’t going to be a class-warfare rant or a treatise on living the simpler, less materialistic life. Rather, it is a suggestion to some folks that perhaps they might want to make some of their conspicuous consumption a little less conspicuous.
For example, I learned last week that Tiffany & Co. had a secret room for the big spenders. That’s because when you’re dropping $20 million on a necklace that, according to Tiffany’s vice president, is being bought with literally a wheelbarrow full of cash, you want some, you know, privacy.
Or how about those folks who want to learn how to drive a $500,000 car very, very fast and they need to take a specific class? It’s tough luck if you don’t have a Lamborghini Aventador Roadster yet, because they are sold out. So is the new $1.4 million Ferrari LaFerrari. You can still buy a Bentley GT or a Ferrari California T — assuming you don’t mind hearing the derisive snickers of the parking valets behind your back.
The condo in the peak of theWoolworth building is going for $110 million. That isn’t the building, just one apartment. That’s a relative bargain, compared with the Hamptons estate that just was purchased for $147 million dollars.
But it wasn’t a car or a diamond necklace or a house that made me realize that perhaps the ultra rich have become a bit tone deaf; it was a watch — or a “timepiece,” as the brochure describes them. In an advertisement in last week’s New York Times, I saw a picture of the Greubel Forsey GF05. As the picture showed, it’s a busy little number in platinum and black. A quick Google search revealed a selling price of $549,000.
I half expected to see a tagline that read “For when you need to tell the time, but you just can’t do it without spending the equivalent of 36 years of minimum wage salary.” A timepiece that costs almost triple the U.S.’s median existing-home price ($201,700) does seem a tad pricey to us peasants.
Not too long ago, in the latter days of the financial crisis and the early part of the slow and painful economic recovery, conspicuous consumption became a bit of an embarrassment. The world had sidled up to the abyss, peered over. That look into eternal darkness seems to have chided some of the wasteful spending of the 0.01 percent. Ultra-lux goods saw sales plummet. It almost seemed that people began to reassess their lives and priorities.
Just kidding, that was an image issue. The stock-market rally of almost 200 percent since then has emboldened the biggest of the big spenders to return to their profligate ways. And who can blame them, now that the Federal Reserve’s Flow of Funds has reported the total household net worth of the U.S. is now $81.8 trillion dollars.
That is a lot of expensive cars, houses and watches. We have money to burn, apparently — and we are.
What does the spending with reckless abandon actually mean? Are we back to business as usual in America in the midst of the fifth year of recovery since the crisis? Does frivolity with enormous sums of money represent the sort of mania we only see at bubble tops?
I have no idea. But it certainly makes me a bit nervous to see the very, very wealthy party like it’s 1999. Like the VIX, the Shiller cyclically adjusted price-earnings ratio and venture-capital investing, the spending habits of the 0.01 percent are a data series worth watching.