Empty tables outside Pierre’s in Bridgehampton
Last weekend, market strategist Nicholas Colas ofConvergEx Group was in the Hamptons at a gas station. He looked across the pump and witnessed an event that he could only describe later with “horror.”
“A fellow dressed in typical ‘I’m an affluent hedgie but still a really chill dude’ polo shirt and white linen shorts filled up his Ferrari with regular gasoline rather than the recommended high-octane blend.”
Colas wondered “Things can’t be that bad, can they? Saving a few bucks on gasoline but potentially ruining one of Maranello’s artistics creations?”
Colas started noticing other disturbing signs of rich-people austerity. At Pierre’s, a go-to gathering place for the wealthy in Bridgehampton, reservations are no longer necessary on a Saturday night. Delta’s direct flight from JFK to Nice, on the French Riviera, Colas found, still had seats for the same day. And the Hotel de Paris in Monaco still had plenty of rooms and suites available – as did the Hotel de Crillon and the Ritz in Paris.
“Despite the old saying that ‘There are no bears on Park Avenue’, there does appear to be a distinct chill in the air when it comes to the mood” of the financial elite, said Colas.
Colas’ horror stories from Richistan echo similar findings in recent surveys. The wealthy are pulling out of stocks, dumping money into hard assets, and generally feeling down on the economy and government. Instead of confident capital, we have miserable millionaires.
It’s not that their own bank accounts look so bad, but the rich don’t see the world’s wealth-creation machine sputtering back to life anytime soon. And when your chief priority becomes saving your fortune rather than making one, you stop jetting to the Riviera and taking risk, and you look to save cash – even on gasoline.
This would all be merely a source of amusement for the non-rich public, except for the fact that the one percent do the lion’s share of investing and spending right now.
Their chill could soon become the world’s cold.
-By CNBC’s Robert Frank