Billionaire New Yorkers hedge their bets on the poor
Today, mis amigos, we're going to talk about money. Big money. Wonga. Oodles of cash. The sort of wealth that makes your toes curl up with envy.
But first, a bit of background. One of the things I have often observed about New York is that, outside of Madison Avenue, Fifth Avenue and the Upper East Side, it doesn't smell of money. In fact, if you include the outlying boroughs, it smells rather more of decay than wealth.
The same is true, of course, of just about any large city. The streets of Dublin 4 may be paved with gold, but there are still parts of the North Side - to say nothing of Ballymun - that reek of failure.
Belfast is hugely different to the city I grew up in, and much richer. Indeed, I read last week that it now features as a fun destination even for people who are not interested in terror tourism. But you don't need me to tell you that not all of its citizens have enough money, or in some cases enough food on the table.
So it is with New York. Millions of ordinary New Yorkers have less than they might reasonably hope for in the 21st century. Four out of 10 don't have health insurance, so that a visit to the doctor or dentist for anything other than a catastrophic event is out of the question. I see old people shuffling forward in the check-out lines in my local supermarket with bundles of coupons in their hands, hoping to get 10% off their purchases of basic items. On the subway and on street corners, people, usually black or hispanic, hold out paper cups in the hope of scoring a dollar bill or, failing that, nickels and dimes.
And yet and yet (and here I am warming to my theme), there is more money in New York than you could throw a stick at.
Last week, I had lunch with two visiting friends, one of whom went to Oxford with a New York hedge fund specialist.
What does this mean? Let me throw some more obscure phrases at you: satellite asset management; absolute return oriented funds; risk arbitrage, high yield and distressed securities. And what do these add up? I will tell you. They add up to wealth beyond the dreams of avarice.
Money, not advertising, or communications, or entertainment, or the media, is the real business of New York. Wall Street - or at least what Wall Street represents - is where it's at, not Times Square or Central Park.
That man in the well cut suit walking down Park Avenue, perhaps or perhaps not dropping a dollar into a proffered paper cup, could easily be worth a billion dollars.
My friend's friend took his private jet down to Atlanta the other day just to see some pictures he thought he might buy. He uses the same jet to fly off at the weekends to his squillion-acre ranch in Colorado. When his son got married a couple of years back, he hired an entire five-star hotel for the use of his guests.
And he is far from alone. Billionaires are a dime a dozen in New York. They don't all live in the Upper East Side. Many of them have their principle homes in leafy Westchester, or southwest Connecticut, or the more pleasing parts of rural New Jersey. But New York is where they make their money.
The salaries - more properly the incomes - of these people are astonishing. To join the club (and if you have to ask which club, don't ask) requires a minimum of $$25m a year, and in some cases 10 times that. These people don't breathe cash, they ooze cash. They have so much of the stuff, they don't know what to do with it, except, of course, that they do. They use it to make even more money, and then invest that cash in a hedge fund.
Nice work if you can get it.
But there is a second, parallel phenomenon at work. The other big business of New York is philanthropy. People make a pile, then they establish trust funds and start giving it away. In a nation that elevates self-reliance and personal responsibility far above the idea of a welfare state, rich givers are what hold society together.
Gifts of a hundred million dollars are not uncommon. You all know about Bill Gates and Warren Buffet, the two wealthiest Americans, who plan to spend the rest of their lives funding good causes. But giving it away is now just as competitive as making it in the first place.
Hospitals, research institutes, think tanks, universities, museums, art galleries, National Public Radio: these are the main beneficiaries of hedge fund philanthropy. That is why Harvard, Yale, MIT, the Getty Museum, the Museum of Modern Art, the Metropolitan Opera and a thousand and one other recipients of giving are awash with cash.
Unto those that hath shall be given.
But cancer funds, Aids charities, refuges for battered wives and neighbourhood retirement homes also benefit from this continuing tsunami of largesse. In fact, they depend on it.
Thus, arguably, the system works. Though the State may not provide more than the basics, Big Givers keep America going.
As you would expect, giving is tax-efficient, and there is a definite buzz to be had from seeing your name go up above the front door of a museum extension or a new suburban hospital. As a character in the cable TV sitcom Larry Sanders remarked, "I give of myself - and it pays really well" .
But I have to go. There's a Fabergé Egg coming up at a sale in LA, and my take-off slot at La Guardia is in 30 minutes.
Give gladly this Christmas.