The world’s billionaires are back with a vengeance, writes 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
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
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
$1.5m for an 11-month old red Tibetan mastiff named Big Splash, or Hong Dong in
Tibetans believe mastiffs have the souls of
departed monks and nuns who didn’t qualify for entry into heaven or
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.
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 $1.5m 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
According to the Wall Street Journal’s Wealth
Report Blog, sales of Boeing 747s and Airbus A380s to private clients are
“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
you want a home with a panoramic view of the skyline, by all means build a
27-story skyscraper for your residence.
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 $1bn, 400,000 sq ft 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.
first six floors of the building are dedicated to a parking garage -- just for
the Ambani family, guests and domestic help.
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
No.4. Planes, Trains and Helicopters
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 $4m Bell 429
wedding itself cost anywhere from $22m to $55m, according to press reports,
making it the most expensive on record.
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.
froth does seem to be forming again among the Dom Perignon set,” Robert Frank,
who writes the Journal’s Wealth blog, said in an email.
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.
Baum is a Bloomberg News columnist. The opinions expressed are her own)