The luxury New York real estate market isn't in the same doldrums as, say, Irvine, California, or at least not yet. But the New York Times is still taking time out to profile the little people who have been hurt by the general real estate collapse. People like John Devaney:
One by one, John Devaney sold his treasures, hoping to forestall what was in the end inevitable. He sold his Renoir and his Gulfstream, his home and his helicopter. Even his cherished yacht — gone.The poor guy was doing all trying to save his hedge fund, which numerous advisors had told him liquidate at a loss while he still could. Instead, he and his investors were all wiped out. But Devaney hasn't lost perspective. He still knows what it's all about. Just listen to the man himself:
I feel horrible that I’ve lost my own money and that so many people who saw the skills I have and trusted in us have now been hurt.Even in his loss, he realizes still that in the final analysis, it's all about him.
And, turning to comments on the story on Yves Smith's blog, Naked Capitalism, we find more on what those skills really were (with a little added emphasis from yours truly):
I have a limited partner ... that unfortunately had over 60% of his net worth tied up in Devaney's funds. He told me late last year that Devaney was telling his investors ... he could return between 20% and 60% of their capital ... if he "just had a little more time" and could effect "an orderly liquidation" of the positions. I told my LP at the time: "This guy is a fraud, a liar and he's going to lose 100% of your money by the time this is all finished." ... What a clown. Although I have little sympathy for my LP who was seduced by the siren call of 40% annual returns in "safe mortgage investments."As subsequent commenters noted, the underlying mortgages were paying nowhere near 40%. This had to be snake oil. But plenty of wealthy people, by any reasonable standard (you need millions in net worth to be allowed anywhere near a hedge fund) went for it.
But can't we have sympathy for the poor multi-millionaires who just want to add a little more cash to the already awesome pile? See how put-upon they are. Salt of the earth types, like Lady Lynn de Rothschild, now alienated from the Democratic Party because its presidential candidate seems elitist. Meaning that he thinks he knows better than she does what's best for the country.
Mind you, it's not like the rich themselves have all that much sympathy for the poor saps who took out those bad loans. But hey, it's America. Responsibility is for little people.