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The Big Apple Loses Luster

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By Keith B. Richburg and Robin Shulman
Washington Post Staff Writers
Sunday, October 12, 2008

NEW YORK -- This big, brash, in-your-face city suddenly seems to have lost its mojo.

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At the beginning of the year, there was supercharged hype over the possibility that two, even three New Yorkers may be squaring off against one another for president. But now former mayor Rudolph W. Giuliani (R), Sen. Hillary Rodham Clinton (D) and Mayor Michael R. Bloomberg (I) are sitting on the sidelines while the action is in Chicago and Arizona.

In September, the New York Mets collapsed again before reaching the National League playoffs, and the Yankees were left out of the postseason for the first time since 1995. Baseball is being played in October, but not in New York.

On top of all that gloom comes the spectacular implosion of Wall Street, where some of the city's most storied financial behemoths -- Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group -- have been forced to merge or seek federal handouts to stave off bankruptcy. There are projections of thousands of lost jobs in the financial services sector, and the continuing plunge in stock prices has forced dramatic and sudden changes in the lifestyles of some of New York's wealthiest.

Bookings for private jets are way down, and yacht rentals are drying up. Young Manhattanites are giving up the multimillion-dollar lofts they can no longer afford. The decade-long real estate boom appears to have stalled, with new projects on hold and existing skyscrapers difficult to refinance. New Yorkers are scaling back plans for big weddings and bar mitzvahs. Even a staple of life in the city, eating out, has taken a hit.

"Businesses are having tremendous difficulty getting money, and there's a loss of confidence in the marketplace," said Kathryn Wylde, president and chief executive of the Partnership for New York City, a nonprofit alliance of business leaders. "Merger and acquisition activity has stalled. . . . Portfolios have gone to hell. It's rippling all the way through our system."

In true New York fashion, more and more of those directly affected by the financial crisis are finding their way to psychoanalysts' couches.

"I had a whole bunch of referrals -- I had five new patients just come in," said Alden Cass, a psychologist who specializes in the mental health problems of stockbrokers and investment bankers. "These are individuals who have become successful at taking control of things, and now they are reduced to a kind of helplessness."

Cass, who wrote the book "Bullish Thinking: The Advisor's Guide to Surviving and Thriving on Wall Street," spoke last week at a conference of mental health professionals in Santa Monica, Calif., explaining how they should handle an expected influx of new clients. When he returned to New York, he had 10 consecutive hours of patient sessions on his schedule -- people from affected firms, chief executives, branch managers.

"They come from the grandiosity of making a lot of money," Cass said, "and now they most certainly won't be getting bonus checks this year. How do they explain that to their wives? How do they explain that to their children in college?"

The average working stiff might find it hard to sympathize with someone who once earned a couple of million in salary and bonuses suddenly being forced into a $180,000-a-year lifestyle. But according to Cass and others, the shock here in New York is all too real. There are private-school tuition, house staff salaries, and huge mortgages on multimillion-dollar apartments in Manhattan and second homes in the Hamptons.

Marie-Claire Martineau, a real estate agent with the high-end agency Maison International, said several of her clients took out big mortgages on Manhattan lofts and are now looking to move into smaller spaces. "A lot of people have to rent their apartment because they can't afford it anymore," she said.


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