Has anyone out there noticed that all the numbers we see these days have somehow morphed into mega numbers? The data seems suddenly to be from outer space, whether it’s about something important or trivial.
Let’s start with the trivial.
Mel Gibson decides to sell two of his homes. Stars do that all the time, but Mel’s pad in Malibu cleared nearly $30 million and his spread in Greenwich, Conn., went for $39.5 million. Those are mega numbers.
Then there’s the equity fund maven, Stephen Schwarzman, who pulls down a regular $400 million annually for running The Blackstone Group. He earned an additional $600 million the other day when his firm went public. Schwarzman is the fellow who famously spent $5 million on his birthday party at New York’s Seventh Regiment Armory, and has a fondness for exotic crabs — the ones that cost $400 apiece.
The mega number trend doesn’t apply merely to superstar real estate deals or to hedge funders. It wasn’t that long ago that a $500 million gross defined a worldwide movie hit, but now a billion dollars is the benchmark. And “The Simpsons Movie” astonished even its distributor by pulling in nearly $170 million around the world on its very first weekend. Could a 20-year-old TV toon scale a billion?
The stock market also dwells in a mega cycle these days. A 400-point dip wiped out about a trillion or so in presumed wealth two weeks ago, but that was merely a blip. Even as the Dow average plummeted, underground pipes in Manhattan were bursting and a bridge in Minneapolis collapsed, reminding denizens of big cities that no one wants to mobilize the mega-numbers needed to fix the infrastructure.
No one seems worried, either, whether the hedge funders are grabbing too big a slice of the pie. One of the Senate’s prize liberals, Charles E. Schumer, is fighting an initiative to more than double the taxes on hedge funds, thus inhibiting their ability to consume $400 crabs or to invest in tentpole movies. Schumer, to be sure, is one of the biggest recipients of hedge fund campaign funding.
Should we be worried by all this — or perhaps just find other things to focus on?
I like the model of Bill Gates, who, having carefully picked his successors, plans to step away from Microsoft next year to concentrate on managing his foundation. Talk about mega numbers — the foundation has $33 billion at its disposal.
Then there’s Mel Gibson, who apparently plans to step away from Malibu and has already found a more relaxing spot in Costa Rica — a 400-acre ranch that cost him a mere $25.8 million.
We can only hope that the progeny of Gibson, Schwarzman and Gates will also have the time to enroll in one of those new Financial Skills Retreats — summer camps aimed at educating the children of the mega-wealthy to deal effectively with their money. These schools of soft knocks teach the obvious skills, like buying or selling companies, and even offer side lessons in “marital agreements” (that means pre-nups). Given the fact that there are now more than 1.4 million households in this country worth $5 million or more, this is clearly a growing market, even forgetting the hedge funds.
I remember being shocked as a kid when I read that John D. Rockefeller had handed down more than $500 million to John Jr. My best friend in elementary school was a Rockefeller kid, and he was always borrowing money from me.
Now I know why: Compared to today’s progeny, he was a pauper.