There’s no doubt. For those who work in the City, last week was their 9/11.
The assault on the twin towers of greed and capitalism looks like felling
hundreds of thousands of workers in the months ahead, in a Trollopian saga
that gets twistier and blacker by the day.
Notting Hill, in west London, where I have lived since I was a teenager, is in
the eye of the money storm for it’s right here, in these storeyed terraces
and crescents, and in these stuccoed mansions, that the big swinging dicks
brought their millions in bonuses and – bankers went the neighbourhood.
Suddenly every car in the driveway was a Maserati or a Bentley and, in due
course, a Prius, too. Fleets of vans double-parked in the streets while
builders put in wet rooms, new kitchens, lifts, chill-out zones and media
rooms and gardeners landscaped the outside areas and feng-shuied the
windowboxes.
As for me, I carried on living my normal life in my lovely shabby house (and I
promise, I don’t normally drive a Bentley wearing not much more than a huge
rope of fake pearls – pictures always lie). Basically, I stood back and
gawped and took notes as the neighbourhood took off like a jump jet around
my ears.
When I was pregnant with my third child, the wife of a banker called to tell
me that she was sorry I was leaving.
“I’m not leaving,” I protested. “But you’ll have to,” the woman insisted.
“Your house [3½ bedrooms, semidetached] will be much too small for all of
you.” Then she shuddered. “You’ll be like council house tenants!” It was at
this point, 10 or so years ago, that I realised: Notting Hill didn’t do
normal any more.
Let me take you back to the summer of 2007. I am playing lawn tennis next to a
ladies’ four, who are thwocking the ball with elegant strokes that speak of
thousands of dollars sunk into backhands in smart country clubs in Nantucket
and the Hamptons, the Hurlingham or the Riverside.
They are talking in between rallies about the pool that one of them is putting
in under their London house that’s cost twice as much as they had expected,
because they are having to dig down another 20ft. “Mike’s now insisting” –
indulgent laugh – “that it’s not worth doing unless there’s enough headroom
to have a diving board.”
This is nothing new in my manor. Sir Ronnie Cohen, the founder of Apax and a
Labour donor, is in the process of putting in a 50ft pool and steam room
underneath his Notting Hill house, which is in fact three houses knocked
into one. He lives in an area called Supermodel Central because Laura
Bailey, Elle Mac-pherson and Claudia Schiffer all reside within mwahing
distance. Come to think of it, an underground swimming pool is almost
becoming the price of admission into the ’hood.
Anyway, swimming pool lady’s seemingly winning lob is returned by her
opponent, who mentions her plans for an indoor squash court. But it is the
woman at the net who finally ends this extended rally of one-upmanship with
a vicious overhead smash.
“I’m longing for you guys to come to Warwickshire to the castle,” this lady,
shod in immaculate tennis whites, confides in gloating tones to the entire
club. “I’ve decided to put in a moat after all.”
Four months later. I am at a shoot a couple of hours north of London with a
few hedge-funders. I am standing behind the peg, near enough for
conversation but far enough away to avoid a faceful of shot, when my gun’s
mobile beeps with a hot dinner invitation.
The hedgie curses softly, mentions that his driver has the day off (the
implication being that this is most inconvenient, even when his boss has
been in Lincolnshire for two days indulging in field sports). “I’m driving
back to west London,” I cry, thinking how nice of me to offer. “You can come
with me.”
“Thanks, but I’m good,” he says, lifting his mobile to his ear. I found out
later that he had returned from the shoot by helicopter, either because he
couldn’t be bothered to chat in the car or because he wanted to go back to
Chelsea to change for dinner. Both entirely good reasons, but mainly, of
course, because he could afford to and it was faster.
Charter a helicopter? Put in a moat? Fly the kids to the Maldives at half-term
on a private jet? Take over an entire Michelin-starred hotel for your
birthday or fly your 300 closest friends to the south of France for a party?
Why on earth not?
In London 2003-7, I remind you, money was no object among the banker set.
Located conveniently midway between the Tokyo and New York time zones, and
with a Labour administration that described itself as “intensely relaxed
about the super-rich”, not to mention distinctly unbothered about
regulation, London became the world’s most profitable entrepôt for the money
trade, while Notting Hill, to the west of the City, was the natural honeypot
for their wives.
Drawn to the area by its excellent private schools (with deliciously Edwardian
tailored tweed uniforms in the winter, gingham and boaters in the summer),
by the vast acreage of private and secure communal gardens (reserved
exclusively for property-owning residents or their tenants) and by its
supposedly groovy-creative vibe, the bankers did not take long to annex
Notting Hill to Manhattan.
And in the time, it seemed, that it takes for the Tube’s Central line to
convey a financier from his Holland Park mansion to his desk at Canary
Wharf, the “Amschluss” of my west London postcode was complete. Suddenly
everyone either seemed to be American or working for an American investment
bank.
On the Fourth of July, the Stars and Stripes hang from Victorian sash-windows,
noisy fireworks go “whee” and explode in a cascade of light in the violet
summer sky above the stately stucco terraces and men in aprons barbecue
Oscar Mayer hot dogs on vast, gas-fired grills and serve Bud. There are
Super Bowl parties, baseball games and pitching practice in Hyde Park at
weekends.
At any one time, 65% of the housing stock available for rent was taken by
Americans and boy, did they take the place by storm. British landlords were
asked – no, told – to install power showers and security lights and new
kitchens. Dry cleaners were told to stop losing clothes or they would be
sued. Delis started staying open till late, so bankers on their way home
could pick up some black cod and miso and steamed baby leeks for supper from
the Grocer on Elgin if their wife was at her book group, or her choir, or a
meeting to plan the school fete or a charity auction.
But that was then. And this is now. Last week the credit bubble popped. Lehman
Brothers collapsed, Merrill Lynch got taken over – and even the hallowed
names of Goldman Sachs (“on the rack”) and Morgan Stanley are threatened.
How much has changed in the bankers’ ’hood since the trading screens turned
red and the television cameras showed pictures of weeping Lehman employees
carrying tragic boxes of running shoes? Okay, let’s take a look-see around
my neighbourhood to see how the bonfire of the bankers is affecting their
home front of Notting Hell.
First up, I notice a lot more men than usual ambling up the Portobello Road in
flip-flops and chinos on a weekday. In Tesco, in ritzy Holland Park Avenue,
a new discount brands section (bleach, cornflakes, fizzy lemonade) has been
placed front of store.
In Holland Park Starbucks, there are men at every table hunched over
venti-sized cups of latte and The Wall Street Journal, BlackBerrys welded to
their hands. They are wearing button-down shirts and suits. An hour later,
when I return, they are still there. I know there are three Lehman
casualties in the next road alone. I don’t know their names but I wonder if
they are these men in Starbucks.
In the newsagent at the top of Ladbroke Grove, my old friend Mrs Punjani says
she hasn’t known anything like it for 37 years. She pulls down an account at
random on the screen of a customer who lives in Kensington Park Gardens, one
of the swankiest billionaires’ rows in the royal borough. He is a great
customer, an American banker, one of her best, with an average weekly spend
of £160 on newspaper deliveries. He has just passed by in person to tell Mrs
Punjani to cut The New York Times Monday-Saturday and its Sunday edition
from his order. Oh yes, and the Financial Times Monday-Saturday. “He said he
had no need to read about the financial situation any more,” Mrs Punjani
reveals.
Lucy Kennedy, the owner of Happy Dogs, has just been informed that her
services to walk two dogs for two hours an afternoon are no longer required
and, at a stroke, she has lost a fifth of her client base. The owners are –
or were – at Lehman Brothers. “You would have thought that, in the scheme of
things, my daily rate of £17.50 wasn’t that much, but maybe those with the
most money are the best at cutting corners,” she reckons.
At the Jackson-Stops estate agency in Portland Road, Marlene Kemp confirms
that it’s tough at the top. “No one wants to buy, everyone wants to rent,
and I know of two big properties on prime streets where the American tenants
have left rather suddenly,” she tells me.
“There’s no activity on rentals between £3,000 and £5,000 a week. But
one-bedroom and two-bedroom flats letting between £500 and £800 are popular
with younger people at a lower level, and all prices are – you might say –
very negotiable.”
I bump into the blonde American wife of an investment banker (his mantra is
“Everyone in employment’s a winner”). She is looking skinny-fabulous. She
always does. Which might be the moment to share confidences about City
marriages and “trophy” wives.
My friends’ marriages are thankfully so far intact, as far as I know; but
according to the law firm Pannone, the rate of inquiries by wives into
husbands’ assets has risen threefold during the credit crunch, and no doubt
some wives want to quit while they’re ahead. (As Sandra Davis, the head of
Mishcon de Reya’s family department, has said: “When money looks like flying
out of the window, love walks out the door.”) While the husbands were
bringing home the bacon and spending more time on flatbed seats on
transatlantic flights than in the marital bed at home, it was their wives’
job to look beautiful, rich and concerned about the environment at all
times, while, of course, throwing glamorous A-listed parties and not being
traded in for a younger, peachier model. Which is, trust me, a lot more work
than it sounds.
Yes, these wives worked neither in the home nor outside the home, but their
hands were full, even with the help of a full-time PA. Just keeping staff
and two or three houses running, the social diary crammed with all the right
parties in all the right places, a spot of light charity work, the children
tutored and the holidays booked, not to mention the endless round of
personal admin (ie, beauty treatments, blow-dries, facials, mani-pedi, trips
to Beauty Works West, Beautcamp Pilates and much, much more) is a full-time
job. And they were jolly good at it.
Clad in caramel cashmere, this American City wife is not thinking about trying
to divest her husband of his assets while he still has some. Far from it.
All she talks about is the damage to small businesses when the dollar-driven
parts of the City take a big hit.
“All the services that British wives are loath to use, like sound consultants,
spatial organisers, children’s room designers, florists, personal trainers,
caterers, that have all mushroomed and multiplied to supply the Americans in
London, are going to go because they are non-essential,” she says.
“Nobody feels sorry for the bankers but if you lose your job it hurts, whoever
you are, however much money you’ve got. Charity’s going to suffer, too. It
is those American wives who cut the cheques.”
At this point I have to stop and take a moment. I try to find it in my heart
to feel sorry for the very men, who with their reckless greed and ambition
and arrogance, not to mention the bonus bonanza that averaged $30 billion a
year, helped to trigger this global financial crisis.
So I call a girlfriend of mine who is dating a very big cheese in one of the
two US giants that are still standing (if either Morgan Stanley or Goldman
Sachs goes under, there will be, shall we say, an awful lot of gleaming,
freshly painted stucco real estate on the market). Her boyfriend spent most
of last week closeted with Gordon Brown, saving HBOS by flogging it to
Lloyds TSB, and existing on only a few hours’ sleep a night.
“I see the amount of work they do: it’s inhuman,” she tells me, after
describing a week during which his mobile – set to vibrate – was buzzing so
persistently that it was as if it suffered from St Vitus’s dance.
“They’re not so much masters of the universe as slaves to their clients, and
they work bloody hard for very long hours and family life really suffers.”
But here’s the thing that, try as I might, prevents me from sobbing with
sympathy. The lead dogs are still bullishly streaking across the altiplano
of capitalism. It’s the rest of the pack that’s being devoured wholesale by
market bears.
As I walk down Lansdowne Road, making calls, a thirtyish father leaves his
£10m house and a little boy in the grey and red Wetherby cap and blazer hops
into a Bentley Continental GT.
I speak to a yacht dealer with offices in Mayfair and St James who is at the
Southampton boat show. He tells me that his order book has never been fuller
and he has just taken orders for two £20m, 46-metre yachts “with all the
toys” for delivery in 2012.
Then Ben Elliott of Quintessentially, the top people’s valet service, tells me
what we already fear – that economic meltdown is “only affecting people
further down the food chain”, and that in times of uncertainty the flight to
quality actually helps the very-top-end type outfits such as his: “Many
people are doing very well out of banks failing.” (Yes, I know. I sat next
to a nice, quietish New Yorker at dinner not so long ago who made a $3
billion profit by calling the sub-prime slump correctly.)
Then the American wife calls to say that she has just heard that a guy she
knows has decided to ditch his private jet, not because he can’t afford to
keep it but because it looks bad. “When your stock portfolio is crashing and
all your friends are losing their jobs, you don’t get such a kick out of
it,” she tells me. “He is beyond rich and always will be.”
Back home I chat to a neighbour in shorts who baled out of the City a couple
of years ago. He is pouring with sweat and I wonder if he has been on a run.
We stand in the middle of our communal garden and gaze around at the emerald
lawn, the gleaming paintwork, the tidy box hedging and the scented white
planting.
“These are dark days and it’s going to get darker,” he says, “but round here”
– he gestures to the five-storey semi-detached residences, where Filipinas
toil in laundry rooms, colour-coding underwear – “the super-rich will always
be fine.
"These guys bought their houses ages ago with one year’s bonus. As ever, it’s
the little people who will suffer. The senior managers, they’re set for
generations.”
As he says, dark days. I’m not sure if he knows it, but my neighbour is
echoing the inaugural words of Franklin D Roosevelt, who famously referred
to “dark days” as he tried to guide the United States through the last
national economic catastrophe. When FDR spoke, gold was being taken out of
banks and the New York stock exchange and the Chicago Board of Trade had
closed, as had banks in 32 states.
Things aren’t as bad as that, yet. But they could be and the only guys
who are sitting pretty are looking down on the wreckage from the top of a
cash mountain. The truth, that will be unpalatable to many to hear, is this:
the senior guys in their forties and fifties, the ones who tell me over
dinner that they are “the David Beckhams of the financial world”, have
salted away so many millions that, according to one analyst, “their families
won’t have to work for a thousand years”.
But for almost everyone else in the capitalist system, from bank employees to
pensioners, it’s all messed up. Unless you’ve been short selling, anyone
with any assets is down. It’s not surprising that people feel devastated,
angry and deceived.
As for me, well, for the first time since I moved to W11 in 1978, I feel a
batsqueak of schadenfreude about the bonfire of the bankers, but also a
surge of something akin to relief that I have neither stocks, shares, a
pension, luxury car, nor cash to lose. All I’ve got is a mortgage to pay.
The message from the Notting Hill front line of the crash of 2008 is neither a
borrower, nor a lender, nor even a saver be. Travel light. Open a Post
Office saver account or buy Damien Hirsts, as something pickled in
formaldehyde seems to be a safer store of value than a high street bank
right now.
The moneychangers have fled from their high seats in the temple of
civilisation. But the masters of the universe are still – for the moment –
as safe as their flash houses in Manhattan, the Hamptons and Notting Hill.
Rachel Johnson’s novels Notting Hell and Shire Hell are published by
Penguin, £6.99
High maintenance: the outgoings of a banker’s wife
Notting Hill mansion £5m-£10m
Sports car £70,000
Holidays £100,000 a year for trips each half-term, annual skiing break
and summer jaunt
Entertainment £50,000 a year for dining out, dinner parties, theatre
and concert tickets
Clothes £35,000 a year
Private school fees £75,000 annually, based on three children at
£25,000 each
Private club membership £3,000 a year
Twice-weekly shop at Planet Organic £26,000 a year
Nanny £30,000 a year
Household staff £60,000 for cleaner, gardener, PA, etc
Hair £5,000 a year (weekly blow-dry at £50 and monthly cut and colour
at £200)
Facial £1,800 a year
Spa treatments £4,160 a year for massage, Botox, skin therapies etc
Personal trainer £13,000 a year (five weekly sessions at £50 an hour)
Dog walker £6,300 a year (£17.50 a day)
If these 'masters of the universe' have made so much money while the future taxpayer is to be tapped to fix their mess, why not increase their taxes? Then at least they can share the pain with the rest of us - a property tax is one that they wouldn't easily evade, for example.
MB, Edinburgh,
To Lucy Kennedy, owner of Happy Dogs. If your former clients have lost their jobs, perhaps they are less trying to save £87.50 a week. (A not insubstantial amount.) But it is more that as they don't have to be at work each day, THEY CAN WALK THEIR OWN DOGS!!!
A O'Brien, London,
To be fair you can get the Central Line to Mile end and make a not unpleasant walk to Canary Wharf or change to the DLR or go a little bit further to Stratford and get the DLR from there.
Mikko, Drumnadrochit, Scotland
1) The Central Line doesn't go to Canary Wharf.
2) Isn't it odd that certain nationalities / societies can be lampooned, but not others? Try replacing 'American' references for 'Indian'. Or Nigerian. You won't be allowed to - yet all areas overtaken by foreign groups deserve this scrutiny, no?
barry, london,
The super-rich in London still have to contend with the physical criminals that surround us all.
Their actions will not have reduced the number !
As the UK lurches towars a third world economy, we'll probably see even the rich suffering from crime instead of if merely being an inconvenience
cap, london, uk
They sound even worse than Hugh Grant and the Welsh bloke.
Bill Peter, Kuala Lumpur, Malaysia
The game's up my dear!
Charles Levi, Notting Hill, London, UK
Comparing last week to 9/11 is absurd. While this is a difficult time and people will need to re-adjust their lifestyles, no one lost their friends, family members, and colleagues in a terrible terrorist attack. So, no, last week was not their 9/11.
Robin, London, UK
Presumeably Nick Leeson is now innocent
jeff, newport, UK
I think I'm having second thoughts about socialism. Maybe, it's not so bad after all....
Joseph Wright, Seattle, US