The Alps in Winter: It’s not the snow melting.

January 2009

Just returned to Milan from the usual European winter holiday–this time up in the Alps, surrounded by the wealthy and the ultra-wealthy in their SUVs and furs (we are not among those people).

So what?

1.  Some people have so much income that their lives are not–and will not be–affected by the on-going economic meltdown.  They will still pay $12 for a bratwurst while on the ski slopes and millions for the right apartment, no matter what the conditions.  In the Swiss resorts, this is not a small fraction of the people.

2.  Many others are being affected:  Cracks in the “perfect” mountain life are showing.  Please keep in mind that most people planned–and paid for–their holidays long before the meltdown started, so NOT going was generally not an option.  (Besides, the majority of people in these places go to family-owned–and modest–apartments.)  Evidence:  Dinner reservations off and, from the stories from the locals, few sales in the chic stores (Prada, etc.) and even in the sports stores (e.g., new equipment).

3.  The economy was the second topic in all lunch and dinner conversations (Obama was first).  Everyone assured me that he or she was not being affected.  When people go out of their way in conversation to make such assurances then I read the tea-leaves the other way:  They are on the phone screaming at their private banker.

4.  Noted for their absence:  Investment banking and hedge fund partners normally there.  Hmmmmm…

5.  Private-side M&A deals were actually discussed and–yes!!–several had closed!

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