January 18, 2009: Washington Social Diary's Carol Joynt reports ... Airbus pilot hero Chesley B. "Sull" Sullenberger is now in Washington where he will be a specail guest at the inauguration of President Barack Obama. Captain Sully is staying at the luxurious Ritz-Carlton West End.
January 16, 2009: The big snow was piddlin.’ The cold was serious though, and still is.
I went down to Michael’s to have lunch with Alexandra Penney – she of the now long list of serious Madoff loser/victims.
The day she found out, December 11th, she was so shocked that she didn’t actually totally believe it. It still somehow sounded like a maybe. Or something you thought maybe you dreamed.
She went around her apartment cleaning things, tidying up, distracting herself. Then, being the thorough executive that she is, she placed a call to the Treasury of the United States since she thought she had all her money in Treasuries, through Madoff, to ask about the insurability of an IRA.
The Treasury didn’t take her call but a few hours later, someone called back, which surprised her. The man was helpful in clarifying things but not a relief from cares. She learned that more than 80 other people had called about the same thing. Many mysteries remain. Lawyers are steadfast and all around.
She got involved with Madoff about ten years ago when she had a nice chunk of an IRA and wanted to put it somewhere safe and providing income. A man she knew, who was 87 at the time (and now at 97, having been with Bernie Madoff for 30 years, he’s LOST EVERYTHING), advised her to put her money with Bernie.
She had never heard of him until that moment. She also didn’t like the idea of putting it all in one place. But her adviser was both older (obviously), and someone whom she held in respect and esteem as being smart and wise.
She soon learned from her adviser was that she wouldn’t be able to meet this Mr. Madoff. In fact, the adviser wasn’t sure whether or not he could get her into the man’s fund. Not to worry, however. Finally he succeeded by representing her as his niece. A family affair. The Madoff family of funds and fun.
After it was determined that she could “join” with her paltry IRA (not small but not millions) that she’d carefully salted away for the previous twenty-five years, she asked her friend if she could at least “speak” to Bernie Madoff. And so it was arranged. A phone conversation. She told The Man that this was her life savings, so she would like it in something very conservative.
“Don’t worry about a thing,” he assured her. And then the conversation ended. A minute maybe. Talk about famous last words.
Now, from hindsight at this vantage point, I would have to say my friend Alexandra made a really dumb decision thinking she could get a healthy income (10-12%) in something as conservative as Treasuries (now running at a less than zero rate adjusted for inflation). However, that was then and authors and artists and magazine editors don’t know from correlated to uncorrelated alpha. Just like most of the rest of us.
So for ten years Alexandra Penney had a nice “retirement” income, living in sorta Fat City with the time to devote herself to what she had always wanted to do: Art. She got herself a little loft downtown. She joined the armies of American consumers/homeowners and extended herself into a bit of a home equity situation for it, but Bernie, the genius, would be picking up the slack. Like he said: don’t worry about a thing. Plus there was the cottage in the Hamptons, the little not-so-tumble-down shack in Florida and the East River apartment. Her luxury: taxis. A fair one if you live in New York.
Right after, Tina Brown hired her to write a blog about it for the Daily Beast. After the first one was published, she was surprised to read the Comments to her blog. Many messages were angry and nasty. She stopped reading them.
So many people seem to believe that they wouldn’t have responded similarly, or that they wouldn’t have made the same investment decision. Naivete placed in the back pocket. They seem unaware that many – multitudes – of Madoff investors were people whose business opinions were good as gold to most of us. Nor do they seem to know anything about the trauma of loss of income and assets outside of themselves.
A month later Alexandra still doesn’t know what she can do. Selling a house is a partial alternative but the market isn’t on a seller’s side (no matter what they tell you).
The crisis also revived a historical fear within her: being a bag lady. I know quite a few women who have that fear. All of them are self-reliant, disciplined, successful, proactive and smart. And yet there’s that fear that they could lose it all any minute and be out on the street, alone. This is an irrational idea but a powerful one.
As I suspected, the “trauma” (her word) has not flattened Alexandra Penney. She has already turned it into a book proposal. We’ll be hearing more about it, I have no doubt.
In the meantime, the Madoff horror stories go on. I heard about a young man whose father died a year ago and left him $17 million. The father, believing that his son would never know or learn how to manage his portfolio well, put all the money with Bernie Madoff in advance of his death. He was doing his son a great favor. Uh-huh.
Then there’s the woman, another friend of Alexandra’s, who put a few million with Madoff only two weeks before the scandal broke. Fortunately for her, there’s more where that came from.
Meanwhile, last night in New York, Paige Rense held her annual dinner for the AD 100 (Architectural Digest’s Top 100 interior designers) at the Lotos Club.
The Lotos, where the dinner is always held in the second ballroom, is one of the oldest literary clubs in the United States. It was founded 139 years ago by a group of young writers and critics. Mark Twain called it “The Ace of Clubs.” Membership today, as it was a century ago is made up journalists, scholars, musicians, painters and sculptors, art collectors, historians, novelists and college presidents.
The French Renaissance style clubhouse at 5 East 66th Street was designed and built in 1900 as a wedding gift by Mrs. Elliot Shepard, daughter of Mr. and Mrs. William H. Vanderbilt, to her daughter Maria Louise and William Jay Schieffelin.
Not all 100 of the top AD designers were present but many were. We’ll have many more pictures of the creative ones on Monday.
Menu: Artichoke Pesto Ravioli; fresh shaved Parmesan cheese, creamy tomato vodka sauce; Pan-Seared Sea Bass with sweet carrot pure, sautéed baby bok choy, braised artichoke, oven roasted tomatoes, caper beurre blanc, Or: Filet Mignon with fricassee of baby spinach, wild mushrooms, pearl onion, crispy guafrette, vintage port wine sauce. Dessert: Warm Chocolate Fondant Cake, pistachio ice cream, chocolate sauce. |
