The Fall of the Gilded Age

September 19, 2008— -- It had been a long time coming, but in the last week, with the collapse of the investment bank Lehman Brothers and the distress sale of another, Merrill Lynch, thousands of jobs and some 700-billion dollars in wealth, in stock, simply disappeared.

"The gilded age is over," said Holly Peterson, wife of a multi-millionaire investment banker and daughter of multi-billionaire financier Pete Peterson.

"The whole era of conspicuous consumption and free spending and luxury ended as of this week," said Robert Frank, Wall Street Journal reporter and author of "Richistan," a book about America's super-rich.

As New York investment bankers, once called the masters of the universe, were sent packing, the super-elite tone set by multi-million dollar charity balls, birthday parties and bar mitzvahs too is threatened.

"It was almost like they had created a whole separate world," said Frank. "They were a parallel country of the rich."

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"A lot of those people will have to sell their homes, they're going to cut back on the private jets and the vacations. They may even have to take their kids out of private school," said Frank. "It's a total reworking of their lifestyle."

He added that it's going to be no easy task.

"It's going to be very hard psychologically for these people," Frank said. "I talked to one guy who had to give up his private jet recently. And he said of all the trials in his life, giving that up was the hardest thing he's ever done."

And the city's leading real estate broker, Kathy Sloane, says the worst is yet to come for New York real estate. Some say it's too soon to know but she estimates the value of a $5 million apartment has already dropped almost a million dollars in value, with no end in sight.

"Because a month from now, that same $5 million apartment may be lucky to achieve $3.5 million," Sloane said. Now, in New York, some see a kind of poetic justice. The investment bankers who drove up the prices of the city's fancy co-op apartments are no longer so welcome.