Blemished Apple

This big, brash, in-your-face city suddenly seems to have lost its mojo.

At the beginning of the year, there was supercharged hype over the possibility that two, even three New Yorkers may be squaring off against one another for president. But now former mayor Rudolph W. Giuliani (R), Sen. Hillary Rodham Clinton (D) and Mayor Michael R. Bloomberg (I) are sitting on the sidelines while the action is in Chicago and Arizona.

In September, the New York Mets collapsed again before reaching the National League playoffs, and the Yankees were left out of the postseason for the first time since 1995. Baseball is being played in October, but not in New York.

On top of all that gloom comes the spectacular implosion of Wall Street, where some of the city's most storied financial behemoths -- Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group -- have been forced to merge or seek federal handouts to stave off bankruptcy. There are projections of thousands of lost jobs in the financial services sector, and the continuing plunge in stock prices has forced dramatic and sudden changes in the lifestyles of some of New York's wealthiest.

Bookings for private jets are way down, and yacht rentals are drying up. Young Manhattanites are giving up the multimillion-dollar lofts they can no longer afford. The decade-long real estate boom appears to have stalled, with new projects on hold and existing skyscrapers difficult to refinance. New Yorkers are scaling back plans for big weddings and bar mitzvahs. Even a staple of life in the city, eating out, has taken a hit.

"Businesses are having tremendous difficulty getting money, and there's a loss of confidence in the marketplace," said Kathryn Wylde, president and chief executive of the Partnership for New York City, a nonprofit alliance of business leaders. "Merger and acquisition activity has stalled. . . . Portfolios have gone to hell. It's rippling all the way through our system."

In true New York fashion, more and more of those directly affected by the financial crisis are finding their way to psychoanalysts' couches.

"I had a whole bunch of referrals -- I had five new patients just come in," said Alden Cass, a psychologist who specializes in the mental health problems of stockbrokers and investment bankers. "These are individuals who have become successful at taking control of things, and now they are reduced to a kind of helplessness."

Cass, who wrote the book "Bullish Thinking: The Advisor's Guide to Surviving and Thriving on Wall Street," spoke last week at a conference of mental health professionals in Santa Monica, Calif., explaining how they should handle an expected influx of new clients. When he returned to New York, he had 10 consecutive hours of patient sessions on his schedule -- people from affected firms, chief executives, branch managers.

"They come from the grandiosity of making a lot of money," Cass said, "and now they most certainly won't be getting bonus checks this year. How do they explain that to their wives? How do they explain that to their children in college?"

The average working stiff might find it hard to sympathize with someone who once earned a couple of million in salary and bonuses suddenly being forced into a $180,000-a-year lifestyle. But according to Cass and others, the shock here in New York is all too real. There are private-school tuition, house staff salaries, and huge mortgages on multimillion-dollar apartments in Manhattan and second homes in the Hamptons.

Marie-Claire Martineau, a real estate agent with the high-end agency Maison International, said several of her clients took out big mortgages on Manhattan lofts and are now looking to move into smaller spaces. "A lot of people have to rent their apartment because they can't afford it anymore," she said.

One of her clients was paying $19,000 a month for a two-bedroom, two-bathroom apartment in the Chelsea neighborhood. "He lost all of his stock options on Wall Street and he can't afford the mortgage," Martineau said. "All these people are renting their lofts because they can't afford them. . . . They overextended themselves or they were counting on their bonuses and stock options."

They are not only moving out of their luxurious digs but also altering their once high-flying lifestyles.

Alex Todd, president and chief executive of Quintessential Jets, a charter jet company based in New York, said his company used to have about 20 to 30 bookings a month for private jets; so far this month it has had three or four.

"With what's happening in today's economy and the markets, people are obviously less inclined to spend the kind of money to fly privately," Todd said, explaining that a private jet flown one way to Miami costs about $15,000. "Most of our clients are CEOs and financial advisers and celebrities as well," he said. "But basically the corporations have been the best fliers. With all the corporate setbacks and everything, it's affected everything from the bottom to the top."

The formerly wealthy are also avoiding private yachts, often a choice venue for cocktail parties and receptions where merrymakers take in the skyline, the bridges and the Statue of Liberty while cruising along the Hudson River.

"It's definitely hit us hard as an industry," said Frank Giordano, president of the Yacht Owners Association of New York, a Manhattan-based consortium of charter yacht owners. "I've seen two companies go out of business in the past year, but everyone is down. The industry is down 30 percent as a whole."

During hard times, corporations are "just not going out as much," he said. "Personally, I just had a bank who we do business with a lot saying, 'With these economic times, it's just not prudent for us to go out. We'd like to hold our credit for next year.' "

The party circuit is feeling the pinch, too. Even those who still have wealth are anxious not to appear too showy during difficult times. Joe St. Cyr, director of Joseph Todd Events, which plans weddings and bar and bat mitzvahs, said people who have already planned big events are now looking for ways to trim costs -- cutting back on flowers, for example, or bargaining with hotels for lower prices.

"I have clients who have lost a significant percentage of their portfolios, 10, 20, 50 percent of their portfolios," he said. "They're mostly Wall Street-connected people. They're not so terrified and know the market will come back. They have money to spend." But, he said, "they want to either not spend so much on a party, or want to look like they're not spending a lot of money."

Wall Street itself, and the surrounding warren of narrow streets, have taken on kind of an amusement-park feel. Tourists snapping pictures outside the New York Stock Exchange are bumping up against television news crews from across the country and around the world that stick microphones in their faces and ask about the latest dip in the Dow.

"So how do you feel today?" a Russian television reporter asked in accented English, shoving his microphone unknowingly into the face of another reporter.

"It's been like this for two weeks," said a young investment banker who came out of his office in shirtsleeves on a breezy day for a cigarette, trying to avoid the crowd.

"I'm not happy about it because it affects my pension," said Hugo Zettler, who was visiting with his wife, Diane, from Tempe, Ariz., taking snapshots outside the stock exchange. "I'm just glad I don't have any money in the stock market."

"Well, I did," said Diane Zettler, "but who knows now?"