Wall Street Rattles Rye
 
– By Peter Jovanovich –

“Bonuses are being cut back.”
“Today, three people I know lost their jobs.”
“Crazy stuff is happening.”
These are just some of the comments heard around Rye now that Wall Street is in a full-blown crisis. If Rye appeared to have escaped the slowdown in the rest of the country, a recession is now on our doorstep.
“For years,” said Cai Palmer, a consultant for hedge funds and owner of Wine at Five, “towns like Rye and Greenwich were innoculated from the turmoil in the general economy. That’s no longer the case.”
What does this crisis mean for Rye residents who work in the financial industry?
Duncan Hennes, the Managing Partner of Atrevida Partners and a former City Council member, told us: “Many people in town worked for Lehman Brothers or Bear Stearns and are now out of a job. For those still working, bonuses are being sharply slashed or eliminated.”
“Further,” said Hennes, “this crisis is also affecting hedge funds, many of which are located in and around Rye. The statistics for all hedge funds show they are delivering their worst returns in a decade.”
One twenty-year Wall Street veteran estimated that most of the pain will be felt by the mid-level and middle-aged employees on the Street. “In a Wall Street downturn as severe as this, the 40- and 50-year-olds who get laid off find it very difficult to get back in the game. The top people have made so much money that they’re fine; but the mid-level guys will have to drop two or three levels down the food chain.”
Young people from Rye are also being affected by the financial crisis. We spoke to several 20-something bankers, all of whom requested anonymity because their firms have policies that disallow them from talking on the record to the media. One said the predominant mood on the floor was fear: “No one knows what’s really on the balance sheet of their own bank, let alone the competition.” Another noted: “Our company’s training program has been suspended and summer intern programs are on hold.”
It’s too soon to estimate what effect the crisis will have on Rye real estate. Prices of Rye homes have dropped somewhat from the peak in 2005, but the falloff has been modest compared to the steep declines elsewhere in the country. Said one prominent broker in town, “It’s been slow all year. People take a lot longer to make a decision to buy; couples are more concerned about taking on too big a mortgage.” A real estate lawyer assessed the market this way: “In late summer/early fall, the housing market is usually quiet. This year, it’s deadly quiet.”
Nevertheless, in every downturn there is an opportunity. Cai Palmer, the hedge fund consultant cum wine shop proprietor, sensed early this year that the market was in trouble. He decided to stock up on lower-priced wines. “In January, we tasted wines in the $15 - 20 range from over 300 vineyards around the world. We selected those we thought were best, the 45 labels we call our ‘recession wines’. They’re selling great.”