Excess spending in hard timesPublished 9:02am Tuesday, May 22, 2012
With bony legs and a barrel chest, he didn’t look that much like an athlete. He wasn’t even that much of a role model, but Babe Ruth was the hero to many a young baseball fan in my youth.
Beginning his career as a pitcher, he later became the most dominant hitter in baseball. He held the record for the most homeruns in a career (714) until Hank Aaron finally passed him in 1974. More than 75 years after his last game, the Sultan of Swat still holds three major league records, is still second in RBIs, and remains third in all time home runs.
It should not be a surprise then that memorabilia from the Great Bambino would command great interest from baseball collectors from around the world. However, we have to question in these hard times that seem to be everywhere, how it is possible that the Babe’s jersey sold this past week for a record $4.22 million?
Ruth had other pieces from his sports life sell for what seemed like huge amounts at the time. The bat he used to hit his first home run sold for more than $1.25 million in 2004. Even the contract selling him to the New York Yankees in 1936 brought nearly $1 million at auction.
Therein lies one of the great paradoxes of the past few years; in the toughest economic times in nearly two generations, people are still spending record amounts for memorabilia, autographs, and other collectibles.
This past Tuesday a new record was set for the highest price paid for a single pink diamond. Known as the “Clark Pink”, the nine-carat diamond sold for $15.7 million, more than twice its estimated value.
Oddly, this ring belonged to a 105-year-old recluse, Huguette Clark, who died last year. It is widely reported to have been kept in a bank vault since 1940. Clark’s two apartments on Central Park also recently sold for a combined $31 million. She also owned the penthouse in the same building, which is under contract for $24 million. Divorced since 1930, Ms. Clark had not visited the apartments in decades.
Of course, these aren’t hard times for almost 1,000 employees and investors now considered millionaires after this week’s initial public offering for the Internet sensation, Facebook. Mark Zuckerberg, the 28-year-old founder, joined the ranks of the mega-rich when Wall Street valued his remaining stock at over $19 billion.
California, facing enormous budget deficits, predicts that it will receive over $2.5 billion in additional revenue from taxes on the windfall to all these new wealthy people. It is too bad Facebook wasn’t based in Georgia. Maybe then we wouldn’t have to cut education funding yet again.
Even among the rank and file of the population, there seems to be an emphasis on spending more when there seems to be less to spend.
For instance, don’t you find it surprising that the average sales increased more during the past quarter at Saks, Macy’s and Bloomingdales, than at Walmart? It seems that the focus is now on the wealthy even at the retail level.
Shoes, long an area of interest almost exclusively to women, now are setting record prices for men. For instance, a pair of Air Jordans made from silver can be had for $60,000. Too bad they aren’t in my size.
Upscale watches are also finding a nice market these days. Louis Moinet’s new piece, appropriately called Meteoris, is a $4.6 million set of four watches, made using four meteorites from space. Yes, but does it keep good time?
Most of us like spending time at the beach. You can now purchase your own estate in Palm Beach, Fla., for only $59 million. It has a 12,000-square-foot garden house and a 6,000-square-foot ocean house. You wouldn’t even have to stay in the same house with your in-laws on a family beach trip. The sad thing is the estate will mostly likely sell before your neighbor’s house down the street.
Of course, if you had an expensive house you would need an expensive car to go in the garage. According to Forbes magazine, the most expensive car in the world this year is the Bugatti Veyron Supersport, priced at $2.6 million. This supercar is also the fastest, with an astonishing top speed of 267 mph, powered by a 1,184-horsepower engine. If you have enough money to buy this car you don’t really have to worry about the miles per gallon it gets at that speed.
And everyone living the life of luxury would need a good dog at their house. The highest price paid for a dog in the past year is $1.5 million for a prized red Tibetan mastiff. They are supposedly one of the oldest breeds in the world, but can they fetch a stick? Can you rub them behind their ears?
I wonder how much my third great dog, Harry, would bring at auction. A hyper Jack Russell Terrier, the winning bidder would probably pay even more for me to take him back after a few days.
Come to think of it, when you start looking around at all the money being wasted on things, when there is so much need, it makes the price of Babe Ruth’s jersey seem pretty reasonable after all.
Dan Ponder can be reached at firstname.lastname@example.org