Moscow on the Hudson
In this summer of high-end real-estate purgatory, New York real-estate circles are abuzz over some good news. In early July, a town house on a gilded block of East 64th Street changed hands for $42.5 million. The buyer hasn't been publicly identified. But speculation is centering on Leonard Blavatnik, a Russian oil magnate who last fall paid $50 million to buy the neighboring house from Seagram's heir Edgar Bronfman Jr.
A quarter century after the debut of "Red Dawn," in which Patrick Swayze and Charlie Sheen fought back against a Soviet invasion of a bucolic Colorado town, Russians are again occupying promontories in the Rockies. This time they come bearing hard currency rather than Kalashnikovs. Roman Abramovich, the Russian billionaire whose holdings include London's Chelsea soccer team, in May paid $36 million for a 200-acre ranch in Aspen. Recently, Dmitry Rybolovlev, a 41-year-old fertilizer multibillionaire (net worth: about $13 billion), agreed to pay Donald Trump $95 million for his 62,000(!)-square-foot beachfront mansion in Palm Beach, Fla. According to the hyperbole- prone Trump, it was the most expensive purchase of a single home in the nation's history.
And you didn't see many Americans at Trump's open house. The credit crunch has removed an important source of support for the penthouse floor of the housing market. When they made their millions, subprime barons and hedge-fund parvenus cemented their status by purchasing (frequently gauche) trophy properties. Just in time, a new class of nouveau riche buyers with dubious taste and a penchant for conspicuous consumption has arrived on the scene: Russian oligarchs.
Booming commodity markets have turned entrepreneurs from the steppes of Central Asia into gazillionaires. Several factors—the weak dollar, concern about stability at home and the age-old international playboy's desire to establish footholds in global capitals of fabulousness—are bringing them here. No truth to the rumor that HGTV is developing a new show about the makeovers: "Flip This Dacha."
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Daniel Gross is one of the most widely read financial and economic writers working today. He is a senior editor at Newsweek, where he writes the "Contrary Indicator" column. He writes the twice-weekly "Moneybox" column for Slate, which also appears on Newsweek.com.
Before joining Newsweek in the spring of 2007, Mr. Gross wrote the "Economic View" column in the New York Times, was a contributing writer to New York, and contributed regularly to magazines such as Fortune and Wired. From 1998-2007, Gross served as the editor of STERNBusiness, a semi-annual academic magazine on economics and management published by the New York University Stern School of Business.
A native of East Lansing, Michigan, Mr. Gross graduated from Cornell University in 1989, with degrees in government and history, and holds an A.M. in American history from Harvard University (1991). He worked as a reporter at The New Republic and Bloomberg News, and has contributed hundreds of features, news articles, book reviews and opinion pieces to over 60 magazines and newspapers. Areas of expertise include: economic and tax policy, the links between business and politics, the rise of the investor class, the culture of Wall Street, and business history.
He is the author of four books: "Forbes Greatest Business Stories of All Time" (Wiley, 1996), which was a New York Times Business bestseller and a finalist for the Financial Times "Lex" award, given to the best business history book of 1996. Translations have been published in Spanish, German, Czech, Polish, Portuguese, Bulgarian, Chinese, Turkish, and Japanese; "Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance" (PublicAffairs, 2000); "The Generations of Corning: The Life and Times of an American Company," co-authored with Davis Dyer, (Oxford University Press, 20010; and "Pop! Why Bubbles Are Great for the Economy," (HarperCollins, May 2007).
Mr. Gross appears frequently in the media. A regular guest on CNBC, MSNBC, and National Public Radio, he has also appeared on CNN, Fox News Channel, The Newshour with Jim Lehrer, Bloomberg Television, C-SPAN, BBC, and Reuters TV, and on more than 50 radio programs and talk shows.
Mr. Gross lives in Westport, Conn., with his wife and two children.
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