My Heart is Actually Bleeding Borscht Here

It turns out that the it appears that recent difficulties experienced by hedge funds has caused a decline in house prices in the Hamptons.

After about 40 years, people are starting that hedge funds both under-perform the market and charge outrageous fees, and so the most overpaid professionals on Wall Street can't pay as much their 35,000 square foot Summer cottages any more:

This had to happen. Now we’re getting reports that in the Hamptons, on Long Island’s east end, where Wall Street’s richest hobnob over the summer, home prices at the very top, after a phenomenal boom, are getting crushed.

What’s getting blamed? The crummy performance of the markets last year.

The average price in 2015 of the ten most expensive homes sold in the area has crashed 20% from a year earlier – to a measly $35.5 million.

After soaring a mind-bending 180% in five years, from $15.9 million in 2009, the average price of the top ten homes had reached $44.6 million in 2014, according to a report by Town & Country Real Estate in East Hampton, cited by Reuters.

The year 2009 was when the Fed’s “wealth effect” strategy was kicking in. It was precisely what Bernanke wanted to accomplish. He spelled it out in an editorial. The Fed’s “strong and creative measures” would inflate asset prices, which would lead those benefiting the most from it, including those on Wall Street that extract fees and get paid big bonuses, to feel wealthier and spend a little more, which would crank up the economy. And this is what happened in the Hamptons.

 I am so not crushed by this news.