Hollywood's long road to perdition

This for a change: the whole of last week I was living in close proximity to the super-rich and ultra-famous in Hollywood.

Thanks to the launch of Emirates flight to Los Angeles from Dubai, I got a brief break from my economist-barber and investment banker-cat.

True to its style Emirates put me up at the luxury Beverly Wilshire Hotel (remember the hotel in Pretty Woman?) in the posh Hollywood neighbourhood. Fed by celebrity chef Wolfgang Puck and entertained by Ricky Martin, I too have begun to lose touch with the real world.

Looking through my hotel window across to Rodeo Drive boutiques, the swanky cars on the streets and the stars basking in their riches, I could be excused a small indiscretion.

Yesterday I took a tour of Beverly Hills. Out of cur-iosity I enquired of my tour guide if there has been a slump in prices as a fallout of the financial turmoil. He insisted that the prices in the locality are perennially on the rise. Not so convinced, I cross-checked with two celebrity house-hunters, who backed up the guide's testimony.

Ever the determined economist, I discretely checked with my hotel and a few other luxury hotels in the neighbourhood if there had been any change in the spending habits of their clients. The answer was an emphatic 'no', and so too from the many exclusive fashion and jewellery outlets.

Either Hollywood's rich have yet to feel the pinch of the economic slump or my sources are still in a state of denial. A decrease in spending on prime real estate and other luxury goods has been widely the case across the world this year, proving that even the ultra-wealthy are feeling poorer.

It is indeed hard to believe that the stars are in fact bullet-proof against financial downturn. Do they really enjoy that level of immunity? And are their money power and financial idiosyncrasies alone capable of holding up the value of assets they own?

There are clear indications that some of the asset classes of even the super-rich are getting sucked into the economic slump. Private jets are a clear example. That market is vanishing fast as investors have exited options in the forward private jet market because they are worried their value will fall with shrinking demand.

Analysts believe that the super-wealthy alone will not be enough to bolster the US luxury property market, and falls are likely to accelerate in the prices of multi-million dollar houses, even if Hollywood manages to keep a tight grip on its property.

Other major asset classes of the super-rich are already showing signs of the slump. The art world's safe-haven status is faltering.

Last week a rare painting of the artist Francis Bacon by Lucian Freud sold for £1.6 million less than expected, and a number of contemporary art auctions have reported disappointing results.

Although modesty and thrift are not listed as virtues in the showbusiness lexicon, the signs are clear that some belt-tightening is still known to the tinseltown stars.

Me, I'm just making the most of my moment of luxury. 'Because I'm worth it!'? Or just because my research requires me to know how the other half lives.