Friday, November 21, 2014

How GST Will Change the Face of Indian Economy

Indian truck drivers clock an average of 280 km per day, much below the world average of 400 km per day and far below the 700 km the average truck driver in the US does every day. The underperformance of Indian truckers has less to do with bad roads and less fancy trucks and more about prevailing archaic laws.

Truck drivers in India spend 60 per cent of their time off roads negotiating check posts and toll plazas, says UBS Securities, which has also found that there are 650-odd check posts in the country and 11 categories of taxes on the road transport sector.

Since road traffic accounts for 60 per cent of freight traffic in India, the slow movement of trucks across states leads to productivity loss. According to UBS, if the distance covered goes up by 20 per cent per day, Indian truck productivity would improve by 12 per cent.

Higher productivity would cut the need for buffer stocks; reduce the loss of perishable goods, cut down the need for many warehouses, etc.

Analysts say the implementation of the goods and services tax(GST) could provide the kind of productivity boost illustrated above. Gautam Chhaochharia, head of India Research of UBS Securities, explains the benefits of GST,

1) Unified market: The GST will cut down the large number of taxes imposed by the central government (eg. central VAT or excise duty, services tax, central sales tax on inter-state sales, etc.) and states (VAT on sales, entertainment tax, luxury tax and octroi and entry taxes levied by municipalities). This will lead to the creation of a unified market, which would facilitate seamless movement of goods across states and reduce the transaction cost of businesses.

2) Lower incentive to evade tax: Currently, companies have to pay taxes on entire underlying value of the product/service, but under GST, companies in a chain will have to pay tax only on the value-addition. So, the actual tax paid will likely be small and reduce the incentive for evasion.

3) Widen tax base: GST will give credits for all taxes paid earlier in the goods/services chain incentivising tax-paying firms to source inputs from other registered dealers. This will bring in additional revenues to the government as the unorganised sector, which is not part of the value chain, would be drawn into the tax net. Besides, states will be allowed to tax services (as opposed to only the central government) under the GST.

According to the National Council of Applied Economic Research, government's tax revenue will increase by about 0.2 per cent because of GST implementation, while GDP growth could go up by 0.9-1.7 per cent. Exports will also get a boost as they are zero-rated for taxes and also because the fall in cost of manufactured goods and services under GST will increase the competitiveness of Indian goods and services in the international market, UBS says.

Finance Minister Arun Jaitley on Friday said that ensuring the passage of the constitutional amendment Bill in Parliamentary will be a priority for the government. The government will also need the consent of 50 per cent of states to implement GST by April 2016.

However, a consensus is still missing on the final GST tax rates and recommendations vary from 16 per cent to 27 per cent.

Mangalyaan Among Best Inventions of 2014: TIME Magazine

Mangalyaan has been named among the best inventions of 2014 by Time magazine which described it as a technological feat that will allow India to flex its "interplanetary muscles."

"Nobody gets Mars right on the first try. The US didn't, Russia didn't, the Europeans didn't. But on September 24, India did. That's when the Mangalyaan... went into orbit around the Red Planet, a technological feat no other Asian nation has yet achieved," Time said about Mangalyaan, calling it "The Supersmart Spacecraft."

Mangalyaan is among the 25 'Best Inventions of 2014' listed by Time magazine that are "making the world better, smarter and-in some cases-a little more fun."

Developed by the Indian Space Research Organisation, the Mars spacecraft cost India just US $74 million, less than the budget for the multi-Academy Award winning science fiction thriller film Gravity. Time said at that price, the Mangalyaan is equipped with just five onboard instruments that allow it to do simple tasks like measure Martian methane and surface composition.

"More important, however, it allows India to flex its interplanetary muscles, which portends great things for the country's space programme and for science in general," Time said.

The list also includes inventions by two Indians for developing an exercise space for prisoners in solitary confinement and a tablet toy for kids.

Nalini Nadkarni, forest ecologist and college professor helped develop the 'Blue Room' with Snake River Correctional Institution in Oregon for inmates in solitary confinement, who for 23 hours a day see nothing but a tiny, white-walled cell, an experience some research suggests heightens mental illness and makes prisoners prone to suicide attempts and violence.

Last year, officials began letting some of them spend their free hour in a first-of-its-kind Blue Room, an exercise

space where a projector plays video of open deserts, streaming waterfalls and other outdoor scenes. Nadkarni says the imagery is designed to calm prisoners, "much in the way we walk through a park" to relax.

Former Google engineer Pramod Sharma developed 'Osmo', a tablet toy that gets physical. Sharma got the inspiration when he saw his daughter playing with the iPad, but did not want her to be glued to the tablet all day long.

The toy, which debuted in October, has helped Osmo raise US $14.5 million in capital and is now being sold in the Apple Store.

The other inventions are a reactor developed by aerospace company Lockheed Martin that could realize nuclear fusion,

Apple's smart watch that besides telling time, can send messages, give directions, track fitness and make wireless payments and Microsoft's Surface Pro 3, a "hybrid" that bundles laptop into a 12-inch tablet and can run desktop apps.

Friday, November 14, 2014

World's 'most complicated' Patek Philippe gold watch sells for record $24.4 million

The most "complicated" handmade watch in the world has been sold at auction for an historic $24.4 million.

The Henry Graves Supercomplication timepiece, made by the luxury watchmaker Patek Philippe in 1933 for the prominent banker Henry Graves, was sold at Sotheby's in Switzerland.

The sale smashed the world record for the most expensive watch ever sold at auction, which was previously held by the same watch. In 1999, it was sold to Sheikh Saud Bin Mohammed Bin Ali Al-Thani of the Qatari royal family, for $11 million.

The watch was released in 2014 to coincide with the 175th anniversary of the Swiss watch maker. The sale has benefited from the boom in Patek Phillippe auction values over the last 15 years.

The term "complication" is a technical one, and refers to any aspect of a watch that offers a function that is not simply telling the time.

The timepiece -- which has been called "the most important watch in the world," "one of the wonders of the world," and "the collector's holy grail" -- boasts 24 such complications.

These include grande and petite sonnerie (chimes), which emulate the bells of Westminster; a record of the phases and age of the moon; sunrise and sunset indications; a "perpetual calendar" that makes automatic adjustments for month and year; and a celestial map of the New York sky.

The watch was made by Patek Philippe for Henry Graves, a prominent banker, in 1933.

The celestial map alone is a remarkable feat of engineering. It charts the precise spacing and density of the stars, and rotates at the same pace as the sky as it would have appeared from its owner's Fifth Avenue apartment.

The watch is comprised of 900 individual parts, and, according to Sotheby's, is the most advanced timepiece ever made without the assistance of computers. It was last wound in 1969, yet remains in perfect working order.

The Supercomplication was made as the result of a friendly competition between Graves, a member of a well-known banking family, and James Ward Packard, the luxury automobile manufacturer, to see who could produce the most impressive timepiece.

Packard's attempt was a pioneering feat. It was the first ever watch to feature a sky chart, which included 500 golden stars and was centered above his home in Ohio.

You are talking about one of the most collectible pieces ever put up for auction, if not the most collectible.

Larry Pattinelli, Patek Phillippe

However, it contained just 10 complications, making Graves' timepiece the undisputed winner with 24.

One of the Supercomplication's more obscure features is a sidereal time dial, which tracks the Earth's rate of rotation in relation to fixed stars. A "sidereal day", which is used by astronomers, lasts for 23 hours, 56 minutes and 4.1 seconds. It is unclear whether Graves had any use for the functionality.

"It's amazing that they did all that without computers," says Larry Pattinelli, the president of Patek Phillippe. "You are talking about one of the most collectible pieces ever put up for auction, if not the most collectible."

The Supercomplication took Patek Phillipe eight years to produce, from its commission in 1925 to delivery in 1933. The identity of the new buyer is unknown.

Tuesday, November 11, 2014

Alibaba Singles' Day Sales Surge Past $8 Billion

E-commerce giant Alibaba's Singles' Day sales broke through the $8 billion mark late on Tuesday, illustrating the buying power of the Chinese consumer and the importance of the event in the retail calendar.

The live sales figure on Alibaba Group Holding Ltd's giant screen at its sprawling Hangzhou campus surged past 2013's record high to the CNY 50 billion ($8.16 billion, roughly Rs. 50,200 crores) mark with almost three hours left on the clock as Chinese and overseas shoppers bought heavily discounted online goods.

The recent U.S. listing, just eight weeks ago, seemed though to quieten company leaders.

Jack Ma, the normally chatty executive chairman, shied away from the main media events, limiting himself to an interview with state broadcaster China Central Television (CCTV).

The shopping day, similar to Cyber Monday and Black Friday in the U.S., comes less than eight weeks after its public share listing in New York, which set its own $25 billion record (roughly Rs. 1,54,000 crores).

Alibaba turned the Singles' Day celebration, a Nov. 11 Chinese response to romantic holidays like Valentine's Day, into an online shopping festival in 2009. It copyrighted the "Double 11" term three years later after recognising its commercial potential.

"You're seeing the unleashing of the consumption power of the Chinese consumer," Joe Tsai, Alibaba Group's executive vice chairman, told reporters.

"We really are witnessing history here because we are seeing the shift of the economy from focused on the state sector to consumption."

Alibaba did 35 billion yuan in business during last year's festival, and Tech research firm IDC predicts this year's total gross merchandise volume (GMV) will reach $8.62 billion (roughly Rs. 53,000 crores).

Boosting the numbers
Less than 18 minutes into this year's "11.11 Shopping Festival", GMV had already hit $1 billion.

The numbers are boosted by Alibaba's "pre-sales initiative". Merchants advertised Singles' Day prices as early as Oct. 15, taking deposits for the items but only processing full payments and shipping the goods on Singles' Day itself.

Though the 27,000 vendors that take part can boost their sales and gain customers by being featured on Alibaba's Singles' Day shopping sites, some have complained that discounts and cut-throat corporate rivalry undercut the benefits.

Analysts also said Alibaba's GMV will be driven by order cancellations during Singles' Day being delayed until Wednesday on, its online retail site.

"Tmall will not let you cancel Singles' Day orders until the following day, because they want to be able to talk about the GMV number and the enormous target," said Mark Natkin, managing director of Beijing-based Marbridge Consulting.

Pole position
While rivals such as Inc, Suning Commerce Group Co Ltd and Wal-Mart Stores Inc's Yihaodian have all gotten in on the Singles' Day act, Tsai was bullish about Alibaba's pole position.

"I don't think any other company in China can create a day like this," he said.

Chinese online retailer said on its official Twitter account that orders in the first 16 hours of Singles' Day had more than doubled compared with last year.

China's Xiaomi Technology Co Ltd, the world's third-largest smartphone maker, which also uses the Singles' Day festival to boost turnover, said on its official Weibo account its sales had so far surpassed CNY 1.4 billion (roughly Rs. 1,400 crores), and as of Tuesday evening it had sold more than 1 million handsets.

The "11.11 Shopping Festival", which Alibaba says is the world's biggest 24-hour online sale, began with just 27 merchants in 2009 offering deep discounts on the company's Tmall site to boost sales during an otherwise slack period.

This year's festival is global, reaching shoppers in more than 200 countries, the company said.

Oklahoma Oilman's Billion-Dollar Divorce is One of Largest Ever

During his nearly 50 years as an Oklahoma oilman, Harold Hamm has done everything on a huge scale. The chief executive and majority shareholder of Continental Resources, he owns the largest piece of the greatest oil discovery of our age, in the shale-rich plains of North Dakota. His net worth has been pegged at more than $18 billion by Forbes, making him the 24th richest man in the country.

Now another superlative can be added to Hamm's outsize career: He is paying one of the biggest divorce settlements in history.

After a secretive, nine-week trial, a judge in Oklahoma City has ruled that Hamm, 68, must pay nearly $1 billion to his ex-wife, Sue Ann Hamm. With the bang of a gavel, she has joined the ranks of the wealthiest women in the United States.

Or rather, she will join those ranks over time. The judgment requires Harold Hamm to pay his ex-wife about $320 million, or one-third of the total settlement, by the end of 2014. The rest is to be paid in chunks of at least $7 million a month. For a little perspective, that figure is slightly larger than last year's salary of the chief executive of U.S. Steel.

The settlement looks economy-class compared with the $4.8 billion that the Russian oligarch and "fertilizer king" Dmitry Rybolovlev paid his ex-wife, Elena, this year. But the payment is large enough that the presiding judge in the case, Howard Haralson, placed a lien on 20 million shares - or more than $ 1 billion - of Harold Hamm's Continental stock.

Hamm, who has described himself as "more hardheaded than other people," did not have a particular document that is all but standard now whenever tycoons wed: a prenuptial agreement. Barring future fiascos, this will surely stand as the costliest decision of Hamm's life. He has already paid his ex-wife roughly $25 million since the case was filed in 2012, the ruling stated.

Messages left with Continental Resources and with a lawyer for Sue Ann Hamm were not returned.

Harold Hamm was just another middle-age multimillionaire when he married Sue Ann Hamm, his second wife and a woman a decade his junior, in 1988. At the time, she was a lawyer at Continental and Harold Hamm was just beginning to snap up roughly 1 million acres of land leases in North Dakota, Montana and parts of Canada in what is the Bakken formation.

The Bakken turned out to be a rich underground trove. The question at the center of the divorce trial was what exactly led Hamm to it and his epochal fortune - expertise or dumb luck?

Under Oklahoma law, the answer matters. The money a spouse earns while married can be part of a divorce settlement if it is made through skill. If, on the other hand, the increase is attributable to "changing economic conditions, or circumstances beyond the parties' control," as the state's Supreme Court put it in a 1995 case, then that money is off the table.

The law put Hamm and his lawyers in an odd spot. They had to argue that one of the country's singular entrepreneurs, an up-from-nothing wildcatter, had essentially stumbled into his billions. This seemed like a tough sell. Hamm was once quoted as saying that "My biggest advantage is that I was born with no advantage."

As Hamm sought to poor-mouth his prowess, his company followed suit. Continental's proxy filings with the Securities and Exchange Commission for years have praised Hamm for "his leadership and business judgment." Not anymore. As Reuters wrote in September, that phrase was excised in the company's most recent proxy, along with a reference to Hamm as "one of the driving forces" behind Continental.

Haralson did not seem to buy this just-lucky account of Hamm's accomplishments. In arriving at the settlement terms, the judge cited Hamm's "skills and efforts" and said his leadership spurred an "increase in value for Continental." He also called Hamm "an expert in the oil field service business" and even after this ruling, Hamm remains one of the richest. As a fraction of his net worth, the settlement leaves him with many billions to spare.

Aside from the final judgment, little of the proceedings have been public. All but three days of the trial were held in a room at the Oklahoma City county courthouse with a handmade "Do Not Enter" sign attached to the door. Most of the voluminous filings in the case were placed under seal by the judge, who ruled in early August that "confidential financial information" about Continental could be revealed in the proceedings that might harm the company.

But enough about the case has come to light to make clear that it did not stint on drama. In a 2013 filing, Sue Ann Hamm accused her husband of infidelity, and seven years ago - after she had moved out of their home and to another city - she began documenting his extramarital behavior on audio and video tapes. Lawyers for Harold Hamm would later demand those tapes as a way to prove that the two hadn't lived as husband and wife for a long time.

Filings by Harold Hamm's lawyers stated that the union had been loveless for more than a decade, a "marriage in name only." Sue Ann Hamm's lawyers retorted in a filing of their own that "nothing under Oklahoma law suggests that a loveless marriage does not qualify as a marriage for the purposes of property division issues."

The settlement is a rare setback for a man accustomed to success on his own terms. Hamm is the 13th and youngest child of sharecroppers, and he moved with his parents from job to job as a child. "We went wherever the cotton was good," he told National Review last year.

His interest in the oil business started when he was a teenager, living in Enid, Oklahoma, with a job at truck stop called the Potter Oil Co. In 1967, he parlayed the proceeds from his truck hauling business into a tiny oil drilling company and struck a 75-barrel-an-hour gusher on his second try.

When he turned his attention to the Bakken formation, in the mid-'80s, other companies had already tapped into it and moved on. Hamm thought that was a mistake, and fracking and horizontal drilling would prove him right.

His hunches and persistence led not just to a vast windfall, but notoriety. He was named one of Time magazine's 100 most influential people in the world in 2012. He and Sue Ann Hamm were photographed at a gala celebrating the occasion at Jazz at Lincoln Center. Mitt Romney, during his run for president, named him his chief energy adviser.

Harold Hamm has two adult daughters with Sue Ann Hamm, Jane and Hillary. His first marriage, to Judith Ann Hamm, ended when she accused him of having an affair with Sue Ann.

Much of the judge's ruling is given over to a lengthy inventory of the Hamm's considerable holdings, which include a $17.4 million ranch in Carmel Valley, California, a $4.6 million home in Nichols Hills, Oklahoma, as well as homes in Enid and Branson, Missouri. There is also a hangar at an airport and shares of an assortment of companies, many of them worth multiple millions. Then there is Orbit Gas Storage, which was given a "value of zero" in the ruling.

Hamm was granted that apparently worthless entity by the judge, who painstakingly divvied up everything else. He awarded livestock, farm equipment and home furnishings from the California ranch to Sue Ann Hamm but gave Harold Hamm two horses, Star and Uno. The judge even addressed a last-minute request from Harold Hamm for "certain family pictures, a few books, guns, shotguns, some pictures, geode in quartz display, and his hand tools" in the Nichols Hill residence. Harold Hamm was awarded all of it, with one exception.

"Respondent's request for the geode in quartz display," the judge wrote, without explanation, "is denied."

Friday, November 7, 2014

Rolls-Royce Ghost Series II Launched; Priced at Rs. 4.5 Crore

Rolls-Royce has launched the Ghost Series II starting at Rs. 4.5 crore (ex-showroom pan India). The car was first seen at the Geneva Motorshow and now has made its way into India. For Rolls-Royce, India is an extremely important market, not as important or big as China though, but still. The company already has 5 dealerships across India and has plans to expand it further in the years to come.

The Ghost Series II gets subtle changes to the exterior and interior and a few additions to the options list. The attention is drawn straight away by the rectangular LED headlamps which replace the round main headlamps. There are also 21-inch alloys along with new paint shades and a new rear bumper.

The Series II also gets new seats with reworked electronic adjustments and heating options. The rear seats have been subtly re-angled to augment communication with fellow passengers. The instrument cluster gets marginal changes but there is a new infotainment system with 10-inch multimedia screen with a touchpad controller that makes its way inside the car.

There will be occasions when you might want to get behind the wheel of this one and it won't disappoint. At the heart is the same 6.6-litre V12 engine which churns out 563bhp and 780Nm. Mated to an eight-speed automatic transmission, the Ghost Series II will hit a top speed limited to 250km/h and accelerate from 0-100 km/h in 4.7 seconds.

You might think that 4.5 crores is a lot of money but Sven Ritter, GM Rolls-Royce Asia Pacific says, "We are bringing the car to India because there definitely is a demand and we want to fulfill it. People in India love our cars."

Bill Gates Needs 218 Years to Spend His Wealth by spending $1 Million a day

A recent report by international NGO Oxfam says it would take Microsoft cofounder Bill Gates nearly 218 years to spend his entire money, if he spends $1 million (Rs. 6 crore) per day.

Drawing the spotlight at the rising inequality of wealth, Oxfam estimates that the richest 85 people on the planet owned as much wealth as the poorest half of humanity. "Between March 2013 and March 2014, these 85 people grew $668 Million (Rs. 4000 crore) richer each day," the report said.

The report however praised Bill Gates for his philanthropic efforts, saying, "The decision of Bill Gates and Warren Buffet to give away their fortunes is an example to the rest of the world's billionaires."

The report ranks Bill Gates as the second richest in the world, pegging his wealth at $80 billion (Rs. 4.8 lakh crore). "In reality though, he would never run out of money: even a modest return of just under two per cent would make him $4.2 million (25 crore) each day in interest alone," adds the report.

The Microsoft cofounder is ranked next to the Mexican billionaire Carlos Slim, for whom it would take 220 years to spend his entire wealth, says the report.

Titled 'Even it Up: Time to End Extreme Inequality' the report analyses economic inequality across the world.

Also drawing attention to the economic inequality in India, the report says, "Despite being a country ravaged by poverty, the number of billionaires in India has soared from two in the mid-1990s to 65."

"The net worth of India's billionaires would be enough to eliminate absolute poverty in the country twice over," it adds.

20 Crore Brides Will Need 20 Crore Saris: PM Modi to Varanasi's Weavers

Prime Minister Narendra Modi offered a canny business plan for weavers in his Lok Sabha constituency Varanasi today - making the famous Banarasi sari available for the weddings of the "20 crore girls who will get married in the next few years."

He also asked the weavers to use opportunities offered by e-commerce to tap a global market and to modify the industry to do that effectively.

"Every mother wants a Banarasi sari for her daughter on their wedding day... 20 crore girls will get married in the next few years. So 20 crore saris will be needed. Such a big market waiting for you," the PM told weavers, adding, that an assured market meant they must increase production and ensure quality, good design and service.

"Everyone in the world knows about Varanasi's textiles. You must strategically plan to reach the global consumer," Mr Modi said, adding that the textile sector provides vast employment to the poorest and needs comprehensive vision and modern technology. He promised he would ensure that there is no dearth of funds for various projects.

Most of the Varanasi's 40,000 weavers are Muslims who have engaged in the traditional craft, now floundering, for generations. In his election campaign the Prime Minister had promised to improve their lot with modern technology, branding, designing and marketing.

Today, as he laid the foundation for a Rs.200 crore Trade Facilitation Centre, he said this was the beginning of his dream for Varanasi. "I believe in doing things rather than making tall claims. You have expressed faith in me and showered me with love," the PM said.

This is Mr Modi's first trip to Varanasi since he took over as Prime Minister.

Tuesday, November 4, 2014

The $95-Million View in New York

It's a $95-million view from the tallest residential tower in the Americas. But the newest addition to Manhattan's iconic skyline has attracted a cloud of controversy.

Still under construction and with US flags pinned patriotically to its shell, 432 Park Avenue soars above Midtown, casting a shadow over Central Park and designer boutiques on Madison Avenue.

At 1,396 feet (425.5 meters) the tower by Uruguayan "starchitect" Rafael Vinoly is higher than the 1,250-foot Empire State Building -- but eclipsed by One World Trade Center, which rises to 1,776 feet including a 408-foot antenna.

The Los Angeles-based developers CIM Group have already sold the top penthouse for $95 million and 50 percent of the apartments, which start at $17 million, before opening in Spring 2015.

The view -- marketed as a helicopter view -- offers vistas that stretch from Central Park to the Atlantic Ocean and Connecticut.

And it's not alone.

A string of super-tall, super-luxury buildings have sprung up and are still in development changing the city skyscape forever.

"They appeal to a very specific buyer pool and that buyer pool has proven to be very aggressive and very deep," said Robert Knakal, one of New York's top real estate brokers and chairman of Massey Knakal Realty Services.

But not everyone's happy.

A recent op-ed in the New York Observer complained about "hellish experience," "dynamite blasts" and "incessant screeching" endured by residents and office workers from mega projects in development.

'Ghost ships'

Opponents complain that city regulations provide no public review process in Midtown, that historic buildings are being demolished in their wake and that billionaires squeeze everyone else out.

"I think it's very controversial," said Alex Herrera, director of technical services at The New York Landmarks Conservancy. "We have never seen anything like this before."

The 1920s Drake Hotel, where Frank Sinatra, Muhammed Ali, Judy Garland and Jimi Hendrix stayed, was torn down to make way for 432 Park Avenue.

Herrera calls mega towers "ghost ships" -- bought as investments by international billionaires, who visit only a couple of weeks a year and so tall that they cast shadows across Central Park.

In a few years, 432 Park Avenue will be eclipsed as work progresses on a taller tower being built by developers Extell round the corner on West 57th Street.

Extell has already built a 90-storey condo designed by famed French architect Christian de Portzamparc on the same street.

Master piano makers Steinway and Sons are leaving West 57th Street next year after selling their 1925 flagship showroom, where Rachmaninoff practiced, to JDS Development Group for $46 million.

"It's definitely changing our skyline and it's certainly changing the character of 57th Street, which used to be a very quaint street of art galleries and piano stores," said Herrera.

"Now, it's a street of billionaires who don't really live there."

City voters last year elected Democrat mayor Bill de Blasio on a ticket of greater equality after income gaps widened during the 12-year tenure of billionaire-philanthropist Michael Bloomberg.

Fuels local economy

De Blasio has an ambitious affordable housing plan in the wake of middle class professionals leaving Manhattan and while an estimated 21 percent of New York city residents live in poverty.

Neither is New York a capital city and while historic buildings are preserved, it's a business city driven by profits.

Herrera wants 57th Street landmarked to protect the other historic buildings. "What we're looking for is a balance," he said.

But Knakal insists there is a balance and credits the city planning commission with doing an "excellent job" on zoning.

And even if billionaire residents, don't stay all year, they still pay real estate taxes and don't consume public services, he says.

"Folks who are residing in those apartments probably spend more money and inject more dollars into the local economy than the average New Yorker does in the whole year."

But members of the public are at best divided over the expansion. Many say the super rich have earned their right to live and buy whatever they want, seeing the skyscrapers as a status symbol.

Others feel alienated by the overt display of wealth pushing out public sector workers and creative workers on tighter budgets.

"I think it's absolutely ridiculous to spend that kind of money to live there," said wealth advisor Lawrence Bogar, who works in the city but lives across the river in New Jersey.

"You could spend the money on far better properties."