Living high on Wall Street profits.

Record Bull Market Brings '80s-Style Indulgences Back

Wall Street appears to be bringing back the days of conspicuous consumption.

With the Dow Jones' Industrial Average soaring past 8,000, high-end retailers throughout Los Angeles report a stepped-up increase in sales.

While there's no way to specifically link increased spending to the skyrocketing stock market, the anecdotal evidence is piling up.

"I was shopping in Nordstrom last night, in the shoe department, and I told the sales manager I was a stockbroker," said Mark Tabit, regional development manager for Prudential Securities Inc. in Los Angeles.

"He said, 'My God, the best thing that ever happened to me is Wall Street. People are buying shoes, they are buying shirts - saying that they made this much, they made that much,'" Tabit said.

At the Beverly Hills jewelry store Van Cleef & Arpel USA Inc., a mention of the stock market prompts an effusive response from vice president Muffle Potter Aston.

"Isn't it wonderful? Absolutely, people are spending more because they have more disposable income," Aston said. "Sales are booming in Beverly Hills."

The story is much the same from travel agents for luxury cruise lines, brokers for million-dollar homes and salesmen for exotic automobiles.

"Sales are doing great, we've really seen a surge," said Geoff Emery, partner at Beverly Hills Porsche Audi Inc. "As of June, we're up 143 percent from last year. We have gone from 70 to 170 Porsches sold. We are back-ordered for many months."

As for real estate, the stock market - along with a much stronger economy - are pushing up high-end residential properties, said Jon Douglas, chairman of Prudential-Jon Douglas Co.

"People are making more money in the stock market ... that has fueled a fairly substantial increase in the activity in high-end residential," Douglas said.

After years of stagnation, better neighborhoods are experiencing old-fashioned appreciation.

Home prices in the Pacific Palisades zip code 90272 reached a median of $759,000 in June, up 26.8 percent from June 1995, according to La Jolla-based Acxiom/Dataquick Information Systems Inc., a real estate research firm.

Travel agents say the cruise line business is flush.

"It's so busy we are swamped, and I can't talk right now," said Bea Benett of LTS Travel Service in West Los Angeles, which books customers on Princess, Royal Viking, Premier, Royal Caribbean and other cruise lines.

Other travel agents agreed that bookings on luxury cruises are strong.

"I think the overall economy and the Dow are intermingled." said Nancy Bleiweiss-Nevil, president of the Marina del Rey-based Connoisseur Travel Management Inc.

"People are not afraid to spend their money," she said. "They are feeling good, and indulging themselves."

Christie's, the New York auction house for upscale art and jewelry, recently opened up a shop in Beverly Hills to cash in on West Coast prosperity.

Christie's Chairman Marcia Hobbs doesn't know if Wall Street is behind the rise in art prices, but she noted: "I find it a remarkable coincidence that art prices are going up with the Dow."

Even economists are finding it hard to gauge how much the current spending boom is connected to Wall Street prosperity.

In general, upper-income brackets have done well in the 1990s, and many economists have cited that as a major factor in propelling the sales of manses, diamonds, and motorcars.

"There is no question that more money is going into leisure - travel is booming and BMW and Mercedes sales are going through the roof," said Stan Plog, chairman of Reseda-based Plog Research Inc., a consumer survey company.

But Ira Kalish, senior economist with Price Waterhouse LLP in Los Angeles, is cautious about a cause-and-effect with the stock market.

"I don't see any evidence of an uptick in spending on luxury items (due to the market)," he said. "For most households that have equity, they have it in long-term accounts."

Indeed, some stockbrokers said their clients are not out spending profits, but retreating into conservative investments.

"I don't think that any of my clients is spending," said Jim Wagner, Manhattan Beach-based stockbroker and financial analyst with GBS Financial Inc.

"A lot of people are reticent with the market over 8,000 (because it may fall)," Wagner said. "I just had a client with $5 million (under management) getting out of the market - but he put his money into AAA-rated bonds, he didn't spend it."

Kalish contends that the market boom provokes different behavior than the last boom to sweep though Los Angeles - real estate.

In the late 1980, homeowners might have plowed profits back into their houses in the form of additions and swimming pools - which would have shown up as consumer spending, particularly as furnishings were acquired.

"Back then, (homeowners) had a tangible asset that was appreciating, and they thought it would last. So they added to it." Kalish said. "Now they're adding to their holdings of mutual funds. It's the same thing."

Indeed, Americans have added just over $100 billion to mutual funds in the first six months of this year alone, according to Lipper Analytic Services Inc.

But in addition to salting more money into investments, some say the bull market is helping persuade them to make purchases they had been putting off.

John Mulcahy, a stockbroker in the Century City offices of Prudential Securities Inc. said he is finally going ahead with a long-needed addition to his Manhattan Beach home.

"I wouldn't say it's only the hull market, but it has helped," Mulcahy said. "I'd been wanting to do it for some time."