New York Letter

The Empty Subway Car Rule

New Yorkers like to think they live in a complicated city. They will tell newcomers that it takes years to be able to decode the mysteries of New York City.

This, like most things that New Yorkers say about their favourite city, is half true. New York is a complicated place—how could it not be, with a population of about 8.5 million, which swells by 1.5 million commuting workers each day? But it’s pretty easy to figure out.

There is only one basic rule about surviving and thriving here. It’s this: if you’re on the subway and a train comes into the station with every single car filled with passengers except one totally empty car, there is a reason for this. People are not crammed into the other cars because New Yorkers naturally seek out each other’s company. Something or someone or some smell in that empty car has driven every­one away.

The Empty Subway Car Rule is a kind of umbrella guideline that applies to the city in general: Pay attention to everything. The city is trying to tell you something important. Whatever you need to know—Is this Uber driver a psychopath? Is this restaurant hygienic? Is my accountant lying to me?—is there in the details.

Poker players call this a “tell”. Despite the best efforts of a serious poker player to hide his emotions and guard his reactions—what we call “a good poker face”—it’s an impossible thing to do. Everyone’s got a tell, poker players will say. The trick is to figure them out.

My former accountant, for instance, is a lifelong New Yorker who has two ways to pronounce the word because. She was born in Queens, so she mostly pronounces it this way—be-caws. Other times, for some reason, she’ll elongate the word—be-kizzzzzzzz—trailing off sounding like a bumble bee.

I spent a few years being baffled by this until I started to listen more closely. Sometimes, she’d say something like: “We’re gonna take some of these paper losses in 2021 and hold them back be-caws the new tax code makes that beneficial.” And sometimes she’d say something like: “The new tax code has a lot of exceptions so I’m not gonna address them be-kizzzzzzzz it’s still up in the air which ones will stick.”

And when I really listened, what I realised was this: when she said be-caws she knew what she was going to say. And when she said be-kizzzzzzzz she didn’t know what she was going to say and she needed a little extra time to figure it out. In other words, be-caws meant she knew why because. And be-kizzzzzzzz meant she had zero idea why because.

It took me a long time to discover this because I try, if possible, not to listen to people too closely. But the lesson here is, the more you pay attention, the smarter you get. And I got smart and got another accountant.

New York is the central nervous system of the American economy. It’s home to global banks and massive hedge funds and of course the eponymous New York Stock Exchange, which means it’s filled with people tasked with the job of figuring out where the American economy is headed, which for the past few months has been infuriatingly unclear.

New York rises and falls as the financial markets do, and the markets are terrible some weeks and not so terrible in the others, like a man on a ledge balancing and wobbling who may plunge to his death, or may miraculously get back to safety. It’s been very hard to decipher.

The unemployment rate continues to drop, but inflation surges forward unchecked. The Dow Jones Industrial Average—an index of the share prices of the leaders in American business—has bounced up and down like a very alarming electrocardiogram. Manhattan rents and house prices seem to be inching up—usually a bullish sign indicating that financially plugged-in New Yorkers are feeling optimistic and cash-rich—but commercial real estate is in free-fall. Consumer confidence around the country is pessimistically low, but consumer spending looks to be solid.

All of the normal, rational ways to predict the direction of the economy are sending out confusing mixed messages, which leave us with the tells. The city is filled with them. The city, as always, is trying to tell us something.

For instance: On Madison Avenue, there’s pretty much every single glamorous store in the world. Every luxury good, every fancy brand—somewhere on Madison Avenue someone is selling it, probably in one of those stores where you walk in and wonder, Who buys this crap?

Somebody buys it, of course. Each month, those shops manage to pay Madison Avenue rent. Someone goes into Gucci or Tom Ford or Hermès and plunks down cash for handbags and cashmere and things no one really needs. Part of being a New Yorker is walking around town, showing off your fancy possessions.

That’s the key to those retail businesses. You’re meant to spot those Gucci stripes or the pebbled Hermès leather or the giant Tom Ford zippers a mile away. We know that our fellow New Yorkers pay attention, and we want them to notice our finery. We want them to think we’re rich, even when—maybe especially when—we’re not.

But if you walk up Madison Avenue to the corner of East 70th Street, there’s a two-level shop called the Real Real which is a high-end consignment outfit where you can buy the same stuff from the same brands as you can up and down Madison—the same Hermès and Gucci and Tom Ford with the same pebbles and stripes and big zips. Just slightly used. People are taking their old fancy expensive clothes there—and luxury watches and jewellery—and the Real Real puts them up for sale and splits the profits with the consigner.

It’s someone else’s stuff—someone else’s nice stuff; someone else’s expensive stuff— originally bought at full price and now maybe slightly worn and a little scuffed, so a lot cheaper. It’s going to get a little worn and a little scuffed anyway, is the thinking. Nothing looks brand-new forever.

Philosophically speaking, we’re all a little scuffed and used. But it says something about a city that’s at the centre of the world financial system, that often seems to have an unlimited supply of the Extremely Rich, that one of the most popular shops on Madison Avenue is, essentially, a second-hand clothing store.

It’s not merely that some frugal New Yorkers are buying luxury brands on the cheap. What’s more telling is that many New Yorkers are selling their expensive goodies—their status markers!—in what looks like a massive liquidation sale, the kind of thing people and companies do when they want to raise cash for the tough times ahead.

Another possible tell: Last year, my credit card company offered a free membership to WeWork, the co-working office rental empire that became famous a few years ago when its initial public offering was withdrawn because some financial analysts, rudely, analysed the financials. The WeWork story is even being told in a lurid multi-episode television series, WeCrashed, on Apple TV+. But it’s still a going business, and it still has lots of co-working spaces in New York.

Signing up for a WeWork membership seemed like a smart thing to do because I never know when I’ll need a conference room or a place to meet or reliably fast internet and it seemed like a good place to get a lot of work done in a no-nonsense, distraction-free location. So I signed up and downloaded the app, but I’ve never actually gone to my local WeWork because I get a lot of emails and in-app messages every day telling me about the fun things that are happening at WeWork where everyone is supposed to be working.

Join us for the jewelry sample sale! Right now on the 2nd floor lounge! was yesterday’s email. The day before that was Join us on the 4th floor and find out all the ways you can help your dog stay stress free in this city! 

Every day there’s an email—or several—from the Community Manager of the WeWork. We’re having free manicures on the third floor, we’re building our own hot chocolate bars on five, we’re learning about poke bowls and making our own on two, and we’re offering cold brew coffee tastings all morning on four. Those, and an almost daily reminder that We are having wine tastings and happy hours starting at four PM!

There’s a lot of We and not much Work at your typical New York WeWork.

In between the self-care seminars and the customise-your-Old Fashioned mixology bars, I guess there are some sales calls and uncomfortable conversations about last quarter’s numbers, but you’d never know it from the endless stream of emails reminding everyone of the importance of taking a break every now and then, about the awesome stuff your fellow WeWorkers are doing which you can find out about by coming to the networking taco bar, and about how to handle workplace stress, which seems like a remote and unlikely ailment for the tenants at my local WeWork, unless they were overwhelmed and stressed out by the bewildering variety of fantastic wines from Portugal which we learned about in the third-floor lounge yesterday afternoon.

WeWork tenants are startups, mostly, and dependent on venture funding, which is still fairly robust. But there’s something ominous in the party atmosphere and summer day camp activities going on at my local WeWork, and presumably WeWorks all over town. If financial and legal services, the traditional pillars of the New York economy, start to falter, it will be the emerging startup businesses that power the next decade of growth. Or would be, if anyone at the WeWork did a full day’s work.

For me, the definitive tell—the empty subway car that indicates a serious problem—is an obscure index that I have discovered on my own.

My foolproof way to predict the direction of the economy is to attempt to make a room reservation at one of the private clubs around town. Most of the larger clubs have a small number of simply decorated and unpretentious bedrooms for members to rent. The cost is usually much lower than the cost of a more luxurious hotel, but staying at, say, the Yale Club is a lot more prestigious than staying at a similarly-priced Econo-Lodge in midtown.

And here’s the tell: people only stay at the Yale Club when they’re looking for a cheap but respectable option—something they can charge to their membership and if necessary take several months to pay off. In other words, if the Yale Club is full, that’s a very bearish sign. People are feeling pinched and cash-poor. On the other hand, when people are optimistic and feeling flush, they’ll gladly stay at a luxury hotel—the Carlyle or equivalent—and getting a room at the Yale Club is a breeze.

The Yale Club, I am sorry to tell you, is currently booked solid. Apportion and rebalance your financial portfolio with that in mind. The city is trying to tell you something, and that something is, tough times ahead.

Rob Long’s Letter from New York appeared most recently in the June issue.

6 thoughts on “The Empty Subway Car Rule

  • lbloveday says:

    Quote: Everyone’s got a tell, poker players will say.

    In my younger days I played many times in many poker schools; I even used to knock off at 2:30pm Friday, drive from Adelaide to Whyalla to play against shipbuilding workers with their pockets bulging with $50 notes looking for a new home

    One thing I can say with great confidence is, NOT everyone’s got a tell.

  • Alistair says:

    Good article.
    I’ve been doing something like this for years, looking for what I call “step-changes” – a small shift in popular culture which indicates a significant deeper change in cultural direction. One I noticed not long ago is that the media have suddenly started calling everything “unprecedented” Unprecedented floods, unprecedented bushfires…. when a moments search in the internet shows there is nothing unprecedented about them at all. As Jo Nova put it the other day “Imagine what the ABC could do with a billion dollar budget and access to the internet!”
    No – this is not random. The media are trying to push a narrative and “unprecedented” is what they want you to believe. – And, in the long history of the media, that’s unprecedented. It used to be just the news – now its just the narrative. We have moved over a step-change.

  • BalancedObservation says:

    Yeah well.

    Admittedly I only know New York as a tourist. However, I looked up my favourite hotel in Greenwich Village the other day – it was about $550 a night for essentially a three star hotel at best.
    When I first stayed there it was $80 a night. I talked to a guy in East Village about three years ago, he remembers paying $40 a week there. Those were the days when Bob Dylan lived there.
    If you went by hotel rates you’d reckon the US economy was in fine shape. Or if you went by the strength of the dollar you’d think the same.
    Fortunately there are more reliable indicators.

  • Tom Lewis says:

    Have just done a month in USA, including New York. The golden rule in the subway for loons is not to look them in the eye. There’s no way you should use the subways after 8pm unless it’s through very busy stations, which usually have lots of police.

  • Lewis P Buckingham says:

    Trying to work out the economy is indeed vexatious.
    A few months ago I noticed being stuck behind a few more smoking diesels than usual.
    Since then the tradies stream is unending as I drive to work in Sydney, a good prognostic sign.
    My super has started to struggle up to almost being in the black again, after a horror stretch.
    However at what cost, with the Aussie dollar so weak it means someone has started to buy our shares again from the US dollar zone.
    My experience says the ‘the domestic economy’ is an aggregate of patches, according to how the electorates fared.
    Under a Labor federal government Labor electorates get the cash and boost confidence and go well while the opposite is for the Coalition.. It switches when the Coalition is in power.
    Being in a swing electorate is the best.
    Cundletown was the first place in NSW to get the NBN under Gillard.
    It will be interesting to see how the Teals go, but I dare say they have learned how to look after themselves, so the economy isn’t so important.
    Another metric is the cash economy.
    It was dealt a blow during Covid however there are green shoots of growth to be detected.
    I am cautiously confident about the Australian economy.
    Those million homes will be filled by migrants bringing in hard earned cash with them, which will kick the can along the road a bit more

  • 27hugo27 says:

    Very diplomatic of you not to bring up racial issues. There is more than a spate of people being shoved or thrown onto the tracks by almost exclusively African Americans, completely ignored by the media. Number one rule now, stay away from the edge, back to the wall or pillar and stay alert.

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