But for the new generation of rich Chinese, American military schools are seen as the disciplined training grounds for tomorrow’s economic warriors.

An article in China Daily says more and more wealthy Chinese parents are turning away from pamper-parenting and opting for the tough-love of pre-college military academies in the U.S.

“Good education doesn’t mean letting your child enjoy privileges, especially our boys,” said Song Wenming, an entrepreneur in Jinhua, East China’s Zhejiang province. “They should be raised in tough conditions to know what to fight for in the future.”

(This is, of course, the country with the famous proverb: “Beating is a sign of affection, cursing is a sign of love.”)

Mr. Song sent his 17-year-old son to Valley Forge Military Academy (VFMA) in Pennsylvania. A few years ago, there were no Chinese kids at Valley Forge. Now there are 28.

The daily routine is rigorous: physical training, marching, shining shoes and badges, ironing clothes and ties, memorizing codes and rules, learning to take a bath in seconds flat, getting yelled at by seniors. The article says 10 of the 13 students who joined Valley Forge have asked for transfers.

Mr. Song’s son was more positive: “The endless training and scolding are just ways to build up our character, they are not personal.”

I’m surprised the wealthy Chinese can’t find schools at home to put them through endless drills and psychological batterings. Why not just join P.L.A.? Perhaps getting toughened up in the U.S. is more socially acceptable.

Do you think military schools are good for wealthy children? Do you think the Chinese will gain advantages from all those U.S. drills?

The 12,000-square-foot giant is the highest-priced residential listing in Chicago. Oh and by the way, it’s raw space.

Mr. Wrigley, age 46, is also selling his 11,013-square-foot, Italianate mansion on Lake Michigan in Lake Forest. That’s priced at $14.5 million.

The question is why is he selling now?

Mr. Wrigley’s realtor said Mr. Wrigley is looking for a smaller space. That’s understandable given that 12,000 square feet can feel a bit roomy, even for a family. It’s entirely possible he came down with a case of Oversized Home Syndrome.

Or perhaps, like lots of rich people today, he just wants to downsize on real estate. He has an $11 million beach house in North Palm Beach, Fla. And an $11.53 million property in Aspen, Colo.

But few sellers would dare sell high-priced homes in the current housing market unless they needed to. The top of the luxury market — i.e., $14 million pads in Chicago — is under growing pressure as the American wealth machine grinds to a halt. Even with stocks up, there simply aren’t as many multi-millionaires today who can afford eight-digit properties.

Mr. Wrigley led the sale of his family’s chewing gum empire to Mars Inc. for $23 billion in cash in 2008. So presumably he has plenty of liquidity.

Why do you think Mr. Wrigley is unloading his Chicago palaces? And will they sell at the current prices?

Well, it may have fallen on deaf ears.

A column on the Real Estate Channel cites stronger-than expected sales at the Ft. Lauderdale International Boat show last week. Lazzara Yachts, a Tampa, Fla., builder of custom boats in the $4 million range, had more sales midway through the boat show than all of last year.

Yacht broker Jamie MacGregor of MacGregor Yachts in Palm Beach Garden, Fla., added: “The phones are ringing again as of six to eight weeks ago, what a difference a year makes.”

Yacht reps said that much of the increase yacht demand is coming from two regions; the Northeast and Middle East. “That correlates in timing with both the big bonuses about to be handed out by several Wall Street Investment banking firms at year end, and increased oil prices in the Middle East,” the article says.

Of course, yacht brokers are always saying business is great–even when it is sinking. And just because the buyers are from the Northeast doesn’t mean they are Wall Streeters with bonuses. The stock market’s rise has lifted many boats in the finance-heavy Northeast, not just Wall Streeters.

Still, all those traders earning 40% to 50% more this bonus season aren’t likely to stuff it in the mattress. They are likely to do what most people do when they get windfalls–they spend it. Especially when they can get such good deals on yachts.

In fact, it is a new SWAT team formed within the Internal Revenue Service to target the wealthy.

The idea is simple: the rich are developing ever-more sophisticated structures and strategies to avoid taxes. And the IRS hasn’t kept pace.

The new group, according to that Dow Jones Newswire article by Arden Dale linked to above, will look at “trusts, real-estate investments, royalty and licensing agreements, revenue-based or equity-sharing arrangements, private foundations, privately held companies and partnerships.”

The group won’t just look at a person’s individual return, but also will look at the entire universe of companies or associates for a filer.

The group will be staffed with new hires from outside the agency who are skilled at high-net-worth tax structures. It will be staffed with agents who have experience working on corporate audits.

The combination will be a team that is “more capable of auditing the complicated affairs of wealthy individuals than the agents who have traditionally audited small businesses and individuals,” said Pamela F. Olson, a partner in the tax group at law firm Skadden, Arps, and formerly assistant secretary for tax policy at the Treasury Department.

The group is a welcome addition to an agency that has obviously allowed far too much off-shoring of assets and other breaches by those who can afford good lawyers. And the IRS commissioner said the group will only launch a “small number” of audits for individuals with net worths in the tens of millions.

The risk is that the group is perceived as part of a redistributionist “wealth hunt” by the Obama administration, which is already raising taxes on the rich. Another risk is that it is ineffective, as the very rich and their expert lawyers continue stay one step ahead of the bureaucrats.

Do you think the Global High Wealth Industry Group is a good addition? Will it work?

Associated Press

New Jersey Gov. Jon S. Corzine waves as he concedes Tuesday’s election to Republican challenger Chris Christie.

Standing on line at my polling place in Manhattan yesterday, I overheard a woman tell another “It’s the money that really gets me. He’s buying the election. Everyone is hurting and he’s spending $100 million on junk mail.”

She was referring, of course, to Michael Bloomberg and the estimated $100 million he spent for a third term as New York City mayor.

Mr. Bloomberg won of course. But his narrower-than-expected victory, coupled with the defeat of Jon Corzine across the Hudson River, raises a question in the new era of populist politics. Did the they lose votes because of their personal wealth?

Conventional wisdom was that the personal fortunes spent by Messrs. Bloomberg and Corzine–outspending their opponents by huge ratios–would help them overcome any obstacles and criticism. Instead, their fortunes and personal spending may have hurt them both. It didn’t help that both reaped their fortunes from financial markets.

In exit polls, nearly two-thirds voters who backed Mr. Bloomberg’s opponent, William Thompson, said Mr. Bloomberg’s spending on the race was an important factor in their decision to vote against him.

In New Jersey, Mr. Corzine’s opponent, Christopher J. Christie, hammered on Mr. Corzine’s ties to Wall Street and his personal investments.

There were other reasons voters refused to pull the lever for Mr. Bloomberg and Mr. Corzine (term limits and budget woes, respectively).

But at a time when unemployment is nearing 10%, home foreclosures keep rising, the stock market remains volatile and taxpayers feel like they have bailed out the bonus kings of Wall Street, large personal wealth has become a liability.

The question now? Was this a one-time event or will voters will punish wealthy candidates in coming elections, too?

But, an analysis by the Tax Foundation suggests that to close the deficit by 2010, couples in the top tax bracket (those earning $373,601 or more) would have to be taxed at 95.2%.

To close the deficit by 2012, the top-earners would have to earn 74%.

This is, to be sure, a misleading analysis. No one is suggesting the deficit should be closed by 2012. And even if they did, the gap would be closed in part with government spending cuts.

Still, the chart is worth bearing in mind for one simple reason: The government is going to need to raise revenue as it expands. And it is going to have to get the revenue primarily from one source: wealthy taxpayers.

The House Democratic health-care plan includes a 5.4% tax surcharge on those individuals earning more than $500,000. That is on top of President Obama’s proposal to raise the tax rate for those earning more than $372,950 to 39.6% from 35%.

The tax increase would hit only 0.3% of tax filers and would raise $460.5 billion in the next 10 years, according to congressional estimates.

Opponents point out two big problems with the plans. First, it is a mistake to tap only rich people to pay for services that will be used by all.

Second, the revenue projections may well fall short, given the probable decline in incomes for some wealthy in the past year. In the end, taxes may have to increase for everyone.

First, there was the recent soft-launch of his yacht, the world’s largest.

Then there was his purchase of a $90 million estate in St. Bart’s.

Now comes word of a $52,000 lunch in Manhattan.

According to TMZ, Mr. Abramovich hosted nine guests at Nello’s on the Upper East Side on Friday. The tab came to $47,221.09. He added another $5,000 tip (on top of the $7,328 gratuity already included) for a total of $52,221.09.

In an email, a spokesman for Mr. Ambramovich denied the bill was Mr Abramovich’s. He said Mr. Abramovich did eat at the restaurant but that the “party spent no more than a tiny fraction of that amount - less than a couple of percent.”

A manager at the restaurant declined to comment.

The bill shown by TMZ, however, is rich with details–and explains how someone could rack up a $52,000 bill. The main culprits: wine and truffles.

There were the three bottles of La Tache, for $5,000 each (alas, the bill doesn’t give the vintage). There were the two bottles of Petrus, also at $5,000 each. And two bottles of Cristal Rose, at $5,000 each.

The food was typical Manhattan, with most entrees going for $50 or less. But the group had two orders of truffle carpaccio for $100 each, and three truffle taglionis for $585.

Is this shocking and abhorrent at a time when so many in the U.S. are losing their homes and jobs?

That is one way to look at it.

Another way is to thank him for being a one-man stimulus package. Beyond the lunch, I’m sure the Abramovich visit included plenty of shopping, hotels, drivers, nightclubs, and (perhaps) artwork at this week’s big auction nights.

And as a New York resident, I look at the $3251.89 tax line and have two simple words for Mr. Abramovich: Thank you.

What do you think of the Abramovich lunch bill?

UPDATE: A spokesman for Mr. Abramovich had the following update on 11/6:
“The $47,000 check for food and wine at Nello’s in New York on October 30, 2009, published by various media outlets over the past few days, is in no way connected to Mr. Roman Abramovich. While Mr. Abramovich and five others did dine at Nello’s on that date, their total bill amounted to only a couple of percent of that amount, and no one consumed alcohol. The assertion that they ran up a bill of any greater magnitude is entirely false.

We are in the process of investigating the origins of this inaccurate story, which we have been told was perpetuated by people connected to the restaurant. Our legal counsel has been instructed to review any appropriate action to rectify this situation.”

How about the Ferrari house?

An Abu Dhabi developer is reportedly is in talks with the Italian car maker to make Ferrari-branded luxury homes, according to a report in Maktoob.

There are no details, and it all sounds preliminary. But the Ferrari houses would be part of a Ferrari theme-park that Aldar Properties is currently building on on Abu Dhabi’s Yas Island (site of this weekend’s Formula 1 race). The theme part is called, what else, “Ferrari World.” It is slated to have 216-foot prancing horse on the roof.

What would the Ferrari homes be like?

My guess is they would have lots of leather and stainless steel interiors. They would consume spectacular amounts of energy. They would be purchased by wealthy middle-age men from Miami or twentysomething oil heirs from the Middle East. They would come with a household staff of 50 to fix the repeated breakages. And they would be undeniably cool. (Though Ferrari may be going a little overboard in its quest for non-Western markets–check out this special China-edition Ferrari with cracked-porcelain paint.)

Who knows, maybe we could even have a domestic drag race between a Porsche Kitchen and Ferrari Living Room. Perhaps this is what the comedienne Steven Wright had in mind when he joked about accidentally using his car key in the lock on the front door to his house; when he turned it, the whole building started up.

Would you buy a Ferrari house?

Wealth Report readers will recall the August sale of Maltese Falcon, the 290-foot square-rig–and the largest private sailing yacht in the world–that was built by venture-capitalist Tom Perkins. At the time the rumored sale price was around $90 million to $100 million.

Since then, there have been all kinds of rumors about the buyer. Initial reports said the buyer was Russian. Other reports said it was a British hedge funder.

Wealth Report can now confirm an unsourced report on Yachtpals, that the buyer was Elena Ambrosiadou, founder of the hedge fund Ikos Partners.

The sale price: $120 million.

Through the yacht broker on the deal, Ms. Ambrosiadou confirmed the sale and the purchase price. She shies away from the term “owner” (even though she bought it) preferring to call herself the “caretaker” of Mr. Perkins’ unique creation. The yacht is still available for charter through Burgess, the broker on the deal, for 378,000 euros a week, or roughly $550,000.

So who is Ms. Ambrosiadou? Media reports from 2008 say the Greece-born hedge funder was the highest paid woman and wealthiest female entrepreneur in Britain. The British press estimated her net worth last year at 200 million pounds ($327.5 million), though she is probably worth far more if she could afford to plunk down $120 million for a boat.

She recently moved her fund to Cyprus, according to press reports, to avoid Britain’s new tax increase and rules for nondomiciled residents. Her fund strategy is reportedly based on computer trading models.

Beyond that little is known. Yacht industry insiders say they don’t recall Ms. Ambrosiadou ever owning a yacht before–or even a small vessel. But since she was born and raised in Thessalonika, I would guess she knows her way around a sail boat.

Besides, Maltese can be sailed by computer, which should be a breeze for its new owner.

The rich have already created their own country. Are they about to create their own species?

Futurologist Paul Saffo says rapid advances in biotechnology will enable people to grow their own replacement organs, take specially tailored drugs and use robots and artificial limbs to live longer.

But, he says, the advances will be affordable only by the super-rich. That raises the prospect of a new, biological divide between the classes, with the “rich evolving into a different species entirely, leaving his not-so-rich counterpart behind.”

“I sometimes wonder if the very rich can live, on average, 20 years longer than the poor. That’s 20 more years of earning and saving. Think about wealth and power and the advantages that you pass on to your children.”

This is, of course, a disturbing and somewhat shocking prospect. Our wealth divide could become a health divide, which would further increase the wealth divide.

But is it realistic?

For one, we already have a health divide, where the wealthy receive (on the whole) much better care and technological benefits than the nonwealthy. Indeed, they have enjoyed better health care for centuries, and they have yet to form a race of super-rich cyborgs–-in part because the wealthy in America is a fluid and rapidly changing group.

What is more, advances in health care have tended to spread rapidly from the rich to everyone else. Just like computers, gadgets or cars, health-care technology that at first is priced solely for the wealthy is quickly scaled to larger markets and sold en masse.

Still, we have never seen the potential for bio-tech advancements like we see today — coupled of course with growing global inequality.

Do you think the rich will create their own super-race? And what would it look like?