number on the economic fallout from the World Trade Center attack, releasing a

report that estimated the loss at somewhere between $90 billion and $105

billion over the next two fiscal years. Of that, $45 billion was for the loss

of the buildings and the future earnings of thousands of victims, and $45

billion to $60 billion for "ongoing costs."

But even Mr. Hevesi-who produced his report, in part, as a lever

to gain more federal aid more quickly-wasn't able to identify the full effect

being felt on every city block. His spokesman, David Neustadt, explained the

problem: "It happens that, on one block, 20 people lost their jobs, so the

bodega on that block is in real trouble, whereas on the next block, just out of

chance, no one got laid off, so that bodega is O.K.," Mr. Neustadt said. "How

do you identify that? I don't know, but it's there." And so are the stories.

The Attorney

Harvey Weitz's firm, Schneider, Kleinick, Weitz, Damashek &

Shoot, the Cochran Firm (as in Johnnie … ), is located in the Woolworth

Building at 233 Broadway, where the physical effects of the World Trade

Center's collapse can be seen and felt every day.

"My office just plain stinks," said Mr. Weitz, a personal-injury

litigator. And that's with the windows closed.

Overall, conditions are "intolerable," he said. Until recently,

the normally slow elevators were running on makeshift generators. The

air-conditioning doesn't work. Checks coming in couldn't be deposited because

the local Citibank branch was closed. Phone service is still spotty. On Oct. 8,

one of Mr. Weitz's clerks was locked in the file room for two hours, in the

dark, when the power suddenly shut off.

And then there's the stench. Mr. Weitz says he has a perpetual

headache, a metallic taste in his mouth and an electrical smell in his nose.

Employees with asthma or allergies are miserable. Some have chronic nosebleeds;

others wear dust masks at their desks. One secretary had to quit.

But Mr. Weitz called such things "small inconveniences." What

bothers him more is the loss of business: "We've lost a month of incoming

matters, and we'll never make up the loss."

For the two weeks after Sept. 11, Mr. Weitz said, "we were, as a

practical matter, out of business." Since then, the courts and the insurance

companies that are so essential to Mr. Weitz's income have begun to pick up.

But it's slow.

Mr. Weitz, who works on contingency, not billable hours, said

he's had to let go a number of people-clerks and secretaries as well as

attorneys.

Yet, he continued, there's a new wave of business starting to

roll in. People affected by the attacks have been calling Schneider, Kleinick

"by the dozen," he said. For now, he's telling them to wait and see what

compensation the government offers. Except for relatives of the plane

passengers or people working in the World

Trade Center

who were told to return to their offices, he said he will probably encourage

most clients to take the no-fault compensation and not sue-rare advice from a

lawyer in the peronal-injury field for 40 years, he admits.

The Debt Man

"There is a major liquidity problem in the country now," said

Charles Starace, a debt collector. "Companies are looking for money, because

they don't want to have to lay off people. The money we collect means

salaries."

Mr. Starace, 35, who prefers to be called a "recovery

specialist," has worked for the Bilateral Credit Corporation, a collection

agency based in midtown Manhattan,

for one and a half years. He likes what he does, calling it "the ultimate

backstage pass into American business."

Since Sept 11, the companies he collects for have changed, he

said.

"Normally, [our clients] tell us to be soft," Mr. Starace said.

"This month, they have not instructed us to be soft. We're not going to make a

phone call and leave it at that; now we're hunting down lawyers in the area."

He said he takes no pleasure in moving from the "soft

stuff"-phone calls, letters, offers to create reasonable payment plans-to the

"hard stuff"-filing lawsuits, freezing assets, foreclosing on mortgages. But he

will if he has to.

Yet it's apparently not doing much for Bilateral's bottom line.

Mr. Starace estimates that Bilateral is down 25 percent on money collected for

the month-at a time when the volume of business coming in has increased.

Instead of being assigned 20 to 30 new accounts (or "decks," as they're called)

each day, ranging in amount from $200 to $150,000 and averaging about $1,500,

he's getting more than 30 new decks a day, often for large amounts of money, he

said. But fewer people are paying-and when they do, they pay less.

Mr. Starace's boss and the company president, Steve Muller,

thinks this is because debtors really don't have the money. And he sees a new

dynamic out there.

"Debtors are being more

honest, and collectors are becoming more timid," Mr. Muller said. "They're

realizing that the almighty dollar has no value compared to life."

But Mr. Starace disagrees. He thinks that most debtors are still

avoiding bills for the same old reason-because they think they can get away

without paying them.

"If you don't have the money, O.K., tell me that and we'll work

something out together," he said. "But you've got to tell me that. And don't

ever hang up on me. Oooh, don't do that."

The Furniture Saleswoman

In the last few weeks, Melanie Rappaport has spent a lot of time

in her office. A district sales rep for Cort Furniture Rental for five years,

she has always relished knocking on doors, drumming up new business, taking her

portfolio of Cort's wares wherever she went.

But since Sept. 11, she's been spending six days a week on the

phone with clients who are scrambling to set up new offices.

"I'm usually never here," she said. "I like being outside

better."

Ms. Rappaport's biggest client is Bank of America, which had

trading floors in the north tower of the World

Trade Center.

By the end of the day on Sept. 11, she got a furniture "panic call"-the first

of many-from Bank of America. Then the Secret Service called. Then FEMA-the

Federal Emergency Management Agency, which has overseen the rescue efforts at

ground zero.

Ms. Rappaport spent a lot of time on the phone to Cort's

warehouses in Brooklyn and New

Jersey, and to suppliers as far off as California,

to help her clients. "They were like, 'We need 1,600 of this, 1,600 of that,'"

she said.

As business returns to something like its normal state, Ms.

Rappaport would like to get back in the field. But she knows that with

tightened security in even the least-celebrated office buildings, this will not

be easy.

"You can't just show up at a building anymore and see who you

need to see without an appointment," she said. "They won't let you in. Waiting

on line at the MetLife Building

for 20 minutes? I'm not going to do that."

The Flower Distributor

On Oct. 1, a memorial service was held at the Cathedral of St.

John the Divine for the 80 Windows on the World employees lost in the World

Trade Center

attack. The flowers adorning the cathedral's interior-500 stems of muted blue

delphiniums, white hydrangea and sprays of orchids-were a gift from Bianca

Jaigla, owner of Banchet Bianca Flower Design. Windows on the World had been

Ms. Jaigla's biggest account.

"We were in there seven days a week. We're very fortunate our

people didn't get caught in there that day; they were on the way," said Ms.

Jaigla. Of the restaurant's employees, she said quietly, "They were our good

friends."

Windows on the World also represented approximately 35 percent of

her revenue,  not including the flowers

she regularly provided for private parties held there by Trade

Center tenants like Morgan Stanley

and Cantor Fitzgerald. All in all, about half of Ms. Jaigla's business was lost

in the collapse of the Twin Towers.

"The day before the attacks, the flowers had come in for Windows

on the World," Ms. Jaigla recalled. "The flower cooler was full." That day, she

said, "we tried to give some of them away. Some we sold. Half of them we just

had to throw away."

The timing of the hit to Ms. Jaigla's business was particularly

inopportune. For 19 years, the Thai-born Ms. Jaigla had worked out of her Chelsea

studio, running a word-of-mouth business that catered primarily to high-end

clients in the financial industry. Earlier this year, she and her sister,

Pisamai, rented out an expensive space in the meatpacking district, stocked it

with the biggest flower cooler in New York City

and set about launching an exclusive shop, with a room for private parties.

Now, with the shop still a mess of raw beams and drywall, Ms.

Jaigla has struggled to keep her business afloat. Two of her staff have already

been laid off.

The Nanny Service

"We went for two weeks without the phone ringing," said Cliff

Greenhouse, owner of two nanny agencies. "To add insult to injury, this is our

Christmas season: Between Labor Day and Thanksgiving, we normally generate

about 50 percent of our business-nannies go off to college, people are making

changes in their lives."

Mr. Greenhouse and his

brother, Keith, have run the $2.3 million two-agency business started by their

father-Pavillion Agency in Manhattan and the Nanny Authority in Newark-since 1962. For a business that normally

receives hundreds of calls a week, the last month has been unsettling.

"I think I'm kind of fortunate that I accommodate a very small

percentage of the population, very-high-income people who will always need our

services," he said. Still, "I'm petrified. I'm always hearing from my mom about

the Depression."

In the last few days, demand has started to pick up. Yet, said

Mr. Greenhouse, he's facing another dilemma: nanny flight.

"After Sept. 11, I had at least a dozen nannies saying their

parents want them to come back home. What's worse, the nannies that we're

placing are saying they don't want to come to New York

City …. That's their dream, normally, to work in the

city. Now they're requesting Atlanta, Philadelphia, Maryland, southern New

Jersey even-but not close to the city."

The Charity

Had the Twin Towers

still been standing on Sept. 23, their plaza would have played host to 5,000

cyclists at the start of New York City's

National Multiple Sclerosis Bike Tour. It would have been a big, colorful

affair, and, just like last year, it was expected to have added $1.5 million to

the society's coffers.

But the events of Sept. 11 laid waste to those plans. With their

rally point in ruins, M.S. tour organizers had to postpone the event until Oct.

14 and move it to Westchester. And while that's not Siberia,

no one expects more than 500 cyclists to show up. That will most likely

translate into a loss of more than $1 million in pledges and donations. 

"Losing that means we'll have to consider cutting services," said

Carol Kurzig, the executive director of New York City's

chapter of the National M.S. Society. "We'll never be able to replace

everything we're losing from this bike tour."  

Crises like Ms. Kurzig's are endemic across the American

nonprofit landscape.  Donations that

would normally go to any number of charitable causes are now flowing into

W.T.C.-related funds. In addition, direct-mail solicitations are largely going

unanswered if they're not for World Trade

Center victims.

But there's also a great deal of anecdotal evidence to suggest

that donors simply haven't been given the opportunity to give: In the aftermath

of Sept. 11, so many fall fund-raising events-typically the year's most

lucrative-have been canceled that perspective donors have gone untapped.

Like the M.S. bike tour.

"We cannot regenerate the momentum that we had for the World

Trade Center

ride. Everybody's all thrown off-base," said Ted Beyda, who was on track to be

this year's top fund-raiser. "It's difficult to get people restarted. Now we're

stuck betwixt and between."

In the week after the World Trade Center catastrophe, New York became the city that never sleeps–literally. Besides the rescue workers, firefighters, police and construction workers picking through the rubble, thousands of guardians of the city's telecommunications and power network also worked around the clock to keep New York lit and moving.

Early Sunday morning, companies and agencies from Con Edison to Verizon to the Metropolitan Transportation Authority were at ground zero, assessing the damage and trying to circumvent it. Surrounded by soldiers and enveloped in acrid smoke, the utility workers took back lower Manhattan block by block, fixing one problem before moving on to the next.

"They give us no idea of the big picture," said a Con Edison manager who did not want to be identified. "They just tell us where to put what."

In this case, the what was a 1,000-kilowatt temporary generator, and the where was the corner of Broadway and Morrison, where a large business customer still had no power.

The gray metal box had been brought from New Jersey on the back of a trailer. It was one of 50 generators the utility has installed in lower Manhattan since the towers went down. More than 26 miles of high-voltage cable, some of it in open-air ducts and some of it in temporary shallow trenches, line the streets.

A few blocks away, near a group of sanitation and M.T.A. workers hosing down the steps of the Wall Street subway station, another Con Edison crew was going from basement to basement, turning off switches in hopes of preventing a power surge when everybody turned their lights back on. Their progress was spotty, dependent on whether the building managers could get past police barriers to open the doors for them.

"We're not allowed to turn anything off ourselves," one worker said.

Con Edison said that the demand for temporary power had been overwhelming. Two major Con Ed substations giving juice to the Fulton network (which stretches from Dover to Wall streets, between the East River and William Street) and the Park Place network (from Thomas to Murray streets, between Broadway and West Street), are located next to 7 World Trade Center, which collapsed late in the day on Sept. 11. Con Edison would not give details on the condition of the substations, but did say that 12,000 customers had lost service. As of Tuesday, more than 8,000 of them had gotten it back.

Only slightly better off is Verizon, Manhattan's major phone-service provider. It, too, had a central office directly next to 7 World Trade Center, at 140 West Street. Verizon workers were kept from reentering it until Sept. 14, three days after they'd fled. When they returned, they found the four enormous call-processing computers that serve three million data circuits, which were housed in debris-free and environment-controlled rooms, caked in dust or drowning in water.

"The first thing we did was pump out the cable vaults," said John Bonomo, a Verizon spokesman. "Water and telephone cable don't mix."

Mr. Bonomo said that the central office at 140 West Street handled 200,000 phone lines.

Verizon Wireless made 5,000 phones available to emergency-response authorities last week, but as of Sept. 12 only about 800 were claimed.

"A lot of those lines go to offices or companies that just don't exist anymore," Mr. Bonomo said.

On Fulton Street Monday morning, Ozzie Garcia oversaw a Verizon crew that was going down into manholes to check the status of copper and fiber-optic cables. They used what is called a 630-set–sending signals and checking any trouble spots with a hand-held amplifier. They, too, had to proceed building by building.

"It's a slow process," Mr. Garcia said. He is one of as many as 3,000 Verizon employees working overtime downtown.

Nearby, technicians for Lexent, an independent contractor brought in by the city to check the health of fiber-optic cable, were having an easier time. They had to climb down into manholes as well, but only to shine special lights onto the cable. If there's a signal, the whole line is all right.

"So far it looks pretty good," said the technician, who did not want to be named.

Meanwhile, workers from the M.T.A. faced a rather black-and-white situation. Stations downtown, like Wall Street and Bowling Green, needed only to be hosed off and to have the magnetic strips in the turnstiles cleaned of dust. The Rector Street station of the N and R lines, located just east of the World Trade Center, is intact, but not in use because of serious damage to the Cortland N-R stop.

Worse off are the Cortland Street and Rector Street stations on the Nos. 1 and 9.

"All we can see is either end of the tunnel," Al O'Leary, an M.T.A. spokesman, said. "We suspect it collapsed."

He said that service between Chambers Street and South Ferry will be discontinued "indefinitely."

More recently, its low-rent but flashier cousin, Nasdaq, picked up on the celebrity bell-ringing act, going so far as to build a window-encased studio, à la Total Request Live , on the ground floor of its digs at Times Square.

For a while, of course, it worked. Everybody except Warren Buffett wanted to be affiliated with technology and the Internet (Nasdaq's bread and butter), and the exchange had its pick of celebrity bell-ringers.

The benefits were mutual. Celebrities and business executives got to bask in the tech-boom heat. And the Nasdaq supposedly picked up a bit of celebrity cachet. As Nasdaq executive vice president David Weild said, "We do hope to get interest and notoriety" from the guest appearances.

These days, though, with "tech" a dirty word and many of the 4,300 companies listed on the Nasdaq dropping faster than the Boston Red Sox, notoriety alone is often more like it.

And yet the Nasdaq under chief executive Hardwick (Wick) Simmons is sticking to its formula, regularly displaying on its giant Times Square video screen the grinning face of some C.E.O. or celebrity ringing the bell–actually, pushing the button–that launches another day of trading.

Is there a correlation between the guest bell-ringer and the market's doings that day? Has the Nasdaq chosen its bell-ringers wisely?

Consider the bizarre scene at the corner of Broadway and 43rd Street on Thursday, Aug. 30. The Nasdaq invited Michael Jackson to ring in the day. It was Mr. Jackson's 43rd birthday the day before, but ostensibly the goal of the invite was to cash in on the media blitz surrounding his tribute concerts at Madison Square Garden on Sept. 7 and Sept. 10, as well as the release, in October, of his first album in six years.

The event made for some awkward curbside viewing. The King of Pop shuffled uncomfortably around the Nasdaq studio, nodding diffidently at no one in particular and eating cake. He rang a bell and pushed the button, and for some reason was given a poster of Shirley Temple by Mr. Simmons. A small cadre of fawning girls, and a few young men, stood outside and occasionally squealed. (None, The Observer found, were familiar with the National Association of Securities Dealers or its mission.)

After investors got done scratching their heads and exchanging Bubbles jokes, they sent the composite index spiralling to a new low, from 1,817 at the opening to 1,791 by day's end.

Obviously, a pop star with little remaining pop and a stock exchange with little remaining sizzle made for some bad karma.

Then again, the Nasdaq–which has been planning an I.P.O. for almost as long as Mr. Jackson has been preparing his new album–showed it still has some foresight when, on Monday, Aug. 27, it brought in the inspirational Jennifer Capriati to open trading. All sweat and no frills, she has been cracking cans of whoop-ass all over Flushing ever since.

After Ms. Capriati rang the bell, trading stayed level for the day and losses were avoided. The aptness of her appearance was not lost on Nasdaq's executives: "She's a woman that had a great surge early on in her career, and then just has made an absolutely extraordinary comeback," said Mr. Weild. "And we like all that she stands for."

The lesson for Nasdaq? Pick your talent wisely. Techno kings are going over no better than pop kings. Investors don't want the day launched by the same people who've delayed their retirements and torpedoed their portfolios. Give them hard-working types and success stories–or at least a little gaiety.

And then cross your fingers.

Consider the recent record:

August

Mr. Jackson, it turns out, was the second bad idea last month. The first was on Aug. 1, when the chief of 3Com, the hand-held computer maker, opened trading. Apparently Wick Simmons and the boys didn't mind that 3Com had just posted a loss of $500 million and was planning to lay off 2,000 workers. The market did mind, however: The Nasdaq lost 263 points last month, reaching depths of historic proportion.

The alternative–and it bears repeating: Capriati .

July

Michael Dell from Dell Computers opened trading on July 20–just as the Nasdaq-listed company was about to announce losses of $100 million. Its stock value had been halved in a matter of months, and yet Mr. Dell was looking at $23 million townhouses on the Upper East Side. Then rumors started spreading that hedge-fund manager Larry Bowman, an apparent adviser to Michael Dell, was laying eggs. So, it turns out, was the Nasdaq; it ended up losing 130 points in the month.

Felix and Concetta Grucci of the Grucci family (of New York fireworks fame), though, rang the bell on July 3. The Nasdaq closed up three points on the day. The way things are going, Nasdaq may not want to wait until next July to invite them back.

June

Let us say, hypothetically, that it was mid-2001 and you owned a stock exchange. What's the last company you'd want to have ring your bell? Ding-ding-ding! You've got it: Worldcom.

The lumbering telecom giant had just watched its profits drop by 50 percent and was in the midst of axing 6,000 employees. And yet on June 11, Wayne Huyard, chief operating officer of Worldcom-MCI Group, came round to kick off the trading day. Was this the "notoriety" part, Mr. Weild?

May

You can't get a better steak in town than at Smith & Wollensky's. But the stock? As The Observer reported, S&W's very own diners love the meat but were not very optimistic about the restaurant company's prospects on the market. Yet there was Alan Stillman, ringing the bell on May 23. Today Smith & Wollensky stock, which almost reached $9 at one point, is hovering around $5. We're not ones to say "We told you so" … but the Nasdaq dropped more than 50 points after Mr. Stillman's appearance.

Meanwhile, one of the few dot-coms to win the branding battle was 1800flowers.com, and having its executives over on May 11 to ring in the day was a smart, tech-driven idea. The Nasdaq only lost 23 points that day–no rose garden, perhaps, but acceptable.

April

ADC Telecommunications. It's a telecom company. Enough said.

However: This was also the month that featured Mayor Rudolph Giuliani and Governor George Pataki. Together. Perhaps the possibility of a political dogfight turned on restless investors, and the market posted a 74-point gain on the day.

March

When a company sends an e-mail to 38,000 of its employees and tells them not to come to work for a week, that might be a sign that no one from that company should be ringing any bells. (The e-mail was sent in April, but Nasdaq executives should have seen it coming.) Nonetheless, a honcho from humiliated server-maker Sun Microsystems did just that on March 20. The result? A 107-point drop.

But: The first quarter turned out to be bleak overall, so kudos to Nasdaq for trying to seek some divine intervention. We are speaking of Father Joseph O'Hare, Fordham University's president, who rang the bell on March 19. And for the day, at least, a higher force prevailed: The Nasdaq went up 50 points.

February

Ameritrade? Ameritrade!? By February 2001, the term day trader commanded about as much admiration as O.J. or Condit (or Michael Jackson , for that matter). Yet on Feb. 28, an Ameritrade executive rang the bell. Perhaps it was meant as a public service–full disclosure?

In contrast, it was definitely a good idea to have Wick Simmons, newly appointed to the Nasdaq post, open trading on Feb. 1. In a weak economy, it's important to show strong leadership skills.

So here's what the Smiths are going to do: take over the city with Outback Steakhouses, a Tampa, Fla.-based chain of Australian-themed steak joints that up until now have been content to keep their wild success–700 restaurants have opened in slightly more than 10 years–well within suburban limits. The Smiths already have locations in Queens and Brooklyn, and estimate they will open another 20 to 25 in the coming years, many of those in Manhattan. They know New York mouths are famously fickle and averse to national trends, but they're convinced that once we get a taste of the $18.99 Rockhampton Rib Eye and the chain's claim to fame, a deep-fried item called the Bloomin' Onion, we'll never want to go back to Smith & Wollensky or Sparks.

Cockamamie? Perhaps. But don't tell the Smiths that.

"Prime is prime ," said Mr. Smith. "We serve prime . It's like the gold standard; it's either 24 karat or it's not. And we have the same 24 karats that they do."

By they , he was referring to New York's more well-known steakhouses.

"They're like Rolexes," he went on. "That's just a name; the watch really doesn't work that well. I'll take my Timex Ironman triathlete watch that I wore for years and years and cost $34. And if you're talking about steak, when you look at Crisella's or Ben Benson's or Sparks or the Palm–prime is prime , and I don't see them coming out three times and asking, 'Are you sure it's cooked right?'"

Mr. Smith was sitting with his wife in a booth in the Outback Steakhouse in Bayside, Queens, close to Nassau County. It felt like the kind of dark, noisy pub you might find anywhere in Queens, but with koala bears and boomerangs on the walls. A steady stream of more-obscure-than-average 1980's music favorites–think Men Without Hats and A-ha–regaled the diners, who seemed to be enjoying themselves. It was barely 6 p.m., and already there was a squeeze for tables.

The couple was trying to convince The Observer to order a Wallaby Darned, a frozen drink the menu says consists of vodka, peaches, peach schnapps, champagne and "secret mixers."

"You've got to try it–you'll love it," Mr. Smith said. "I'm having one."

Mr. Smith is a powerfully built but rather languid 56-year-old man with a curved nose–"I never got into a hockey fight that I won," he said–and a striking resemblance to John McCain. When it comes to such things as the restaurant business and jet-skiing (currently his favorite sport), he speaks with the Arizona Senator's fervency and a slightly certifiable glint in the eye. But he speaks very slowly. Imagine Mr. McCain on barbiturates.

"We are serious about food here," he said. "Nothing is frozen, pre-prepared or packaged."

"Everything on that entire menu is made from scratch, except for two things," Mrs. Smith chimed in. "We don't make the butter and we don't make the ice cream."

"We have people that make the butter and ice cream for us," Mr. Smith said.

"But there's no need to tell anybody that," Mr. Smith went on. "Because once they sit down and eat it, they know there's a difference. They don't know what the difference is, but they know . Now I'm going out on a limb a little bit, because if the Bloomin' Onion shows up here and it's not terrific, I'm not going to look too good."

He paused.

"But I've never had that experience."

Mr. Smith's dress was almost disconcertingly casual–khakis and an un-ironed gray polo shirt with a green T-shirt underneath. Mrs. Smith, a former model, wore a simple cream blouse and pearls.

Allison, the waitress, brought the Wallaby Darneds. They were tasty. A plastic shot glass of what tasted like chilled Southern Comfort with peach schnapps hung off the side of the mug. Mrs. Smith got a Shirley Temple, in a frozen beer mug.

Mrs. Smith ordered Aussie-Tizers, as they're called on the menu (that's copyrighted): "The Bloomin' Onion, of course … the Gold Coast Coconut Shrimp and Shrimp on the Barbie. And the Kookaburra Wings." ("Kookaburra Wings" is copyrighted, too.)

What is it about New Yorkers that makes them like steak so much?

"I think it's a power food," Mrs. Smith said. "We [New Yorkers] are known for being good, solid eaters. We like to express our power in all kinds of ways, and food is one of them."

Mr. Smith disagreed.

"I don't think there's anything about steak that's special to New York," he said.

So what makes them think that Outback is going to take off here?

"We have a far greater younger population than we've ever had in Manhattan," Mrs. Smith said. "Most young people now are running from their business to the gym and to other activities, and they eat on a more casual basis …. People already have very complicated lives; they don't want their food to be complicated, too."

And what about the continent of Australia? Does it hold any special meaning for them?

"I personally am enormously fond of Australia and Australians," said Mrs. Smith. "Australians are fairly straightforward people who love good food and love to be happy. It's a very happy and up kind of place, and our restaurants are happy, up places."

Mr. Smith feels differently.

"Now that I've been there, I've lost half of my fascination," he said. "Australia has the top 10 most poisonous snakes in the world. There are plants that can do it, there are spiders that can do it. I don't want those problems. And I'm also a little uncomfortable with the treatment of the Aborigines, which is no better than what we did with the Native Americans. I'd always thought of it as super-American, but everyone's unionized. Even the limousine drivers are unionized there. Not that I have anything against unions …. But I love all the animals."

Allison brought the Aussie-Tizers. The portions were enormous, and greasy. The Bloomin' Onion and Gold Coast Coconut Shrimp were tasty. The wings were bland.

Mr. and Mrs. Smith know the names of almost all 120 or so of their employees. One gets the feeling that if they had 20 restaurants, they'd know the names of all 800 employees.

That day, Allison had gone with a bunch of the waiters and managers to Splish and Splash, a water park in Riverhead, N.Y. Such group activities are common. The Smiths sometimes have the "kids," as he refers to the Outback staff, up to their summer home on the Finger Lakes, where he teaches them how to jet-ski.

He pulled out a little album of photographs from the trip. Most of them were of his jet-skis, sitting in a garage. He points to a photograph of one of the jet-ski's motors.

"You see how clean that is?" he asks. "That's what I want my kitchen staff to see: I keep my jet-skis like you should keep your kitchen equipment."

While picking at the shrimp, Mr. Smith said that he grew up in Ithaca, N.Y. His father, a colonel in the Air Force who'd served in World War II and Korea and later became a commercial pilot, went to work at the Ithaca Gun Company started by his grandfather. Forrest Smith never went to college. At 17, he joined a band–variously called the Emotions, the Fascinations and, finally, the Agency–in which he played the Hammond B-3 organ. Valerie Simpson of Ashford and Simpson wrote some of their songs, he said, and Herbie Hancock did their A&R.

"The nicest guy you'd ever want to meet," he said.

Mr. Smith stayed in the band for seven years, and then became disenchanted with the industry and looked for a day job. He was attracted to the fast-food restaurant business. He started as a fry cook at a Kentucky Fried Chicken in Ithaca and worked his way up to regional vice president. Then he left to join McDonald's and eventually, with a partner, owned seven franchises in Manhattan. When the partnership broke up, he held onto four of the Manhattan franchises, which he's since sold–including one at 1560 Broadway that Mr. Smith claims became, under his watch, the most lucrative McDonald's in the world. He also claims that the Bayside, Queens, Outback has broken sales records for a new location in its first year in business.

Mr. Smith was in the news once: In 1994, he mounted a giant, glowing inflatable chicken on the roof of his McDonald's at 56th Street and Eighth Avenue to announce that it would be serving fried chicken.

Mrs. Smith grew up in Honolulu, Hong Kong, Switzerland and Southern California, where her father was an owner in Don the Beachcombers, a chain of restaurants that was popular for a while. She moved to New York and became a model, landing on the cover of Town and Country and New York and doing a lot of work for the designer Arnold Scaasi. She married Jonathan Farkas, a Broadway producer and heir to the Alexanders department-store fortune (Liz Smith called that match "unhappy" and "tumultuous" in an item about her subsequent marriage to Mr. Smith), and became a fixture in the society pages. She hung around with late-80's boldface names like Ivana Trump and Mai Hallingby.

Mr. and Mrs. Smith, who have four children between them and live in Greenwich, Conn., were set up on a blind date in September 1991. They married the next year.

Allison brought the meat, and it was tender, cooked well–no Peter Luger, but what do you want for $20? Mrs. Smith ordered the rack of lamb, which was huge. She dug in with gusto. Mr. Smith had his wrapped up before touching it.

"I can't talk and eat," he said.

In the mid-1990's, after more then 10 years as a McDonald's owner, Mr. Smith decided it was time to move on to another level of the "hospitality industry." But what?

"I was at a loss," he said, his face suddenly forlorn.

He went to meet with Norman Brinker, who's now an old friend and guru of sorts. He is known among people who know about such things as "the father of American casual dining," having founded Steak & Ale, Bennigan's and Chili's, among other chains. Mr. Smith alludes to him often, in reverent and slightly hushed tones, as though he's speaking of some religious figure. (The only other name he regards with as much awe is Peter Luger, which he thinks has "taken steak to another level." By his own estimate, he's eaten there about 140 times.)

"Norman is one of the foremost, prolific people in the feeding of masses of people, but doing it well. He's right there with Colonel Sanders–whom I worked with–and Ray Kroc [the late founder of McDonald's]. Norman Brinker was third in lineage, but he was as good as it gets.

"I asked Norman, 'What is the future of food in America?'" Mr. Smith continued. "And Norman said, 'People want to sit down and relax. They want to be casual, but not dirty.'"

Mr. Brinker helped put him in contact with Chris Sullivan, the chief executive of Outback, whom Mr. Smith refers to as "maybe the fourth person" in the Sanders-Kroc-Brinker lineage. After investigating chain after chain, Mr. Smith decided on Outback.

Allison came back to ask how the steak was. Everybody responded, "Great."

The chain was conceived in 1987, in Tampa, Fla. Mr. Sullivan and his partners, who had worked for Mr. Brinker for years, were wealthy but looking for ways to augment their incomes–as Mr. Smith tells it, so they could play at better golf courses. They knew they wanted to stay in steak. They just needed a new twist.

Before going to a jazz club that night, Mr. Smith said, the two men and their wives had gone to see Crocodile Dundee , the smash hit that introduced a young Paul Hogan to America. They decided that Australia was the next big thing. Ten years later, Outback had nearly 400 restaurants.

"Who knows what the place would have looked like if they'd been to see a Stanley Kubrick movie," Mr. Smith said.

Mr. Smith wanted in, and he wanted New York. None of Mr. Brinker's "concepts," however, had been tried here–for good reason. Rents are high, and tastes change quickly. Outback had made its name in suburban strip malls, serving cheap wine and not that much liquor–the real bread-and-butter of New York restaurants–and was closed during lunch. But Mr. Smith was convinced he could do it.

The first interview he had at Outback headquarters in Tampa, he recalled, he showed up in a jacket and tie, and Mr. Sullivan's secretary told him to take it off. Things were casual there. "And she said if it happened again, they'd cut if off!" he said. That's when Mr. and Mrs. Smith knew they'd come to the right place.

Once in Mr. Sullivan's office, he produced his "good-guy list"–a résumé of his philanthropic efforts–as requested by the Outback brass, he said. Mr. Smith had been chairman of the Ronald McDonald House and the Ronald McDonald Children's Charity of New York.

"That's about as impressive a good-guy list as I've seen," Mr. Sullivan said to him. But then, Mr. Smith recalled, Mr. Sullivan pulled out Mrs. Smith's good-guy list, which she'd sent earlier. He hit the table with his Filofax. "Except for this one!" Mr. Sullivan said. So, said Mr. Smith, "I went to the first meeting as the spouse of the new Outback franchisee."

Mr. Smith admitted that he bought into the Outback corporate ideology immediately.

"The first thing they asked me is, 'Do you want to have fun?' Nobody had ever asked me that before. You must have fun. And, 'Are you learning? Do you know something you didn't know before?'

"I was part of Brinker's cult, but now I'm even more a part of the cult of Sullivan and [Sullivan's partner]."

Allison came back to ask how the steak was, again.

"Are you sure?" she asked.

To explain the cult further, Mr. Smith made her stay for a moment. "Do you have your cards?" he asked her. She handed him four plastic, wallet-sized cards.

"Many companies have letters," he said. "The Army has–what is it called?–AWOL. Well, we have letters here, too."

He produced a card with the letters H, S, Q, F and C listed vertically. He asked Allison to list the five principles.

"Hospitality, Service, Quality, Fun and Courage," she said, without batting an eye.

Mr. Smith wouldn't allow The Observer to write down the contents of the other cards. He did allow Allison to explain the 15 or so pins and brooches that hung from her red Outback polo shirt. Among others, there was the Aboriginal Medal–with a picture of a kangaroo on it–awarded for working there for more than a year. She also had a Boomerang Pin with "1500" printed on it, which meant that she's sold more than $1,500 worth of food in one night.

Aside from its success, Outback and Chris Sullivan have also made news in Florida because of the chain's political activities. Outback has a powerful, right-leaning political-action committee to which managers, and sometimes employees, are encouraged to give. The P.A.C. was investigated, then reprimanded by the Federal Election Commission in 2000 for its excessive involvement in the 1994 Congressional campaign of Republican Mark Sharpe. It is also one of the sponsors of a think tank called the Employment Policies Institute, which has lobbied against raising the minimum wage and improving worker-safety standards in the restaurant industry. During the Clinton administration, Mr. Sullivan told a reporter from the St. Petersburg Times that he had "a passion for one thing–getting Bill Clinton out of office."

Mr. Smith said that he and his wife donate to the P.A.C., but claimed to know nothing about the Employment Policies Institute. "That's corporate policy," he said. "I can only speak about our policy."

He bristled at what seemed to be a disparagement of Mr. Sullivan.

"Chris Sullivan is one of the most people-oriented people around," he said. "He's the last person who would do anything to prevent anyone from making more money. He's–"

Mr. Smith paused, considering his next statement carefully. He lowered his voice.

"He hates it when I say this, but I'd say he may be the next Norman Brinker. And you've never heard anybody say anything about Norman Brinker except, 'I wish I could live up to the standards he lives up to.'"

The Bayside Outback has been open for nearly two years. Mr. Smith said that he's in final negotiations on several locations in Manhattan, including at 180 Riverside Boulevard in Donald Trump's Riverside South development; at the former Michael's Pub spot at 919 Third Avenue; at a new apartment building at 700 Sixth Avenue at 23rd Street; and in the Virgin Megastore building at Union Square. The Trump location, which was to have led the way, was supposed to have opened months ago.

"Kimberly's known Donald and Ivana for years; she introduced us," Mr. Smith said. "Donald didn't get where he is today by not making deals that are good for him. He's looking out for him, and we're looking out for us …. We're in the final stages of negotiations."

Paul Davis, chief executive of Hudson Waterfront Associates (the company that runs Trump Place at Riverside South) confirmed that they're in final negotiations and said the restaurant should open "sometime in the near future."

Mr. Smith said that protracted negotiations and his own meticulous approach–not the current economic climate, or any reluctance on New Yorkers' part towards $18 Australian-themed steak–has caused the delays.

"The current economy is going to help us," he said.

"Originally," he continued, "the landlords didn't understand the type of meal you're eating tonight. They didn't understand the caliber of the restaurant. Now they're coming to us, asking us to open Outbacks in their buildings."

"I think we fill a certain niche in everybody's life," Mrs. Smith said.

If you haven't been called down to Human Resources yet, you're busting your butt until the pigeons start to coo on the merger of two Midwestern egg-crate manufacturers–the biggest deal you've had in months. And your year-end bonus will probably be just big enough to cover the windshield-wiper repairs on that Maserati you bought last year (before the S.E.C. began investigating your boss).

But just when you think all that's left to Wall Street is financial hardship and carnage, you might take consolation in this: Those college kids working on your desk until August are having the time of their lives.

It's that season of the annual summer internship program and, even as Wall Street eats itself alive, banks such as Lehman Brothers, Morgan Stanley and Goldman Sachs are wooing and coddling a fresh crop of hot young things looking to move into your desk.

As in summers past, a new batch of young bucks and buckettes who think they have what it takes has been recruited, briefly trained and plopped down in a nearby cubicle. The only difference is, this summer they're probably getting better treatment than you.

Summer interns who spoke to The Observer painted a collective picture of cushy perks and outings.

"You get to go to the Exchange, to the Fed, and have breakfast with the C.E.O.'s," gushed one bright-eyed subject from Lehman Brothers. "We went for dinner at Commune …. We went bowling and to Laser Tag!"

While perks for junior analysts and associates are being cut–Goldman Sachs no longer serves fresh fruit all day; at Merrill Lynch, late workers now have to wait until 9 p.m. (9 p.m.!) if they want free car service home–the Dave Matthews crowd is being treated with corporate charge accounts, new laptops, rock-climbing expeditions, tickets to Broadway plays and salaries exceeding $1,000 a week.

And there are dinners–lots and lots of dinners.

"They take us out to dinner once a week," said one Deutsche Bank intern matter-of-factly.

"My friend at Goldman Sachs gets lots of dinners on an expense account," said one intern. "If they have a dinner with someone higher up, the intern can invite them out and charge it to the corporate card."

The Deutsche Bank intern was asked what went on at work that day. "We had a scavenger hunt and went all over New York looking for things that were the color red," he said. "I took a picture of the Red Door Salon at Saks and a red bus."

But most of the interns said it's not all beer and skittles. Eleven- and 12-hour days are expected, they said, and many stay even longer doing research and number-crunching.

Asked what they thought of their internships given Wall Street's state, most were quick to point out that they're pulling their weight, and more. One intern, however, did admit that many of his long hours are spent staring at the other people on his desk, who don't seem much busier.

"There's nothing to do," he said.

Naturally, among the Wall Street people who aren't returning to Yale at the end of the summer, there is some resentment.

"There are the overachievers who want to get a job after college," said one analyst. "And then there are the people who got the job through their parents, and who don't really care because they'll be able to get a job after college."

"I don't remember getting that treatment when I was a summer intern," one associate said, "and the times were a lot better. Now I have to ask an intern to take me out."

Schrager's Hudson Hotel Full of Real Heels

Sometime last winter, Ian Schrager looked at the cocktail waitresses at his busy Hudson Hotel bar and noticed that some just did not fit the streamlined image he was trying to project. It was their shoes–too clunky, too gauche or just too individual for his taste. What happened to the uniform shoes they'd been assigned?

Mr. Schrager is not New York's hotel king for nothing. He likes uniformity; he's comfortable with control. And he's certain that the details make the difference between a hot hotel and one that offers weekend discounts to married couples advertised on the Metro-North trains. (If, for example, two servers are stationed at the Hudson Library bar, they must either both be wearing sweaters, or both not.)

In February, new uniform shoes were distributed to the female bar employees. And, right away, some noticed a change.

The plastic-soled Aerosoles slingbacks certainly matched the wait staff's black dresses. They were fashionable to boot. But from the first night, some of the waitresses started experiencing pain–cramps, unbearable pains in their legs and feet–particularly after a few hours of balancing 20-pound trays of Cosmopolitans and serving Johnny Blacks to the late-night crowd.

"The people in charge of the look had probably never worked on their feet," said one Hudson waitress. "Maybe they were just tricked by the brand."

That first night some of the waitresses complained, but were told to wear the shoes or lose the job, according to members of the staff. By early spring, some were discussing legal action. At least five filed accident reports with the hotel. Finally, three brought in doctors' notes and were able to work in their own shoes. Some would switch shoes in the middle of a shift, then worry the rest of the night that they'd be caught.

With good reason. In April, an internal memo threatened dismissal of anyone who failed to adhere to Hudson's uniform and shoe policies. Though some low-level supervisors seemed sympathetic, hotel managers were not.

"The general managers thought we were being bratty," said one of the waitresses. "They would scold us, as if we were just being frivolous and needed to break the shoes in. It created such a bad environment for a while."

Finally, with the departure of a particularly tough manager in May, things began to loosen up. And a few weeks later, the big shoe shift was made. Management–and the waitresses–adopted new Naturalizer flats in June.

Kimberly Grayson, Aerosoles' senior vice president of marketing, said she was surprised by the complaints. She said the corporate style the Hudson had ordered had a relatively low return rate, but that the company would take a closer look at the Hudson waitresses' problems.

As for the Hudson, managers now acknowledge the shoe debacle.

"The original shoes that were selected as part of the uniform for cocktail waitresses proved to be uncomfortable to some of the staff, especially considering how busy Hudson Bar is and the wait staff's necessary efforts to keep things running smoothly," a spokesperson said.

"Hudson has found a new pair of shoes as stylish as the pair originally selected, to assure that the wait staff can continue to work efficiently and service all customers."

They probably meant "serve" customers. But at least the wait staff can now do it without hammer toes and shin splits.

–Karen Hudes

Harvard Professor Has Some Rap

To plug new books, some business-school professors go on lecture tours. Others do signings at Barnes & Noble, and still others make outrageous claims or shamelessly praise the big corporations they also advise. And then there's Harvard's Rosabeth Moss Kanter. She raps.

Perhaps worried that the magic of this new Internet thing would not be enough to move copies of her latest work– Evolve!: Succeeding in the Digital Culture of Tomorrow , published this year by Harvard Business School Press–Ms. Kanter, a professor of business administration, went into the studio to condense the message of her book into a two-minute-and-32-second hip-hop track. The weird result is e-volve! , a paean to e-volutionary business administration and community service, set to a drum machine, that she has been performing at corporate retreats and sending out on CD to the untapped market of Powerpoint-and-Lil'-Kim-heads.

"I show this to businesspeople from all over the world, and they love it–they go crazy!" Professor Kanter told The Observer from her home in Cambridge. "And 14-year-olds look at me with greater respect."

She said that e-volve! and its accompanying video are a hit in the business world. The folks at I.B.M. played the CD during the World Economic Forum–and she gets more invitations to conferences than she can accept.

The rap started as a poem. Then it occurred to Ms. Kanter that there was always music on at the Internet start-ups in Silicon Valley where she'd conducted research. Why not put the message of the book to song?

"I picked rap because you don't really have to sing," she said. "[Rap] appealed to me for this because the song is a kind of chant. And because here's a genre that's known to be in the gutter and to advocate misogyny and violence, and I thought, 'Why not take this and turn it to a positive social purpose–reclaim this genre from the gutter and elevate it to something that can inspire?'"

And who wouldn't be inspired by a chorus like this:

Y'all get ready for the next step,

Select the best step.

It's a leap in evolution

From the Internet revolution.

Just pick a direction

In this world of connection.

So many problems to solve–

You've got evolve .

And then there's the rousing final verse:

Why are you silent, has the mouse got your tongue?

Tech talk is what the older folks can learn from the young …

So rally people power, make the world a better place

Because we live on the ground , nobody's from cyberspace.

Professor Kanter said that while she was recording e-volve! , the similarities between the boardroom and the ghetto became clear. "I began to realize that the messages about the culture of business were just as good reaching down into the community. Like the line that says, 'Don't get trapped in old divisions on a patch of tiny turf.' I had very much in mind both the turf battles that go on within corporate bureaucracies and gangs on the street."

"She didn't need much coaching," said Mike Boston, Professor Kanter's collaborator and instructor. "She pretty much had it."

Mr. Boston, 25, works for City Year, a Boston-based mentoring program for inner-city youth on whose board Professor Kanter sits. Mr. Boston met her last summer when he was invited to her house on Martha's Vineyard for a weekend retreat. They hit it off, and Mr. Boston agreed to leave his solo rap career on hold for a few weeks to record e-volve! His own recording, Dramedy , a collection of rather haunting tales about growing up in the inner city, is making the rounds at local Massachusetts radio stations.

The duo also filmed a video for e-volve! Its primitive effects evoke an episode of Yo! MTV Raps circa the heyday of Whodini. (While asking "Why are you silent, has the mouse got your tongue?," a two-tone Professor Kanter thrusts a computer mouse, draped over her shoulders, toward the camera.)

Mr. Boston cited the Wu Tang Clan, Nas and Dr. Dre as his main musical influences. Professor Kanter, however, said she does not have any favorite rappers.

"I listen to some. I turn on the radio."

Does she listen to it more now that she's recorded e-volve! ?

"No. But I'm a big dancer."

–J.V.

Its new 45-story corporate tower at 383 Madison Avenue, set to open in October, is equipped to continue operating even after the lights go out, the water shuts off and the steam stops flowing.

At 1.2 million square feet, it will hold 4,500 Bear Stearns employees–nearly the entire New York work force–with room for 1,500 more. It will be a virtual city within a city, complete with four emergency electrical generators, its own steam turbines (should Con Edison run dry) and tanks that can store 109,000 gallons of emergency water.

And with 8,000 miles of cable, it will be the largest cable station in North America.

"In the event of a total blackout, [we] could go on for days," said Jim Lang, the Bear Stearns senior managing director overseeing the project.

"Actually," he continued, "with the self-replenishing batteries and a water source, we could go indefinitely."

What possessed Bear Stearns to spend $516 million on such a high-tech structure? (That sum includes $275 million for the structure, $76 million for the interior and $165 million for the information technology.)

"We're very concerned about deregulation," said Melvyn Kass, Mr. Lang's partner, referring to the change in regulations that frees power providers like Con Edison from the need to actually generate electricity.

Still, the structure seems an apt symbol for the mood on Wall Street. The dwindling profits, the layoffs, the rescinded offers, the scarce I.P.O.'s and venture capital–it's all about survival right now.

In recent years, most of the big securities firms looked to mergers to strengthen their positions. They brought in new top talent. They tried online brokerages. They opened fancy new Park Avenue day-trading operations to draw in customers.

Bear Stearns did none of those things. Its longtime chief, Alan (Ace) Greenberg, 73, was with the firm since 1949 and only recently stepped aside–not out–to make way for another longtime executive, James Cayne, 67, to serve as chairman of the board.

But Bear Stearns has prepared for the onslaught. It has built in the heart of Manhattan a building fit for even the most paranoid Montana survivalist. One, it hopes, that reflects its scrappy but solid reputation. One in which it can consolidate its New York forces, primarily located now in outdated offices at 245 Park Avenue and a variety of other locations.

Bear Stearns, said T.J. Gottesdiener, the Skidmore, Owens & Merrill architect who oversaw the project, "wanted to solidify their image in New York City as a financial institution, and they wanted the building to be reflective of that. They wanted something that would be strong, powerful, but not ostentatious."

He thinks that's what they got.

"It's not jarringly outlandish," he said. "It's not a lavish building. It fills out the block, it holds the street line, it tapers nicely, it's got a beautiful crown. The stone has a certain solidity to it, and at the same time the glass gives it a light airiness."

Space Age

Indeed, with its light-colored stone slabs and many windows, it doesn't resemble a bunker. Yet the structure, which is still raw inside–the five-month move of Bear Stearns employees won't start for another month–already looks as if it has anchored its block for a long time.

Getting it to that point has been the primary responsibility of Mr. Lang, who, dressed in a plaid work shirt and work boots one recent steamy morning, seemed to have just flown in from some Montana survivalist compound. Tough and sharp, a fast talker with an outer-borough accent, he's worked for the last half-dozen years with Mr. Kass to pull the project together. In the three years since demolition began, he said, his hair has gone from black to gray.

He was taking The Observer up to the fifth floor of the new building, located in the half-block from Vanderbilt to Madison avenues and 46th to 47th streets, in one of the 23 babinga-lined, alabaster-ceilinged, laser-sensor-equipped elevators. "These go 14,000 feet per minute–that's fast," Mr. Lang said.

The elevator zipped past floors three through 11, which together hold a total of eight trading floors. At 44,000 square feet each and with hardly any visual obstructions, these spaces are beyond vast; they are, as Mr. Lang put it, "space age."

They're also the nerve center of the building: It is to the trading floors that 383 Madison's electrical and telecom systems, its obsessive back-up plans, its dozens of data centers and its thousands of miles of cable are geared.

"The lifeblood of a firm like Bear Stearns is their ability to trade and transfer money on a second's notice," said Mr. Gottesdiener, "and to be able to do it 24 hours a day. They are so dependent on having that infrastructure running–for it to ever break down would be catastrophic."

Bear Stearns will have 1,500 traders working in these rooms, with room for a total of 2,400. Each trading floor has 285 positions with two flat-screened terminals and a UPS (uninterruptable power source) connection. The saw-toothed ceilings conceal no-shadow, no-glare ambient light bulbs. Running beneath the raised floors are the miles of cable, placed there (and not above the ceilings, as is customary) for quick repair.

Bear Stearns built a series of mock-up trading floors at the West Side piers, trying to get everything right before putting together the real thing.

But before they even got to that point, the architects and engineers and contractors and contract managers had to figure out how to get it standing.

"The infrastructure needs were incredible," said Mr. Lang.

There was the problem with the foundation. Fully two-thirds of the building's precisely square base (200 by 200 feet) does not sit on solid ground. Rather, it sits above train tracks–two of the busiest MetroNorth lines in the city, in fact, which run north from Grand Central Terminal. Before they could install the two 44,000-square-foot base plates, Mr. Lang said, demolition crews had to "take the track beds out, ship all that stuff out to a special site in Jersey, and then put in new foundation walls between the tracks." This had to be done while allowing at least one of the tracks to remain active.

The complications didn't stop there. To accommodate taller tunnels for new double-decker Long Island Railroad trains, expected soon to run to Grand Central, the Metropolitan Transportation Authority insisted that Bear Stearns dig even deeper foundations. This cut drastically into the building's basement space, forcing it to put much of its electrical and HVAC equipment on the upper floors.

In return, however, Bear Stearns got air rights to build a taller tower–and a connecting walkway to Grand Central for all those managing directors coming in from Greenwich and Bedford. And, anticipating the day when the LIRR runs into Grand Central, it also got a brand-new LIRR stop beneath the building, allowing its employees to zip off for Hamptons weekends.

But the structural conditions spawning those amenities were a headache for Jim McKenna, principal of the project for Turner Construction, the general contractor. In a building with normal underground space, the infrastructure equipment is installed first, allowing the building to rise up above it. But the infrastructure in 383 Madison had to be moved to the upper floors.

That, said Mr. McKenna, "put a lot more pressure on us. Typically, once you've finished the foundations and start the superstructure, the mechanical trades and electricians can get in to install the infrastructure. Here, the infrastructure was up on 10, 11, 12 and 13. So we had to wait to erect the structure to that point and then gear up the mechanicals."

In all, Turner had to hire about 85 subcontractors–a normal project of this size requires about 50–to complete 383 Madison on schedule. At its peak, 1,400 to 1,500 masons, ironworkers, electricians, drywallers, carpenters, pipers, elevator mechanics and any number of specialty finishers worked in shifts around the clock.

Another conundrum lay in the building's frame. The eight-story base of 383 Madison is square, but the 40-story tower is octagonal, a design that conformed to the city's mandates about sunlight and doubled the amount of office space–but tripled the headaches involved in engineering the transference of the building's vast loads. On top of that, Bear insisted that its eight sprawling trading floors, its auditorium and cafeteria contain less pillars than usual.

To figure it all out, Mr. Gottesdiener, the architect, ended up having to retain not one, not two, but three mechanical engineering and design firms. Finally, a three-dimensional computer model was made (at a cost of $80,000). It was adhered to religiously, lest the complex system of ring trusses and abnormally large and narrow base plates, custom-made in Canada, go awry.

Going Public

The restrictions and complications didn't end there. Mr. Gant said that, to attain the air rights Bear Stearns sought so the building could ascend to its 773-foot height and rival its haughty neighbor, the Met Life monolith, Bear had to agree to certain concessions, including devoting much of its ground floor to two 200-foot public walkways that cover the entire foundation.

"We did studies and found that, on busy days, several thousand people pass on those blocks every hour," Mr. Lang said. Consequently, the lobby is immense. Wide pillars stretch up to a 28-foot ceiling, 24-foot-high panes of glass line the base, and the gigantic black concierge desk looks like a lectern in the ponderous space.

Mr. Gant said that Bear Stearns wanted everything just so. No expense was spared. The trim and moldings are a finely finished babinga–there are 10,000 square feet of it in all. The floors are not marble but a more durable composite material that looks like marble called terrazzo (37,000 square feet of that–"More than any building built since the 1960's," according to Mr. McKenna).

The ceilings are made of MDF, a plaster-like fiberglass material that is also more expensive. The 30,000 square feet of granite slabs that cover the walls and pillars were mined in Maine, cut in Rhode Island and assembled in Florida. And then, of course, there are the 18,000 tons of steel in the frame.

But making the building unique is its survivalist ethos–the "guts" that seem geared more to a space station than a Manhattan office building. It contains four emergency generators; the normal office building of this size has, at most, two. The four are capable of delivering 7,500 kilowatts.

The building also has two telecom and three electric closets per floor, stacked atop one another in spines so that any single outage can be compensated for immediately.

The building also holds 109,000 gallons of emergency water (the normal building of this size holds about 15,000), and there's back-up steam power, too. And every room is outfitted with the latest in wireless technology.

"We need a provider like [Con Edison], but we could get along without them," said Mr. Kass.

The building is not layoff-proof (though, so far, Bear Stearns has been largely immune to the mass firings that have hit its trading rivals). Nor will it shield the foolhardy from the kind of bad investments that have left Wall Street as risky as the border between India and Pakistan. But it's ready for New York.

Now, at last, Eastern Europeans would be free to watch the Pocasicko, a news segment featuring the naked weather girl, who puts on or strips off clothing according to the day's forecast.

This was Mr. Lauder's chance: his moment to step out of the shadow of his successful family, to come back from the debacle that was the 1989 New York Mayoral race and establish his own identity.

How it all went wrong was merely hinted at on June 12, when The New York Times reported that Mary Jo White, the U.S. Attorney for the Southern District, was investigating Mr. Lauder's television holding company, Central European Media Enterprises (CME), over allegations that the company had bribed state officials in Ukraine. The story was picked up by the Associated Press, the International Herald Tribune and several news outlets in Central Europe, without elaboration. But the message came across loud and clear: Mr. Lauder's company could be in a mess of trouble.

To people familiar with the heir to the Estée Lauder cosmetics fortune (Clinique, Aramis, Aveda, Origins and the Tommy Hilfiger and Donna Karan scents) and chairman of the Museum of Modern Art, the news came as a shock; that Mr. Lauder even had a television company in Ukraine was little known.

It may have been most shocking of all to Mr. Lauder himself. Officials at CME said they knew nothing about a federal investigation until they read about it in The Times . The company's chief executive, Fred Klinkhammer, claims that neither he nor any of his employees or predecessors have been contacted by Ms. White's office. As for the subpoenas and the empaneling of a grand jury, as reported in The Times , Mr. Klinkhammer said that he was never notified. (He added that he was never contacted by The Times , either.) The attorney for Mr. Lauder and CME said he has not been informed of an investigation, either. Ms. White's office refused to comment.

The Times reporter, Raymond Bonner, stood by his story. But, he added, "if this is the case, and the documents support the allegations, maybe the story is: Why is the U.S. Attorney not issuing more subpoenas?"

If an investigation is underway, it is certainly not the first time that Mr. Lauder's activities in Central Europe have caused legal controversy. Nor is it the first time that the controversy has been shrouded in ambiguity. Since its inception in 1995, CME, its partners and its associates have been entangled in a dark Gordian knot of court proceedings from New York to London to Kiev, fighting off lawsuits, bringing suits and being accused of ties to corrupt government officials and organized crime.

A federal investigation would not even represent CME's most pressing legal matter: The company has a $500 million lawsuit against the Czech government awaiting judgment in London and, in a related case, is owed $27 million by a former partner known in his native land as the Czech Ted Turner.

Ironically, if CME is under U.S. investigation, it may be for claims very similar to those it brought against the defendants in those two suits.

But even if all of CME's legal troubles were miraculously to go away, it may be too late for the company. CME's stock, once on the Nasdaq, now only trades over the counter, at about $2 per share. Mr. Lauder boasted that the company would be worth billions; it now has a market capitalization of $6.6 million. Standard & Poor's no longer covers CME's bonds, because at the end of last year the company defaulted on an $8.5 million bond payment (it subsequently paid it). And to cover debts, Mr. Lauder has had to sell his television stations in Hungary and Poland, the latter after only 14 months of operation.

Mr. Lauder has tens of millions of Estée Lauder money, and more than $100 million from banks, sunk into the ailing company. And the lone prospective white knight on the horizon–plus the $615 million it had promised to bring with a buyout–pulled out some time ago, for fear of CME's litigious proclivities.

Marveling at the glacial pace at which the company's grievances are being resolved, CME's officers can do little more than shake their heads in frustration. "The Czech Republic is a dangerous place to do business," was Mr. Klinkhammer's bemused and final statement on that country.

Mr. Lauder, 57, declined to be interviewed.

The story of CME begins in Hungary, where it all started for the Lauder family. Mr. Lauder's mother, Estée Lauder, a Hungarian Jewish immigrant, had begun selling homemade hand creams at a pharmacy in Queens after World War II and, over the course of several decades, parlayed that into a beauty-products empire. Mr. Lauder's older brother, Leonard, had assumed the helm of the company when their father, Joseph, died in 1983. Leonard Lauder took it public, making himself and his brother billionaires four times over.

Ronald, however, was not as good with money as he was at acquiring things. By 1991, he'd accumulated a world-class collection of modern European art–he'd made his first purchase at 13, an Egon Schiele, with $10,000 in bar mitzvah money. He'd also conducted a not-very-serious run for Mayor of New York, losing the Republican nomination to Rudolph Giuliani in 1989. ("The big news today is not what Ronald Lauder said at City Hall, but that Ronald Lauder actually found City Hall," Mr. Giuliani's campaign was quoted as saying during the race.)

He'd also gotten himself embroiled in a scandal involving the importation, for an exhibit at the Museum of Modern Art, of Egon Schiele works that may or may not have been stolen from Holocaust victims. All in all, Mr. Lauder was ripe for a win.

That's what he was aiming for when he plunged into business in the former Eastern bloc. He had the perfect pedigree: A generous donor, along with the rest of his family, to Ronald Reagan's campaigns, he'd been rewarded in 1983 with a stint in the Pentagon as Assistant Secretary of Defense for Europe and the Soviet Union. From 1986 to 1987, he served as U.S. Ambassador to Austria (where he famously drew criticism for tooling around with a pack of bodyguards paid for by his protective mother).

The lifelong New Yorker developed a European persona, enhanced by his art connections and that Lauder international patois.

His timing was right: Communism was awkwardly birthing free-market capitalism, regulations were negligible and assets were cheap. With an illustrious but eclectic assortment of partners that included Chicago real-estate magnate Sam Zell, Canadian real-estate legend Albert Reichmann, and supermarket tycoon and Indiana Pacers owner Melvin Simon, Mr. Lauder bought up tracts of real estate and restaurants, parts of banks and brokerage houses in Budapest, and put up a $400 million office complex on the former site of Checkpoint Charlie in East Berlin.

Soon the region's nascent television industry caught his fancy. Mr. Lauder sensed, rightly, that cities like Prague and Budapest were on their way to emulating the free-wheeling investment atmosphere of Moscow–and that their citizens, too, loved American popular culture. All they needed was their own version of Vladimir Gusinsky, the Russian mogul behind MediaMOST.

And that's what Mr. Lauder set out to be. He went from country to country lining up local business partners, whom he needed to secure the state-controlled broadcasting licenses. Like Mr. Gusinsky, he did not know what sort of trouble some of his partners would soon be causing him.

In 1994, CME was formed with Mr. Lauder as non-executive chairman (he holds a good deal of the stock and a majority of the voting power). A year later, TV Nova was up and running in the Czech Republic. By 1996, Mr. Lauder was broadcasting local news, American movies and shows like Melrose Place and The X-Files in Germany, Slovakia, Poland, Slovenia, Hungary, Romania and Ukraine.

Jan Culik, a professor of Central and Eastern European media studies at the University of Glasgow, who has been watching CME since its arrival on the scene, said that Mr. Lauder's and CME's business practices were simple and direct. "They basically came in and said, 'We are from the West–we can do what we want.' These governments are corrupt; the infrastructures are weak."

Professor Culik said that, in the Czech Republic at least, CME and its local face–a well-known Prague entrepreneur named Vladimir Zelezny–went back on their promise to provide content heavy on cultural programming. No sooner did they start the station than they put on sensational news programs, Professor Culik said, including the one with the stripping meteorologist, and tabloid talk shows with names like Taboo –a lot of "soft porn," as Professor Culik put it.

But apparently, that's just what the Czech people wanted. At its height, TV Nova held 70 percent of the Czech Republic's viewing audience on any given night, and the Ukrainian station still brings in 45 percent, according to Mr. Klinkhammer. Mr. Lauder looked like a genius.

Then, in 1996, he was sued by a former partner in Hungary, American businessman Seymour Holtzman, for wrongful termination of their joint venture. Mr. Holtzman alleged that Mr. Lauder had basically forced him out of their partnership in the Central European Development Corporation, the company he'd formed in Hungary in 1989. "He is mean-spirited …. He thinks he's above everyone else," Mr. Holtzman told the Wall Street Journal in 1991. The matter was settled in court for an undisclosed sum. (Mr. Holzman did not return calls from The Observer .)

But the Holzman case was nothing compared with what was to come. In 1997, Perekhid Media, a Western-owned rival in Ukraine, brought a suit against Mr. Lauder and CME in New York, claiming that CME had bribed Ukrainian officials, essentially to snatch from Perekhid a license which the company had obtained in 1993. Mr. Lauder had subsequently started a station there using that license, called Studio 1+1.

Perekhid wanted $750 million in damages. The case was dismissed, refiled a year later in London and dismissed again.

"The first case was thrown out because it was a completely cynical matter to be brought up in New York," said Mr. Klinkhammer, the CME chief, speaking from Ukraine. "And then the second case was thrown out of England because it was a completely cynical matter to be brought up there."

Mr. Klinkhammer called Mr. Lauder's acquisition of the Studio 1+1 license "completely legitimate." He said that if the U.S. Attorney's office is indeed investigating CME, he assumes it was the principals of the now-defunct Perekhid–David Stewart, a Scotsman, and Andy Bain, an American–who made the precipitating complaint. Other sources close to the situation harbor similar suspicions.

Mr. Bain now runs, with Mr. Stewart, an investment firm called Atlantic Group, which operates in republics in the eastern portion of the former Soviet Union, including Ukraine.

The Observer was able to obtain only the complaint portion of the 1997 Perekhid case. The remainder of the court papers are sealed, at CME's request. Mr. Lauder and CME's attorney, John Kiernan of Debevoise & Plimpton, said the seal was requested because Perekhid was using sensitive business documents to conduct a "worldwide smear campaign" against Mr. Lauder and his company. Because of a confidentiality agreement, Messrs. Bain and Stewart could not comment.

The Perekhid case ended favorably for CME, at least for the moment. But Mr. Lauder's biggest headache was still to come.

CME's former partner in the Czech Republic, Vladimir Zelezny, has been called the Czech Ted Turner. But, Mr. Zelezny has an even more flamboyant past than the American media mogul. Mr. Zelezny has been arrested for allegedly smuggling art (he was never charged). He is also infamous for his weekly television talk show broadcast from Prague, Call the Director , on which he openly attacks or sucks up to chosen public figures–sort of a more scandalous O'Reilly Factor . A onetime screenwriter and news producer, Mr. Zelezny was among a group of Czech intellectuals who applied to the state in 1993 for the first privately held broadcasting license.

A radical television journalist in his youth–he once defied official policy to broadcast footage of the 1968 Soviet invasion of Prague–Mr. Zelezny was, by the early 1990's, as eager a capitalist as Mr. Lauder. The two met in 1993 and formed their partnership.

Mr. Zelezny helped to make TV Nova the most-watched television station in the Czech Republic and a $15-million-a-year business. But in April 1999, CME expelled Mr. Zelezny from the fold and filed suit against him, claiming he'd formed a television company of his own, CETV, which, in Mr. Klinkhammer's words, "siphoned off" millions of dollars from CME.

"He was fired . For theft ," said Mr. Klinkhammer.

Mr. Zelezny did not return repeated calls for comment by deadline.

In August 1999, Mr. Zelezny retaliated, buying out Mr. Lauder's other partners and wresting control of TV Nova's broadcasting license. Mr . Zelezny used it to start a second station. Later that month, Mr. Lauder initiated proceedings against the Czech Republic, claiming that it had colluded with Mr. Zelezny to take away his station and demanding $500 million from the Czech government to compensate CME for its drop in market capitalization–precipitated, the firm claimed, by the license transfer to Mr. Zelezny.

In May, arbitration ended in London. Mr. Klinkhammer said that he expects a judgment soon. Mr. Kiernan, CME's lawyer, is not as sanguine. "Any prediction I would make would be wrong," he said, the frustration palpable in his voice.

Mr. Kiernan did get some satisfaction in February, however, when a London court ordered Mr. Zelezny to pay CME $27 million in damages. So far he hasn't paid a cent, and interest is accruing at the rate of $3,000 a day, according to Mr. Kiernan.

At this point, however, the money is only part of the enmity between Mr. Zelezny and CME.

"He wanted to become the czar of the Czech Republic," Mr. Klinkhammer told the Prague Tribune in 1999. "I think his plan was to control TV Nova and use it as a cash machine, and control Prima TV [Zelezny's station], using it as a propaganda ministry to drive himself into the No. 1 office in the country. I think this should be the Czech people's worst nightmare."

Mr. Lauder's case against the Czech government, and even more so the one against Mr. Zelezny, have been the source of headlines in Central Europe and London for two years. Professor Culik said that during that time, Mr. Zelezny–who wields tremendous power in his native country–has been waging a propaganda war against CME and Mr. Lauder on his weekly television program.

"The Czech courts are very reluctant to act against him," Professor Culik said.

But he added that Mr. Zelezny is just another example of an ongoing problem for CME. He pointed to the "convoluted arrangements between local entrepreneurs and CME.

"CME was absolutely happy about Zelezny until he started rocking the boat," Professor Culik continued. "In the first five years of their partnership, CME didn't mind associating themselves with practices which, in the United States, would have been simply unacceptable." And, he added, "They stupidly allowed Zelezny to buy out the other partners in the license to gain majority control of TV Nova."

Mr. Klinkhammer disagreed with Professor Culik's analysis. He said that, with the exception of Mr. Zelezny, "I think we've been pretty fortunate in finding good business partners."

But even if Mr. Zelezny pays, the most damaging fallout from the TV Nova debacle has already occurred. For a company operating in uncertainty like CME, perhaps the best route–certainly the one that Mr. Lauder, who borrowed heavily from the Estée Lauder company (an estimated $68 million) and J.P. Morgan (an estimated $125 million) to launch CME, seemed to have in mind–was to become big and sell. (Leonard Lauder, perhaps sensing trouble, made the Estée Lauder loan formal, using lawyers on each side. "The idea was to make it an arm's-length borrowing," said Ira Wender, Estée Lauder's broker at the time.)

And sell was precisely what Mr. Lauder thought he could do when the Swedish Broadcasting System–impressed with CME's rapid growth–started knocking on the door in early 1999.

Had SBS bought CME, Mr. Lauder would have proven himself a real businessman. He would no longer have been the dilettante son of Estée Lauder, the less accomplished younger brother of Leonard Lauder. But in September 1999, in the midst of the Zelezny mess, SBS suddenly pulled out. With it went a potential $615 million windfall.

Meanwhile, The New York Times ' June 12 story reported that investigators are reviewing thousands of documents surrounding CME's acquisition in 1996 of a Ukrainian broadcasting license–after a moratorium on the granting of new licenses had been declared. They're also reportedly looking into a payment of $1.4 million that CME made to a suspicious company which, according to documents obtained by The Times , was "indirectly owned by many high Ukrainian officials."

"That's completely false," Mr. Klink-hammer said. "To imply that [the money] was paid to any individuals is just utter nonsense."

The Times also reported that certain business associates and part-owners in Studio 1+1–including one official in the scandal-ridden administration of Ukrainian president Leonid Kuchma–are being investigated or have been investigated by European state agencies or the F.B.I. for offenses ranging from corruption and gold smuggling to ties with the Russian Mafia.

Mr. Klinkhammer denied any knowledge of the investigations of his Ukrainian colleagues.

But other sources think differently.

"[CME] knew exactly whom they were getting into bed with," said one former associate. "They've made a lot of enemies all over Eastern Europe, and all of them keep in touch."

Tavern on the Green wasn't an incongruous enough sight, there were the four

famous New Yorkers, from wildly disparate walks of public life, standing on the

small stage in the restaurant's back room at the event's climax. None of them

knew each other, but all four were wearing red nylon jackets and red berets.

They were, from left to right, Regis Philbin, who, for

reasons nobody quite understood, received a "lifetime achievement" award; Mayor

Rudolph Giuliani, who, for reasons slightly better understood, received the

same honor; Angels founder and radio talk-show host Curtis Sliwa, giving out

the awards; and, finally, Carl Icahn, Wall Street myth-maker, who was the

Angels' Man of the Year.

Mr. Icahn was once one of

the most controversial figures on Wall Street, and still is, even as he rather

quietly approaches the autumn of his career. But the crowd-save perhaps Mr.

Giuliani-was feeling nothing but love for him. Mr. Sliwa called him "a son of

the earth," a smart Jewish kid from Bayswater, Queens, who grew up to "offset

the trade balance with Japan."

Regis Philbin introduced him. "This next guy is a man's

man," he boomed. "He's the toughest trader on Wall Street-a killer! … He's

buying, he's selling, he's coming, he's going, he's doing. He makes the other

guys on Wall Street shudder!"

Mr. Icahn, who recently turned 65 and has not been a trader

for some time, got up and, always the contrarian, insisted that he didn't like

charity events. "Especially when I'm the one being honored," he said.

So why was he at this strange party-standing next to the

onetime federal prosecutor who helped put away so many of his business

associates, no less? Why wasn't he in the office working on a deal (still his

favorite activity) or at home watching one of his Clint Eastwood movies?

Carl Icahn has never

liked to do what other New York billionaires like to do. But he was at Tavern

on the Green for another reason as well, one that can be put into a single

word, a word he repeated at least a half-dozen times that night: privatization .

It has become Mr. Icahn's mantra lately, and not because he

is reminiscing about his days in the hostile-takeover business. He was not

talking about business at all; he was talking about charter schools.

"I think we need to get

education out of the hands of government, away from all the bureaucracy," he

said, without deference to the presence of the Mayor. "A large percentage of

kids aren't graduating; 52 percent of kids aren't passing the Regents [exam].

"We need to privatize it," he concluded, to loud

applause-including the Mayor's.

Mr. Icahn is putting up the money. Earlier this year, the

city approved an application for a charter school sponsored by his Foundation

for Greater Opportunity, and in September, if all goes according to plan, eight

teachers and about 100 students from kindergarten to the second grade will

start classes at the Icahn Charter School in the Morrisania section of the

South Bronx.

Construction of the school building, situated across Brook

Avenue from the Icahn House, a temporary shelter for women and children that

now houses 65 families, is underway. It is costing Mr. Icahn about $3 million.

Costs for the first year of operations will run him about $1 million.

But like everything else about Carl Icahn, this tale has a

slight twist: Mr. Icahn is not just driven by his concern for New York's

children. The man whose high-flying days in the 1980's inspired a number of new

laws is dedicating this stage of his life to working around government

bureaucrats.

"If society is going to be successful," Mr. Icahn said the

day before the Guardian Angels party, speaking in the conference room at Icahn

Associates Corporation, on the 47th floor of the General Motors building at 767

Fifth Avenue, "we've got to have free enterprise in everything. A system of

rewards and motivations. A carrot-and-stick kind of thing."

The Financier

Mr. Icahn's offices are

not what one might expect from the man who begat Gordon Gekko. There is a

Remingtonesque sculpture and some nicely manicured plants. The indices of power

are subtle: a framed stock certificate from the real-estate investment trust

Baird & Warner Mortgage & Realty Investors, his first target, which he

renamed Bayswater Realty & Capital Corporation. A model train car on which

ACF-the rail-car maker he acquired in 1984 for $405 million-is subtly printed.

More impressive are the views of the city, suggesting that

Mr. Icahn can see all, can have all.

And, sure enough, he has. He was the most feared greenmailer

and corporate raider (he's always disliked those terms, preferring to call

himself a "financier") in America, with a list of conquests that has become the

stuff of legend: Phillips Petroleum, Texaco, Viacom, Western Union-and those

are just examples from the end of the alphabet. His perverse love of

proxy-fighting and his pursuit of companies during the 1980's was so omnivorous

that Mr. Icahn seemed not so much a name as a force, the mere mention of which

was enough to make C.E.O.'s quake in their John Loeb's.

He published diatribes in Business Week comparing America to an ailing corporation; he was

the subject of volumes of fierce criticism in newspapers and in minutes of

board meetings. He was, and is, a figure of awesome respect and also

revulsion-for some, the embodiment of the "greed is good" culture of Wall

Street; for others, a revolutionary icon. He made billions of dollars for

himself and for shareholders, but his motives and his effect on

corporations-did he want to whip them into shape by excising the "fraternities"

of management, or sap them?-will always be debated.

But in 1992 Trans World Airlines, which Mr. Icahn had taken

over and tried unsuccessfully to manage for several years, went bankrupt. Since

then, he has been largely out of the spotlight, quietly cutting deals, shorting

Internet stocks like Priceline.com, and occasionally coming up for air to make

not-very-hostile runs at such dogs as Nabisco and, ironically enough, G.M. In

April he made a short-lived bid for VISX, an optical-surgery-equipment maker.

He lives with his wife of two years, Gail Golden, in a

duplex at the Museum Tower and at an estate in East Hampton. He also has

residences in Florida and Las Vegas. He loves gambling: horses, card games,

sporting events, Monopoly-but especially poker. He bought his first stocks 40

years ago with a few thousand dollars he won in the Army and today is worth an

estimated $4.5 billion, according to Forbes

magazine. ("I don't want to discuss that," he told The Observer .)

At well over six feet, he is a towering man even when he

slouches, and he resembles Mel Brooks. He's funny, too, and has a child's

capacity for spontaneous glee.

Sitting in his office dressed in a yellow Oxford and wrinkly

blue blazer, he often looks out of the window while he's talking, as if he's

still amazed by how high up he is. But his thoughts are in the Bronx.

"Most of these places start on a shoestring budget, so they

are almost doomed to failure," he said. "But we can put up the money."

Because both the public

and the government are still wary of charter schools as an alternative to

public education, Mr. Icahn thinks it's up to people like him to get them going

as not-for-profit companies. Foundations need to embrace them, not just to fund

grants, he said. "If they understood how good charter schools could be, I think

they would get into them. But they're expensive."

Mr. Icahn became interested in starting his own charter

school years ago, he said, but couldn't act on it until 1998, when Governor

George Pataki (whom Mr. Icahn calls a friend) pushed the legislation through.

Since then, specialists and assistants have been planning the school's

curriculum, which will be based on the "core knowledge" ideas of the education

theorist E.D. Hirsch, and a battery of lawyers has been going through the

tedious process of bureaucratic approvals.

"It will be rigorous," said Julie Goodyear, who is in charge

of the Icahn Charter School project. "We feel that kids need more knowledge to

be prepared to enter the marketplace."

Mr. Icahn said that the most significant obstacle he

encountered was buying the land on Brook Avenue. The city told him it would

take two years. He threatened to publish an Op-Ed piece in The New York Times . In a matter of months, he had his deed. While

the teachers' union predictably opposed it, Mayor Giuliani and Governor Pataki

both expressed their support, he said.

But Mr. Icahn believes that it is always a struggle dealing

with government. He and Ms. Golden (for a long time, the assistant who directed

his charitable efforts) recalled the reaction of city officials when they

proposed to build temporary shelters like Icahn House. "They said they didn't

need it," said Mr. Icahn, baffled.

"Families were living in

these awful residential hotels," said Ms. Golden, a pretty, affable woman who

matches Mr. Icahn for wisecracks and has no qualms about ribbing him (he takes

it and seems to like it). "Kids were stepping over crack dealers on their way to

school in the morning, and they said they didn't need it! Then they put a

moratorium on temporary housing."

"We need less bureaucracy in everything ," Mr. Icahn said, magnifying his signature complaint

about the corporate world. He has been screaming about bureaucracy for decades,

and he uses the word about as frequently as he does "privatization." "We live

with some almost socialistic systems. Not many people realize that … socialism

doesn't work."

Besides schools, he'd

like to see other areas of government privatized. "The Reagan years helped a

lot," he said. "And so did Monica Lewinsky, ironically, by keeping the

government from doing too much."

So would the world be better off if more corporate

types-those, like him, who eschew the omnipresence of government- went into

politics? More Michael Bloombergs? "I like that he's running for Mayor-but

that's not an official endorsement," Mr. Icahn said. He added that he's only

met Mr. Bloomberg once.

"Jon Corzine and I are friends. We argue about government,

but I think that he would agree with me on education." (Mr. Corzine does, in

fact, support charter schools.)

Mr. Icahn says he has no

political ambitions of his own. That's not surprising, given his view of

government. He was scrutinized by regulators for years, though he was never

accused of wrongdoing-unlike his colleague Michael Milken, who is still waiting

for that Presidential pardon to come through. But legislation passed in the

early 1990's made hostile takeovers of the sort he used to practice impossible.

Mr. Icahn is doing fewer

business deals these days and devoting more time to philanthropy. He doesn't go

about it like Mr. Bloomberg or Henry Kravis, donating generously to everything

under the sun and becoming a fixture on boards and at parties like the one at

Tavern on the Green.

"It's a bit of a chore," Mr. Icahn said of the charity

circuit. "They ask you to buy a couple of tables, and then you go and are

supposed to make small talk for three or four hours. I'd rather read a good

book or watch a movie and pay more not to go." And if they happen to be

honoring him? "You get up and everybody applauds you, and you say, 'What the

hell did I do?'"

So has there always been a heart of gold under the tough

exterior, as Mr. Icahn's friends and colleagues maintain? Or is this just

another gimmick perpetrated by a lifelong con artist, like his critics contend?

If it's a gimmick, it's

costing him. Mr. Icahn does not raise money; he only spends his own, through

his four charitable foundations. It probably has more to do with Mr. Icahn's

nature than his charitable impulses: An only child and fiercely independent

man, he famously hates having partners. Stories abound about colleagues he's

cut out of deals and friendships dissolved in rough competition.

Right now, though, he

said he's thinking about poor children. In the late 1980's he founded the

Children's Rescue Fund, which operates the Icahn House, with the goal of aiding

abused children. He also has the Carl C. Icahn Foundation and the Foundation

for Greater Opportunity, which, in addition to funding the Icahn Charter

School, sends about 20 adolescents a year to Choate academy in Connecticut. Mr.

Icahn's son Brett, who just graduated from Princeton, and his daughter

Michelle, still a college student, attended high school there.

On the speaking circuit, Mr. Icahn can be blunt and funny.

One-on-one, he can be warm or distant. But his eyes light up when he's talking

about children.

"We send kids from Indian

reservations, from the slums of Chicago," Mr. Icahn said of the Choate program,

as though amazed that he-the man who made $500 million taking on Texaco and

$600 million taking on Nabisco-could pull such transactions off.

What about the glory of it all? "I think they just put the

banner that says 'Icahn Science Center' up when they know I'm coming to visit,"

he said of the renovated science building at Choate. (Fittingly, the building

used to be called the Mellon Science Center.)

In 1999, he gave $20

million to Princeton University, from which he graduated in 1957 with a degree

in philosophy (after his mother, a school teacher in Queens, told him that

studying economics would be a waste of her money). The money is for a genomics

laboratory; he is also giving Mt. Sinai Hospital $10 million for a genetics

lab.

By his own admission, Mr.

Icahn prefers to pay for, but stay out of, the operations of his eponymous

foundations. "I don't believe in micromanaging," he said. He leaves that up to

a handful of trusted assistants, including Ms. Golden, whom he married in 1999

after a protracted (six years) divorce from his wife of 20 years, Liba, the

mother of his children. (She told the press that Mr. Icahn had treated her like

one of the companies he went after.) Ms. Golden, with whom Mr. Icahn has lived

since 1993, also has two grown children.

Mr. Icahn claims that he has no plans to retire, and that

doing deals still turns him on as much as ever. But, he said, these days "I

like to spend time with my family, and with Gail."

"I think I qualify as family," Ms. Golden snapped back.

And he has his friends. "I have an eclectic group of

friends," Mr. Icahn said.

" Very eclectic,"

Ms. Golden added.

Although he claims not to chair the rich men's club, he

counts among his friends Sam Waxell, an investor, producer and general man

about town, and Leon Black, the former Drexel Burnham Lambert banker.

Then there's the charity

and speaking circuit, which seems to be drawing him more and more. He might say

he dislikes public events, especially charity dinners, but that was difficult

to tell at Tavern on the Green on June 7. He had the people at his table

roaring-when he wasn't milling about and squeezing palms, talking it up with

everyone around him (although he and Mayor Giuliani did not greet one another

when the Mayor arrived during the first course) and posing for pictures with

what seemed to be every last Guardian Angel.

"We need to support the Curtises of the world," he said,

referring to Mr. Sliwa. And he used that word again: privatization .

His son, an English major

just out of school, was sitting between his father and a lovely blonde who was

lavishing attention on him. Any advice for him, Mr. Icahn?

"I just tell him, 'Whatever you do, work hard. Don't be a

lazy rich man's son.'"

There was Pearl Harbor: too violent, maybe, for the repeat viewings of that crucial audience, teenage girls; also, its high cost and appeal to the Japanese, the largest foreign market, are iffy.

There was Shrek: "A couple of weeks ago, I was talking to Jeffrey Katzenberg," Mr. Dixon said, "and I said to him, 'Jeffrey, how do you think Shrek is going to open?' And he said, 'I don't have a clue.'"

There was A Knight's Tale. "I saw the picture three weeks before it opened, and I walked out of the theater and said, 'This one is really odd-it could work.'"

And there was Moulin Rouge: "This one's going to be over the top!" he said. He happened to be walking up 54th Street, in sight of the marquee at the Ziegfeld Theater, where the hyped period musical was to open, in limited distribution, the next day (in deference to Pearl Harbor, its studio, 20th Century Fox, had pulled its punches and decided to wait until June 1 to open widely). His eyes lit up. Moulin Rouge, he said, like A Knight's Tale, "was one of those oddballs that just might work."

Or not, as the Memorial Day receipts showed. Pearl Harbor did $75.1 million, short of the $100 million many had projected for it; Shrek, at $54.2 million, managed to beat its opening weekend, and has grossed more than $110 million to date; The Mummy Returns, weeks out of the box, did a respectable $19.1 million; and A Knight's Tale, sinking quickly, did $9.3 million.

All of which goes to show that predicting film hits-particularly in the pressurized atmosphere surrounding Memorial Day weekend-may very well be the ultimate fool's game.

Yet Mr. Dixon makes his living reading the tarot cards on the movies. The head of UBS Warburg's Media Equity Research Group, Mr. Dixon recommends stocks based on the financial prospects of films and the companies that make them. Also among his responsibilities: network and cable television, software and publishing concerns-a total of 160 companies constituting $1.2 trillion in market capitalization, which are monitored by 35 analysts under his supervision.

Along with Jessica Reif-Cohen at Merrill Lynch and the independent David Londoner, Mr. Dixon is one of a handful of oft-quoted Wall Street media analysts who wield market-moving influence, whose favor is curried by media executives-and whose opinions on the film industry are especially in demand in the weeks around Memorial Day, one of two sweeps-like periods (the other being the stretch between Thanksgiving and Christmas) that make or break studios for the year.

It's a high-stakes version of Pick the Oscars-with a lot more to consider than whether an actress had the performance of her career or whether the special effects were transporting. Mr. Dixon not only has to find the hits; he has to find the ones that are going to affect a studio's and its parent company's bottom line and maybe put its stock on the move.

There's no formula. "When a studio is making a movie," said Mr. Dixon, "they are basically committing dollars today for a product which will be sold in a very short window two years from now. Anybody who tells you that they have a clue as to how a movie that they're putting $50 million in the next week is going to open in Memorial Day 2003 is lying." He let out a quick laugh-snort, as he often does, to emphasize his point.

In other words, he said, speaking of Shrek: "As an analyst, I don't know any better than Jeffrey Katzenberg how his movie's going to do."

But once it's out, he can issue the recommendation: buy or sell.

Mr. Dixon has been recommending AOL Time Warner for the long term. Its subsidiary company, Warner Brothers, has one potential blockbuster this summer-Steven Spielberg's A.I.-but at Christmas it will release the Harry Potter film, while AOL Time Warner's New Line Cinema will release the first of its Lord of the Ring trilogy. Short-term, he likes Universal because of one word: Mummy. He's not so hot on Sony, which he says "continues to not have the breakout exposure" it needs, or on Disney, which he thinks lacks direction (and Pearl Harbor, despite its boffo weekend, is fraught with overseas perils and has to recoup enormously to cover its high costs).

But he knows he could be wrong. In 1998, he recommended Disney, partly based on his expectations for the animated feature Mulan, which he thought was perfectly positioned to clean up. It didn't, and Disney stock that year was down 10 percent, partly because it lacked a blockbuster.

Two years later, after seeing How the Grinch Stole Christmas in pre-release, he cooled on Universal Pictures. But it turned out to be the highest-grossing film of the year.

Which just goes to show there's a lot more to this game than being a film critic. Still, Mr. Dixon is highly regarded among the handful of analysts who cover his turf. Other media analysts told The Observer that Mr. Dixon is among the most well- regarded when it comes to the film industry-although one, comparing him to Merrill's Jessica Reif-Cohen, said, "There's a big difference in quality between Dixon and Jessica. It's like comparing Yale to the University of Alaska."

More important, though, is his standing with institutional investors themselves, the people buying his research: He's been on Institutional Investor's list of top analysts 8 of the last 12 years.

Grab a Tentpole

Mr. Dixon, 53, was sitting in the UBS office, discussing how he does what he does. He was wearing a tie with floating Mickey Mouse body parts, but he discounted its signifigance. Gruff but affable, he keeps steering the conversation to sweeping discourses on the film industry. He saw it all coming, he said, punctuating his points with that laugh-snort, sometimes even underscoring them with an excited "Okay?"

His influence has been enormous, if he does say so himself.

"I was one of the first analysts to talk about the fact that the entertainment industry was a real business," he asserted. "That it was not just made up of a lot of guys in gold chains, hanging out in Hollywood lots, and that entertainment was the No. 1 source of U.S. export dollars."

Later: "I was one of the first analysts to talk about how it was inevitable that the industry would consolidate to become truly global."

And after that: "I was one of the first analysts to take a look and say, 'Wow, I can develop the Walt Disney Company's entire business model with Lotus on my laptop.'"

Given the stakes-that studios are increasingly cost-and-profit centers for large multimedia corporations-Wall Street and the studios themselves want to know what Mr. Dixon thinks. So he studies each studio's financial history, its strategies, its strengths and weaknesses and its balance sheets, down to the last dollar. He builds and runs detailed models, reads the most obscure trade publications, consults with everyone from Mr. Katzenberg at DreamWorks SKG to Ron Meyer at Universal, and finally says what he thinks the stock is worth. (And in a splurge of self-promotion, on Monday mornings he sends out a fax to 1,400 Wall Street and Hollywood recipients, comparing the weekend's box-office receipts to those of the previous year and making predictions for the coming week. He's the only big-name media analyst who does this.)

Besides the lucre in this-Mr. Dixon would not say how much he earns, but his counterparts are said to make anywhere from $2 million to $5 million a year-he gets to indulge in his first love, movies. Mr. Dixon, who is married and lives in Manhattan, was born in Switzerland, raised in Montreal and moved to Connecticut as a teenager. He studied English at the University of Pennsylvania, then spent the first 18 years of his work life as a producer and director-beginning as a freelance assistant on the Martin Scorsese–edited 1970 film Woodstock-making short films for everyone from Chevrolet to the New York Shakespeare Festival, directing the "Bloodhound Gang" segments on the PBS children's program 3-2-1 Contact, and finally ending up as a film editor for commercials (including the "Thanks, I needed that!" campaign for Mennen Skin Bracer Aftershave).

A lot of what he learned back in his pre-analyst days now gets factored into his recommendations, he said. For instance, Mr. Dixon recalled seeing The Cable Guy a few years ago. The film was expected to be a summer smash for Columbia Pictures, and another notch on the belt for Jim Carrey. But Mr. Dixon knew within minutes that, in the annals of bad-moviedom, it was going to end right up there with Ishtar.

"The lighting was terrible!" he declared. "You can't have that many shadows in a comedy. Nobody wants to see that."

In 1987, Mr. Dixon decided to go back to school. He enrolled at New York University's Stern School of Business, and when he emerged two years later, at the age of 38, he went directly to work for Kidder Peabody as a media analyst. Mr. Dixon made a name for himself there-in part working with NBC, which was owned, as was Kidder Peabody, by General Electric-and in 1991 moved to PaineWebber, which was bought by UBS Warburg last year.

Mr. Dixon said that he tracks films-and their studios-according to three categories: tentpoles, generics and oddballs. Out of the 20 or so films each studio releases every year, most have at best two or three tentpoles-the potential moneymakers that cost anywhere from $75 million to $150 million to produce and are put out during those crucial Christmas and early-summer periods.

This summer's tentpoles include Pearl Harbor (Disney), Tomb Raider (Paramount), A.I. (Warner Bros. and DreamWorks) and Planet of the Apes (Fox).

With tentpoles, Mr. Dixon explains, it's a winner-take-all scenario. If a big-budget film opens strongly-a $30 million opening weekend or more, and a healthy second weekend with a drop-off of less than 40 percent-the studios will keep it alive in theaters through ongoing promotion. That's when Mr. Dixon grabs his calculator to assess the effect on the studio.

Shrek, for example, which opened on May 18 and grossed $42 million in its first weekend, is typical of tentpoles, he said: "If a picture has a $50 million opening weekend, and makes $30 million its second weekend, then I can extrapolate that it will generate $85 [million] to $90 million overall in the U.S. theatrical release. Given what we've seen at this studio, the $90 million will translate to $45 million in domestic film rental, or D.F.R., and will generate a total of four times that in all its distribution platforms. So I'm looking at a picture that will generate $180 million over its life, which includes domestic and international theatrical release, video and DVD, cable and television, and licensing."

"At the end of the day, the real value of a movie to a company is the ability to re-release that movie, as Warner Bros. does regularly with Casablanca [his all-time favorite film], and generate incremental cash flows," Mr. Dixon continued. "Disney is going to make more money off the re-release of Snow White on DVD than it will off of Pearl Harbor."

And as for the highly vaunted opening-weekend receipts: "For a picture to take on the characteristics of an E.T. or a Titanic, it's all about the repeat business. You have to get the kids to say, 'I want to go back and see it again.'"

Tentpoles cost the most and provide the highest visibility, but studios also rely on what Mr. Dixon calls generics: less expensive films with a specific audience that are expected to bring in $40 million to $50 million in domestic box-office receipts, and $80 million to $100 million over their lives. Examples are Clint Eastwood or Adam Sandler movies, which bank on actors with dependable followings, and modish fare such as American Pie (the mode being teens, sex and scatological humor).

Then there are the oddballs: relatively inexpensive films that usually disappear unnoticed, but occasionally find a market and take off. "It's the oddballs that can make a studio," Mr. Dixon said, citing two famous examples: Sex, Lies and Videotape, which put Miramax, its U.S. distributor, on the map, and The Blair Witch Project, which made Artisan. "The oddballs I find most interesting," Mr. Dixon said-which explains his hopes for Moulin Rouge and A Knight's Tale.

Hits and Misses

In the end, though, it's hard to tell how a film will do. Occasionally, he said, "you'll see a picture that's just abysmal and you know it's going to fail"-like the Geena Davis pirate picture Cutthroat Island (1995), which he called "one of the great turkeys of all time."

But usually, Mr. Dixon admits, you just don't know. "If I were to offer you a $30 million stake in a film," he asked, "which involved animation and live action, had either Steven Spielberg or George Lucas producing it, and either Universal or Disney [to] release it, would you take it?"

Of course, he's told.

"Great," he said. "You just put $30 million into Howard the Duck. And if you turned to me and said, 'No, I don't want to do it'-well, you just missed Roger Rabbit. There's no difference in the elements."

All of these concerns make Mr. Dixon's life harder, and discussing Pearl Harbor puts him in a critical mood. He loves movies, but in the day when even subway clerks can recite a film's opening-weekend gross, something is wrong.

"People now go to see movies based on how much money it grossed last weekend," he laments. "What I'd like to see happen is a return to those happy days in the 40's, when people went to movies based on stories and how wonderful they may or may not have been."

That's the movie fan in him talking-not the businessman.

Just ask anyone who was present at the Tomorrow's Children's Fund Investment Conference in the late afternoon on Wednesday, May 9, where the legendary arbitrageur and raider slayed the crowd in the Grand Hyatt ballroom. A few hundred suits had gathered there to pick up stock tips from a marquee lineup of speakers that included, in addition to Mr. Icahn, John Meriwether, James Cramer and Henry Blodget–all of whom had some funny things to say (notwithstanding Mr. Cramer's completely sincere announcement that he planned to invest more of his own money in TheStreet.com).

But it was Mr. Icahn who spoke last, and best, cutting through all of the chirpy advice and desperate evocations of a coming rebound with anecdotes of corporate America's and Wall Street's stupidity. He has been plying that schtick for years, true–but never, it seemed, with such hilarity and improvisational brio. He was at once brash and self-effacing, studied and spontaneous–like a seasoned stand-up comic.

He arrived late, with cameramen from CNNfn on his tail, and slowly made his way to the stage, where he just began talking, off the cuff, without so much as a cue card.

"I'm not gonna tell you this stock is great, that one's great," he said, after which a few people hastily left the room. "I'm gonna talk a little bit about the economy, and about myself."

He spent about a minute on the economy and then got to himself–which is what everybody wanted to hear about, anyway.

He told the story of his early years in the market: He'd made a pile playing poker in college, invested it, did well for a while until he became a broker, then lost his shirt buying stocks that he chose by eavesdropping on the older brokers–stocks they were pushing but wouldn't themselves touch, it turned out, with a 10-foot pole.

Then the billionaire who likes to refer to himself as a "shareholder activist" went off on bankers: "I think the investment bankers are to blame [for the economy]," he said and, after a few seconds of awkward chuckles–many of these people were investment bankers, after all–added: "I don't have to be nice to them anymore; they don't raise money for me, even when I want them to." The place rocked with surprised laughter.

Before long, the man who took on TWA and Texaco was on one of his favorite subjects, management: "The corporate manager is the guy who used to be president of the fraternity. He's a good guy, you like having a drink with him, but …. "

The chief executive, he declared, is always afraid for his job, so "he's gonna make sure the No. 2 guy is dumber than him. And he makes sure the guy under him is dumber. Eventually, you're gonna end up with a bunch of morons." The room exploded. "In fact, we're not too far from that right now."

He dug into boards: "The first thing you do when you go to a board meeting–I've been on a couple of boards, but they don't invite me to too many anymore–the first thing you do is get an envelope with your check for 5,000 bucks …. Then you look at charts that nobody understands. The C.E.O. looks at them; he doesn't understand them. The C.F.O. looks; he doesn't understand them …. Then you get some more checks, and everybody says, 'Isn't this great?'"

After getting solid laughs for a good 20 minutes, Mr. Icahn concluded the set by telling everybody why he shorted Priceline from the get-go–a guy he knows who owns supermarkets told him that he bought his groceries from the ailing online bidding company because Priceline was dumb enough to subsidize the difference between his prices and theirs–and why he's still shorting Conseco: They drag homeless guys off the street and offer them secondary mortgages.

Mr. Icahn absolutely killed.

He was so good, in fact, that The Observer called a number of stand-up comedy clubs to see if they'd be interested in booking him. But the responses were mixed.

"We might give him like five or six minutes," said Peter Shapiro, a booker for Gotham Comedy Club. "Let me talk to my partner about it. Call me on Tuesday." (Mr. Shapiro admitted, though, that he's been wary of such spectacle acts ever since he booked Abe Hirschfeld, who bombed.)

"Does he want to do that?" asked Lucien, a booker for Comic Strip Live. "We put on lots of strange people, but he would have to prepare something that would be appropriate."

Lucien worried that Mr. Icahn's stories about his early career might not be right for his club's crowd. "We tend to have the kinds of guys in the audience who would be laborers for TWA, but not that many top-line executives …. You have to try to imagine how his comments would play to the stewardesses, or to the guys who clean the planes."

Probably the least interested was Jerry, the general manager of Stand-Up New York. "We do have amateur shows," he said.

Mr. Icahn did not return The Observer 's calls–nor, as far as we know, did he follow up on any of the comedy clubs' offers.

This Will Really Suck Them In!

The rantings and musings of Jim Cramer are no longer gratis at TheStreet.com. No, now that he has hung up his trader's spikes, those who want the full force of Mr. Cramer's inside chatter have to become subscribers to RealMoney.com–the paid subscription component of TheStreet.com–for a $199.95 annual fee.

While RealMoney.com does boast a subscriber list of 75,000, it is still something of a slog to get readers to pay up. Yet the need couldn't be more pressing: TheStreet's stock trades at $1.90, and big investors like Paul Allen may be selling down their stakes.

Like all other Web-based news providers, the company needs cash. Quick. So what to do?

Market.

"Become a RealMoney member and get a discount on Jim Cramer's 'The Great CEOs Series' videos!" screams one e-mail pitch ($79.99, a $20 saving for Real Money subscribers!). "Go to the Las Vegas Money Show, May 14 to May 17, and hear Jim Cramer and others for FREE!" shouts another. "Enter a drawing for a private lunch with editor in chief Dave Kansas!"

Wait a minute. Lunch with Dave Kansas? Yup, just fill out a RealMoney readership-profile survey and presto!–into the hat goes your name. And get this: If you win, Mr. Kansas will fly out to you, wherever you might be, for the special repast.

A Jim Cramer video for $80 we might understand. Ditto for the Las Vegas Money Show. But lunch with Dave Kansas? No disrespect to the 34-year-old Mr. Kansas, a well-regarded former Wall Street Journal reporter who's been running the editorial show at TheStreet since its inception, but as a lunch partner–well, he's not quite Graydon Carter, or The Journal 's Paul Steiger, for that matter.

The taciturn Minnesota native keeps a decidedly lower profile than the rambunctious Mr. Cramer, not to mention other media types around town. Nevertheless, TheStreet.com's readers seem more than happy to have a bite with him.

"Ouch. I can see you are going to have fun with this," Mr. Kansas said, laughing, when asked about his desirability as a lunchtime companion. "But our readership is curious about the inner workings of the company," he continued. "Are they thrilled? Well, I think they find it interesting. My Q rating with the readers is higher than that outside the readership base."

Mr. Kansas, indeed, does what he can to keep up his profile with TheStreet.com's readers. He writes a letter to readers once a week, and he has also co-written a how-to book with Mr. Cramer about investing in the Internet era that's been well-received. So far, he's done a small number of lunches–meeting recently, for example, with a lucky options trader from Chicago.

"Would our readers rather have a chance to eat lunch with Jim Cramer? Sure, and we have done that," Mr. Kansas said. "It's pretty standard marketing fare."

–Landon Thomas Jr.

If You Thought That Was Desperate Marketing …

It's tough to relaunch a 1961 seafoam-green curvilinear midtown hotel in the midst of an economic wobble, in a city whose tourism-happy Mayor is decidedly distracted, where crime just might be in again and where the Hudson's Ian Shrager throws foie gras in his mac 'n' cheese. Just ask Michael Lyman, the director of sales and marketing for the Metropolitan Hotel, formerly the Loews New York, a hotel designed in 1961 by Florida architect Morris Lapidus.

Long an eyesore on 51st Street and Lexington Avenue, the Metropolitan is now revamping with hipper rooms ("not scary hip," Mr. Lyman emphasized) and a bevy of promotional packages and gimmicks which say a lot about the fevered brains of Manhattan's hoteliers struggling to get and keep their beds filled.

The Metropolitan has decided that puns are fun in its updated Tech Den, its first-floor Internet café, which will serve "Tech Bytes" like "Virtual Veggies" with "Digital Dip" and a "You've Got Cheese Burger." The hotel's restaurant, the Lexington Avenue Grill, has instituted an "I Will Survive" room-service menu for late-night partiers, which features "The Morning After Anything Scrambled" and "'In Case Yours No Longer Works' Liver." All items are served with a side of aspirin.

Then there are the recent promotions, all of which have been dreamed up by Mr. Lyman in conjunction with Quinn & Company public relations. The Name Change deal, which celebrated the hotel's changeover, offered a free weekend night to anyone who legally changed his or her name (marriage and divorce don't count). According to Mr. Lyman, this deal was "too successful," resulting in 100 freshly monikered visitors from around the country sleeping for free.

The Metropolitan next launched, on Valentine's Day, an "Ultimate Proposal Package." For $13,000, a nervous groom-to-be can get a deluxe room for one night, two dozen roses, some strawberries and a bottle of Dom, candles, music, lingerie, silk sheets, a (gulp!) camera, a $30 phone voucher to spread the news and a $10,000 voucher for a diamond engagement ring "of the groom's choice." If the bride says no, the $10,000 gets exchanged for an "all-out tropical getaway to help the rejected recover." (The press mentions neither hookers nor booze.) So far, no one has signed up for the proposal package.

Mr. Lyman has higher hopes for the distressing "Pink-Slip Pick-Me-Up." This deal, launched in March, is designed "for those feeling the economic slow-down first hand." Prospective customers must show proof that they got canned sometime after Nov. 1. Then they get a special room rate (remember, if you changed your name, your room was free) , half off the hotel's signature Metropolitan cocktail, the "Sexy Lexy," and a list of headhunters.

Isn't there a fear of crowding out giddy, almost-engaged couples with drunken, unemployed dot-commers anxious for a high floor with big windows to throw themselves out? Mr. Lyman laughed and said, "Well, after the first drink, they have to pay." He admitted that this program, too, has not had any takers.

There's no word yet on the success of the "Privileged Paws" frequent-stay program for pets. Depending on how long your Schnauzer plans to bunk in the penthouse, this deal may include a free meal from the "Pet Room Service Menu," a complimentary bowl of fluoride-enriched Dog Water, an Emre pet collar (currently available at Bendel!), a day at Biscuits and Bath ("New York's finest pet spa and day care center"), an hour session with Alice Woo (pet psychic, natch) and, lest we forget, a "letter from the General Manager's son's hamster."

–Rebecca Traister

Clarification

In the May 7 issue, an article in The Observer ("News Alert! 1,000 Brokers Keep Their Jobs") credited Wall Street Journal reporter Charles Gasparino with breaking the news that Morgan Stanley chief executive Phil Purcell sent an e-mail to clients apologizing for a speech made by former President Bill Clinton at a firm conference. While Mr. Gasparino did break the news that Morgan Stanley's clients were displeased with the firm for inviting the former President to speak on Feb. 5, Philip Shenon of The New York Times published an article on Feb. 11 that first reported Mr. Purcell's actual apology to Morgan Stanley clients.