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Art Collectors Pawn Masterpieces To Meet Market Rout Margin Calls
Earlier this year, Picasso’s Women of Algiers (Version O), set an auction house record when it sold for $179,365,000, including the house's premium, prompting us to remark that if you were looking for signs of runaway inflation, Christie’s may be a good place to start. We remarked further:
The nearly $200 million price tag for the “riot of colors focused on scantily dressed women” is, according to WSJ, reflective of the work’s “trophy” status which it earned as a result of its “ownership pedigree”. Translated from high-end art world parlance to plain English: for billionaires who have seen their obscene fortunes balloon under monetary policies designed to inflate financial assets at the expense of everything else (including market stability), purchasing art affords the buyer an even greater opportunity to “boast” than hoarding $100 million homes because after all, there a lot of mega mansions, but there’s only one vibrant, multi-hued Picasso riff on a Delacroix, so really, $180 million is a bargain, especially when most of the purchase price will be recouped by S&P 2,500, or SHCOMP 6,000 (depending on the nationality of the unnamed buyer).
Well that was then, and this is now, and after the close of trading in Shanghai and New York on Monday, the SHCOMP was sitting at 3,209 and the S&P was at 1,893, prompting some of the collectors who had so willingly forked over tens and even hundreds of millions for "riots of colors" on canvas were suddenly forced to consider pawning these treasures for cash as the margin calls rolled in.
Here’s Bloomberg with more:
Art dealer Asher Edelman’s vacation in Comporta, Portugal, was interrupted Monday by inquiries from clients as global equities plunged.
Some asked about borrowing against their art collections from Edelman’s art-financing company ArtAssure Ltd. Others wanted to sell works. Everyone was looking for the same thing: liquidity.
“There are many margin calls,” Edelman said in a phone interview, adding that no deals were struck yet.
Boutique lenders said they were unusually busy in late August, when most of the art world is on holiday. Global equities and the art market have become intertwined as art prices have soared and more wealthy buyers view their collections as an investment they can borrow against.
“Ten years ago no one in the art market paid close attention to these corrections in the stock market,” said Elizabeth von Habsburg, managing director of Winston Art Group, an independent art appraisal and advisory firm. “Now clients respond immediately.”
“When liquidity leaves the marketplace people will consider art loans as an option to replace volatile margin securities loans,” said John Arena, senior credit executive for Bank of America’s Private Wealth Management Business. He said his group -- which didn’t see a spike in art loan inquiries Monday -- doesn’t limit its credit exposure to art loans during market turmoil.
Edelman said his clients asked about the borrowing terms against works ranging from Iranian artifacts to Andy Warhol paintings.
And while some clients were content to borrow, others apparently opted for firesales, causing dealers to line up bank financing in order to take advantage of opportunistic prices.
Collectors aren’t the only ones looking for liquidity with art-backed loans. Art Finance Partners, a New York-based firm, was contacted on Monday by dealers looking to borrow money to close private sales.
In one instance, market uncertainty spurred the seller of a painting by Camille Pissaro, with the asking price of about $500,000, to close the transaction with a dealer, who will use a loan to buy the work, said Andrew Rose, president of Art Finance Partners.
With the deadlines to consign art for the November auctions coming up, some collectors have decided to sell works rather than wait.
“Some are pulling the trigger,” Rose said. “People want certainty.”
So it would appear that China, via the pressure its collapsing stock market and currency shocker have put on global equities, has single-handedly reversed the fortunes of the hyperinflating high-end art world as collectors' collective scramble for liquidity is creating a buyer's market and indeed, as one expert told Bloomberg, "hot emerging artists whose prices exploded in the past year [have] recently started to cool off."
In other words, even Picasso isn't immune from exported Chinese deflation.
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This rally has legs as there is a lot of art on the sidelines that will be put to work.
Time to sell my Thomas Kinkade collection.
At least a Picasso is real art instead of that crap they refer to as "Modern Art".
Oh, rest assured that plenty of modern "art" will be going on the block as well...
Are wives "pieces of Art" because i may have to sell mine, or at least rent her out.
At least two of mine (out of three) were pieces of fart. They did NOT count.
What is the rental price? I don't do 'marry' any more.
Isnt the old saying if it flies, floats, or Fu(&s, Rent it!
bundle them and sell the overpriced collateralized loan to the Feds, they are buying all outstanding crap. You won't even have to mark them to market.
Well, I don't know your wife of course, but I would have to say that in general I classify them as rapidly depreciating assets.
FOFOA explains why a balloon dog is worth $50 M.
http://fofoa.blogspot.de/2013/12/eye-for-gold.html
A Picasso isn't modern art? He spent his whole carrer trying to forget his formal education so he could paint like a naive child. That quote of his is the epitomy of decline of western civilization and all modern art is a front for money laundering..see http://mileswmathis.com/launder.pdf
Pablo Picasso was never called an asshole.
- Modern Lovers
In 1500, the ability to create photorealistic art made men so famous that we honor their names to this day: Giotto, DaVinci, Michelangelo, etc. As knowledge spread and paints improved, this skill became more common. By 1900 a photorealist could still earn a comfortable living painting portraits of the rich and famous, but not become famous himself.
So vainglorious artists started making their names by creating something degenerate and disgusting and calling it "art". A urinal signed "R. Mutt". A canvas painted entirely black. A crucifix in a jar of urine. Everything by Picasso. Etc.
I'd rather have a velvet Elvis than shell out a wooden nickle for a Picasso in a shotgun shack.
Guess it's all in the eye of the beholder.
Fugly to me.
The US-originated "Modern Art" scam was setup and financed by the CIA to show that US artists could compete with Soviet artists.
$5! Gimme 5, 5 dolla 5 dolla 5.50, gimme 6, 6 dolla!...
Now that's funny!
"I know I've got some Bob Ross originals I can sell around here somewhere..."
Art is Monets on the sideline?
If fine art is for sale for ready money, can high end condos be far behind? Sometimes, stock market declines last for years.
Lambos, jewelry, wine...yes.
Live by the bullshit and die by the bullshit......
The Fed is not opening a pawnshop for $1 million or more art pieces? After all, the Fed has excelled in channeling money to the rich who made out like bandits as the stock market tripled on Fed QE since 2008
If Picasso only knew!
"Mommy, I don't be like it here in the ghetto no mo"
Fuck it all. Just buy a Beltracchi - nobody can tell the difference to the original.
https://en.wikipedia.org/wiki/Wolfgang_Beltracchi
There are mega tons of human feces but I have Picassso's preserved. And I will put that in an elegant, artistic and tasteful jar for auction. I am sure it will fetch millions if not hudreds of millions.
appears as if you are trying Dump it
I'll take a Van Gogh, and a Matisse with a Degas chaser. Make it a double.
If you are trying to sell in the fall auctions you better have damn nice piece(s) with known provenance because at this point no one wants wants to add last minute junk to the catalogs the were wrapping up before summer leave. As I said after the spring sales, old money is selling right now, if you buy at these prices it's not about getting a return on your investment it's about getting your ass(ets) out of paper (unless you are a fat sheep with an over sized wallet to be sheared by the industry shylocks).
The artwork in my serial killer collector card collection is nice. I wonder how much that would fetch?
On a more serious note, watcb high-end and restored cars, art, and other collectibles over the next 6 months or so. Like someone else posted, there's a lot to burn through before the retards decouple from equities.
Man, I KILL for shit like that...did you manage to get a signed Dahmer?
I've got a closet full of old Magic cards. I looked some of those up and many are worth HUNDREDS. Somehow though I don't think they'll hold their value for too long...better sell them SOON
I knew that franklin mint dinner plate collection would come in handy one day.
Fools and their [fiat] money are soon parted.
Fools and their [fiat] Monet are soon parted.
My brother knows a guy whose brother knows an artist (something like that) doing modern art, semi-absract-figurative and the guy, who was written up in WSJ, doesn't understand how such crap could sell so well (6 figures per ptg), but ppl eat it up. Carpe Diem and Liberalism has won the day in the art field. It's all about the rebellion, Satan's game.
Masterpieces of crap.
I was hoping the art dealer was none other than Jeffrey Loria, the owner of the Miami Marlins and a super-prick. That cunt should have been forced to sell years ago.
Nice that it happened to another tribe member. Fuck'em!
https://en.wikipedia.org/wiki/Asher_Edelman
Thats so Kosher
Yummy
Let them buy & then mabbe the paintings will vanish
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This also means that even the rich have lost trust in dollah
Selling dollah to buy something else - similar to what China is doing