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The Sotheby's trial revealed the art market's unsavoury practices
- wslh 3y agohttps://archive.is/2024.02.05-112410/https://www.economist.com/culture/2024/01/31/the-sothebys-trial-revealed-the-art-markets-unsavoury-practices https://archive.is/2024.02.05-112410/https://www.economist.c...
- BugsJustFindMe 3y agoI have a hard time caring about billionaires paying too much for paintings.
- deleted 3y ago[deleted]
- raziel2p 3y agoI understand this sentiment, but I worry that the people ripping off billionaires aren't exactly giving back to society either. Sometimes I ponder about business opportunities catering to the upper end market, making things ridiculously expensive just to capture the super rich segment, and using the profits for good in society (somehow). Most people/businesses don't operate like this I suppose - they just want a yacht of their own, or to infinitely grow their business.
- guhidalg 3y agoOr we could, you know, just tax them and achieve the same thing.
- raziel2p 3y agoSeems to not be working very well. I already vote socialist, what more can I do?
- saalweachter 3y agoI think the best you're going to do is to start some sort of workers-owned crafting shop that pays well, provides a pension, and has a company culture of doing just absolutely everything possible in house and with minimal automation. Machine the screws that hold the widgets together in house, laminate your own plywood from wood species chosen and grown and milled in house. The idea is to create a ton of good paying jobs that range from artisans and artists to mindless make-work, while creating a lot of cachet for finely crafted items with just absurd price tags.
- iamacyborg 3y agoYou’ve basically described Hermes and Loro Piana.
- pavlov 3y agoThere's a lot of small luxury companies around the world. Watchmakers in Switzerland, champagne houses in France, tailors in England, yacht builders in Finland... Even though the products are expensive, their margins aren't as insane as it might appear because the manual production truly is expensive and the workers are often lifers who are treated very well. A lot of these businesses do end up being absorbed by the big players like LVMH which grew into the most valuable company in Europe through decades of acquisitions. (The company's official name, LVMH Moët Hennessy Louis Vuitton, is itself suggestive of a merger between luxury players in unrelated markets.)
- iamacyborg 3y agoSure but I'm specifically talking about two examples that've done an incredibly good job of vertical integration. I can't think of a Swiss watch company that's operating it's own mines and metalworks, for example, or a British Saville Row tailor that also owns the herds and the looms to make the cloth it then turns into clothing. Both Hermes and Loro Piana on the other hand do this (LP is owned by LVMH).
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- yieldcrv 3y agothat sentiment dissipated for me when I was willing to acknowledge how financial services that are more universally respected are not fundamentally different from “billionaires paying too much for paintings” all markets have the same human behaviors in them, all markets have degrees of opaqueness that get taken advantage of the same way, all markets that have transparency have it in response to the same behaviors, all market participants are subject to a liquidity problem and sustaining a balance that grows faster than the issuance of the currency they use, which brings me to the next point: billionaires saving is worse for your life than billionaires spending. help people spend and your economy grows. this isn’t a trickle down praise, in fact its the opposite, assume it wont magically trickle down to you as motivation to personally help them spend with a 54% markup
- BlueTemplar 3y agoExcluding (super) rich people from society is only going to make things worse for everyone.
- ionwake 3y agoI cant fathom what it would be like to just turn a profit of 10 million on one trade. I mean, you could just give 10% to everyone you care about and their lives would be changed forever. Yeah I know some of you reading this will have much more, but I personally, can't fathom doing it just once, imagine, just for a days work.
- appplication 3y ago$1M would change your life less than you think. It would help provide some cushion but I don’t think there are many actual lifestyle changes that alone would enable. Invest that, at safe withdrawal of 4%, that’s only 40k/year. I live in SF, and making less than $105k/year is considered low income (according to California’s Department of Housing and Community Development). So yeah it’s a nice boost to savings, but you can’t stop working.
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- ionwake 3y agoI dont mean any disrespect, I apprecaite your input, but I thought someone making 6 figures was going to start saying how its not a big deal. Yeah bro, Im not in SF Im in europe, a million would stop someone slaving until death to pay for a house for their children. The average salary here is like 25k For most people, yes even in 1st world countries, outside of FAANG its not about deciding whether or not one would have to continue wageslaving to mantain an SF lifestyle, property and trips to Cancun,
- poulsbohemian 3y ago> The average salary here is like 25k It is in the U.S. too, we just struggle to acknowledge it because then we would also have to start asking hard questions about how Europeans have that average salary but also universal health care, public transportation, and a social safety net.
- deleted 3y ago[deleted]
- kubb 3y agoIt’s a little known fact that IQ is positively correlated with income, but there’s no correlation at all with net wealth. It is to be expected that there will be entire industries that spring up to extract some of that wealth from the less bright wealthy. The art market is one of such industries.
- yieldcrv 3y agoThanks for breaking it down like that
- snthd 3y agohttps://www.ft.com/content/3b1de7dc-368f-4864-bb73-cf4308a61899 https://www.ft.com/content/3b1de7dc-368f-4864-bb73-cf4308a61... >A senior lawyer who works for a private bank in Zurich says that, although egregious, the situation was hardly novel: it is widespread practice in Switzerland that independent wealth managers are given full power of attorney by clients. >“We have clients where, basically, the authorised representatives, their financial advisers, do things like go and buy an expensive watch or whatever, and if we say, ‘No, don’t do that’, we will hear something back asking us why on earth we are making a fuss . . . They say they have given these people these powers, and it’s not up to us to decide what is reasonable or not.”
- PaulHoule 3y agoI always thought the 415 scams were aimed at rich people with poor judgement. I mean, who believes $10 million is going to fall out of the sky and hit them except someone who has already been hit with $10 million falling from the sky? Plus there is a limit for how much money you can scam out of a normal person.
- sumtechguy 3y agoYou can watch some of the scam baiter channels on YT. The scammers are not targeting the very rich (though they would not mind getting in on that). Usually they target retired people who have lost some of their faculties.
- yieldcrv 3y agoprepandemic I used to run in those circles, Monaco, Switzerland OTC commodities dealers the people involved are total jokes they are extremely poor judges of character and endlessly shop deals around WhatsApp groups for dumb reasons people are praised for having been associated with something outside of the domain they are currently in, which is an obvious red herring and red flag, and then get scammed or have a bad deal where the other party cant deliver amicably, as there was nothing to suggest they would? I see the same in the US but it seems like a generational thing only boomers and mormons fall for. Elder abuse, pun intended for the latter but there are real “established” people in these European networks, sometimes, its just such a shitshow. because established means a dynasty of some sort, older than the US itself a lot of the participation is just pride and grasping for autonomy, like the first born son thrust into managing some feudal era family office has no clue what he’s doing, and wants a good trade for once, but it was in some dilapidated mansion on the french riviera that now he needs to get out of before his family finds out, and France starts taxing Monaco citizens that hold property in France. and then the middle men are sourcing these dumb deals because they got screwed once and genuinely want to pay their old partners, at first, chasing gold and markups for the rest of their lives. its wild, I had to go back to tech these people are just dumb and the US markets are just so much more mature in comparison. but yes, you might meet the Saudi prince’s Hand in Monaco and sell him a painting for $450m by far the most interesting part of this story is that Mr Bouvier purchased and took delivery of some art pieces before reselling them, instead of just trying to dropship or connect people. way to go.
- iamacyborg 3y agoThere was a similar lawsuit in the early 00’s (I think, it might have been the late 90’s though) with Sotheby’s caught ripping off clients in a similar way. My family lost a bunch of money on a Canova bust that’s now at the Ashmolean in Oxford.
- vegetablepotpie 3y agoArt done right is a tax dodge by the wealthy. Rich person buys a painting, by an artist, for $50 million and puts it in their collection. Another person buys another painting by the same artist for $75 million. The rich person gets their painting reappraised by an art expert. It is now “estimated” to be worth $75 million. The rich person donates the work to a museum, a non-profit. The donation gives them a $75 million tax write off. The rich person just saved $25 million that would have otherwise been taxed.
- dabber 3y ago> The rich person just saved $25 million that would have otherwise been taxed. In this example, wouldn't it have cost this person $50 million dollars though?
- itsoktocry 3y agoPeople have this idea that there's something magical about "write-offs". In this case the rich person is spending $50 million dollars to save the tax on $75 million? Makes zero sense.
- rufus_foreman 3y agoCosmo Kramer: It's a write-off for them. Jerry: How is it a write-off? Cosmo Kramer: They just write it off. Jerry: Write it off what? Cosmo Kramer: Jerry, all these big companies, they write off everything. Jerry: You don't even know what a write-off is. Cosmo Kramer: Do you? Jerry: No, I don't. Cosmo Kramer: But they do. And they're the ones writing it off.
- itsoktocry 3y ago>The rich person donates the work to a museum, a non-profit. The donation gives them a $75 million tax write off. The rich person just saved $25 million that would have otherwise been taxed. So you're asserting that rich people and appraisers and insurance companies and museums are all conspiring to commit tax fraud?