Economics – Page 7 – Abnormal Capitalist

David Zwirner’s Art Empire

Follow-up on Bouvier’s portrait, here’s David Zwirner’s :

By one-thirty, there was no sign of the American collector. Braka and Ortuzar huddled, and Ortuzar said, “I’m on it.” At one-fifty-two, the American appeared and resumed scrutinizing the painting. “Look at him sweating,” Zwirner whispered. After a while, he gave the collector a now-or-never gesture. The man borrowed a chair, sat down, and stared at the Richter for a while, chin in hand. Braka stood ten feet behind him. Soon the American got into what appeared to be a heated discussion with Schouwink. Ortuzar approached Braka, and Braka, with a pained smile, nodded and walked away. Zwirner joined the collector and Schouwink. He spoke emphatically to each of them, slapping the knuckles of one hand against the palm of the other. Everything is negotiable. At two-fourteen, the collector shook Zwirner’s hand and bent to kiss Schouwink’s. The Richter was his, and Zwirner had earned three hundred thousand dollars, enough to cover more than half the cost of the gallery’s booth in Basel.

→ The New Yorker

The Art-World Insider Who Went Too Far

The relationship between art dealer and collector is particular and charged. The dealer is mentor and salesman. He informs his client’s desires while subjecting himself to them at the same time. The collector has money, but he is also vulnerable. Relationships start, prosper, and fail for any number of reasons. It is not always obvious where power lies. Over time, each one can convince himself that he has created the other.

→ The New Yorker

Bowie: The Man Who Sold Royalties and Brought Music to Bonds

Sure, this might be the last thing to come up when remembering Bowie, but hey—that’s genius :

The man behind “The Man Who Sold the World” was the first recording artist to go to Wall Street to tap the future earnings of his music, paving the way for a thriving market for esoteric securities backed by everything from racehorse stud rights to commercial washing machines.

David Bowie, who died from cancer at age 69 on Sunday, sold $55 million of bonds in 1997 that were tied to future royalties from hits including “Ziggy Stardust,” “Space Oddity” and “Changes.” Following his example were singers James Brown and Rod Stewart and the heavy-metal band Iron Maiden. Securities backed by royalties allow artists to raise money without selling the rights to their work or waiting years for payments to trickle in.

“Bowie’s bonds were as groundbreaking as his music,” said Rob Ford, a London-based money manager at TwentyFour Asset Management, which oversees 5.3 billion pounds ($7.7 billion). “Not only were they followed by a number of other artists, but they set the template for deals backed by a whole range of assets.”

And to conclude :

Bowie “changed the way people think about art and commerce,” Pullman said.

See you on Mars.

→ Bloomberg

What I Learned from Losing $200 Million

That was one hell of a trade. Boy, what a wild ride.

The Sunday after Lehman fell, pacing my empty trading floor, I realized once and for all that my models and reports could no longer tell me what to do. The one unmistakable fact was that my risks would increase if oil continued its decline. I decided that when I came in on Monday, I’d place a big bet that WTI would do just that.

And on a Saturday morning bike ride up the Hudson, it occurred to me that Mexico might be willing to restructure its deal—selling us back the option it owned, and buying a new one—in a way that would lock in billions of profits for the country, while giving me a much needed windfall too. I dropped my bike in a bush and texted our salesperson about the idea.

There were many other decisions and guesses, some made alone, others with help from my team, and still others made by my boss. All were guesswork, none could I have anticipated in stress testing, and all involved abandoning my original strategy along with the illusion of control it gave me.

→ Nautilus

Inside Job

A story on Raj Rajaratnam’s inside job and an unsuspected collateral damage:

In my many conversations with Das, I had failed to explain to her what insider trading was, how she ended up a millionaire on paper, and what her employer did in her name. Her sole source of aggrievement was the sum of Rs 8.5 lakh she believed Kumar owed her. Now, I heard her voice on the crackling line fill with hope. “Will he give me the two years’ pay he promised?” she asked. “If he does, that will be very good.” But, after a pause, she added, “If he does not, my life will continue.”

→ Caravan Magazine