Art. You know that fluff stuff that we don't really need and shouldn't bother supporting, because it is sooooo nonessential. No real impact on the economy, no real value.
Yet it seems some people are finding their art collections VERY essential to their cash flow.
Mister Banker, I'll trade you one "DeKooning" for one "Save My Business from Bankrupcy" card.
"With stock portfolios plummeting and the economy tanking, owners of expensive art are increasingly using their collections as collateral to obtain a much-needed infusion of cash. Works by Pablo Picasso, Henri Matisse, Willem de Kooning and Andy Warhol are among the pieces collectors have leveraged in recent months. The Metropolitan Opera put up two famed Marc Chagall murals in its lobby as collateral, and renowned photographer Annie Leibovitz recently borrowed $15 million against her entire collection of images."
The banks and the art-lending firms operate in different ways. The banks treat the art works as collateral and only take possession if the owner defaults on the loan, something that rarely happens. Art Capital issues loans at interest rates ranging from 6 to 16 percent and in most cases takes possession of the art, similar to how a pawn broker would claim an item, keeping the pieces in secured storage vaults until the loan is repaid."
It seems somewhat ironic that a product produced by a segment of the population that has such difficulty finding support to stay alive, nevermind thriving, is what is keeping some people's butts out of the fire. For those who think it is only the paintings by "old masters" that have any value: Jeff Koons "Hanging Heart" sold for $23.6 million in 2007, Damien Hirst's Lullaby Spring sold for about $19.2 million, and Peter Doig’s 1991 painting, White Canoe, sold for $11.3 million.
Hey, anyone want to invest in a painting? You can get 'em cheap, cheap right now then trade it in for a new car in a few years.