Posts Tagged ‘rich’
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Tags: art, conspicuous consumption, Gilded Age, investment, rich, speculation
In the end, about $1.1 billion of contemporary art were purchased during the two-day sale at Christie’s and Sotheby’s.*
Driving their prices higher and higher are a group of ultra-wealthy buyers, who are indulging in a form of gladiatorial combat to win the most glittering trophies. Owning a major Bacon, Freud, Basquiat or Koons immediately sets them apart from other billionaires, giving bragging power as no other possession can. Displaying such a prize in their penthouses, luxury yachts or private museums is the equivalent of hanging a cheque on the wall, asserting that they can afford these multi-million-dollar baubles.
The pool of these mega-wealthy buyers is growing; they come from Asia, the Middle East, Latin America and India, and have entered the fray alongside the more established American and European collector base. The market is now so global that taste has become homogenised: billionaires across the world know who are the top artists and want the same recognisable things – pushing up prices even further. Two Asian bidders, for example, went after the Bacon at Christie’s, one pushing it right up to its final price. . .
But that’s not all:
There is no doubt that investment – and speculation – is also driving this market. With stock exchanges unpredictable and interest rates pathetic, the blue-chip artists are seen as a safe place to park money. As the prices rise, so does the incentive to buy more – and bidding up works by a name already in your collection increases their value even more, which might be really useful if you want to use it as collateral for a loan one day.
Is there financial manipulation going on as well? A small group of dealers and collectors are certainly encouraging this inflation, by giving so-called guarantees on works sent for sale. Under this system, they promise to buy a work of art at a secret price, so ensuring it will sell. If it goes over their bid, then they share in the extra money generated. So the work is sold even before it hits the auction block. The system has become a fearsome weapon in the auction houses’ armoury when they are fighting for consignments: many blame it also for inflating prices. Christie’s sale this month was underpinned by no less than 22 guarantees, some given by outside investors, others by the firm itself.
So at the upper reaches of the market, buying the top names is also a pretty safe bet. Today, the world’s richest people are worth multiple billions, so putting even a sliver of their fortune into art will hardly dent their bank balances – and buying art is a sure-fire entry ticket to what has become a very exclusive, billionaires’ playground.
*Dan Colen’s “Holy Shit” was auctioned at Sotheby’s for $341,000.
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Tags: inequality, poverty, public art, rich, Spain
Señor X, “Sweet Home“
According to two recent studies, Spain is now the most unequal country in Europe.
A report by the Catholic charity Caritas says more than 6% of Spain’s population of 47 million lived on €307 a month or less in 2012, double the proportion in 2008 before Spain was hit by the recession, which has left 26% of its workforce unemployed.
A separate study by Credit Suisse finds that the number of millionaires in Spain rose to 402,000 last year, an increase of 13% on 2011, emphasising the ever-widening gap between rich and poor.
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Tags: chart, crisis, finance, inequality, rich
As expected, a year after the crash, 2009 was a bad year for the 400 richest Americans.
However, as James Stewart explains, that supposedly bad year was actually pretty damn good, especially in comparison to everyone else:
That’s the year that market averages hit their post-financial-crisis lows, and prices of nearly all assets plunged. Since the superrich depend disproportionately on assets, rather than earned income, they suffer more during hard times for financial markets since more of their assets are at risk, or so the theory goes.
Plenty of people did get hit in 2009, including people at the very top. But all things are relative. The fortunate 400 people with the highest adjusted gross incomes still made, on average, $202 million each in 2009, according to Internal Revenue Service data. And this doesn’t even count income that doesn’t show up as adjusted gross income, such as tax-exempt interest.
Yet the top 400 paid an average federal income tax rate of less than 20 percent, far lower than the top rate of 35 percent then in effect.