Sunday, September 21, 2008

Market Sharks In Formaldehyde


Art for money's sake

During a most enjoyable dinner last evening, Tyler found himself sandwiched between two market experts.

On his right was an expert in financial markets. Well, a hedge fund manager anyway.

And on his left was an expert in art markets - to wit, a professional artist.

Naturally, the discussion turned to markets. Just why did the financial markets blow up?

The hedge fund manager groaned. "Confidence shot - can't trust anyone - haven't a clue what anything's worth - can't price risk - cash is king - 1930s - God, is there anything left in that bottle?"

Well, maybe it's time to switch into sharks in formaldehyde, suggested Tyler brightly. True, nobody has a clue what they're worth either, but Damien Hirst's Sothebys sale seems to have gone spectacularly well.

"Yes, doesn't it," replied the artist. "Yes, £111m... most successful single artist sale ever! Yes, yes... amazing... absolutely amazing... althoooough..."

Although what?

"Well... it's just that there's a whisper going round that the sale wasn't all it seemed. Some of the major bidders seem to have been people associated with Damien himself... apparently more than half the opening day's successful bids came from his own dealers."

The hedge fund manager looked appalled: "What? What!! You mean he rigged the auction? I'll tell you what! If he did that in the financial markets, he'd go to jail! And they say we're the sharks! God! Is there anything left in that other bottle?"

Tyler frowned. But surely Hirst's associate bidders would have been seriously out of pocket? Wouldn't they have had to pay the auctioneers' commission? 12%?

"Yessss... well... there are all sorts of rumours about Sothebys cutting him a pretty keen deal. I mean Joan Collins went to the auction FFS! It was a media celeb fest - look at all the free publicity they got from the BBC etc. Nobody thinks the commission rates were anything like 12%."

Our hedge fund dining companion looked a tad glazed. "Assshllly. Acccssshllyyy! I've just had a brilliant idea!! If Morgan Shchtanley auctioned all its dodgy debt to Goldmans, and Goldmans auctioned all its dodgy debt to Morgan Shchtanley... hey preshto, problem solved! Everyone can shee theresh a proper market prish! A proper prish! Thish ish brilliant... why hasn't anyone... "

Unfortunately, at that point he sank below table level, so Tyler was unable to hear the rest of what seemed to be an inspired market recovery plan.

PS Our man at the Wharf has spent the week chained to his desk, and sadly seems to have contracted another bout of Nile Shorting Fever gravissimus. But during a brief moment of lucidity earlier today, he urged us to switch the entire family fortune into UltraShort Financials ProShares. Shorting financial stocks is now illegal, but this is a highly leveraged fund that seeks to generate twice the inverse daily performance of the Dow Jones U.S. Financials Index. You know it makes sense.

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