Wednesday, October 01, 2008

The Capacity of Greed to Breed Idiocy

Consider the lawyer of a thief who, shortly before being shot dead, handed his attorney seven paintings (worth $30m) he had stolen. Isn't the fact that receiving stolen property is a crime among the first lessons of criminal law? More than just that obvious lapse of ethics on his part, though, upon retirement this greedy idiot forgets what he must have heard in a class at one time about the Lost Art Register database (one assumes) and tries to unload the loot. From the Art Newspaper:
In August, a federal jury in Boston found Robert Mardirosian guilty of knowingly possessing stolen goods that had crossed a United States boundary. The 1978 theft from collector Michael Bakwin was the largest home burglary in Massachusetts history. Mardirosian, 72, now faces a maximum sentence of ten years in prison plus three years of supervised release, and a $250,000 fine. The stolen works included Cézanne’s painting Bouilloire et Fruits, 1888-1890.

Mardirosian had secretly held the art in Massachusetts after receiving it shortly after the theft, but in 1988 moved it out of the US and eventually to a Swiss bank.

In his efforts to profit from the paintings, he demanded a finder’s fee of $1m, but kept his possession of the art secret by working in London and Switzerland through lawyers and a Panamanian shell company, Erie International Trading Co (Erie). When he attempted to move the stolen paintings to London for sale, an investigation by the Art Loss Register (ALR), the stolen art database, identified the theft.
Consider what's happening in our financial system at the moment, as well. Is there a single banker out there who doesn't understand that too many risky loans will eventually return to bite you in the ass? Is there even one who managed to graduate from business school and not hear that lecture? And yet, here we frozen around the globe and all because that simplest of lessons was forgotten. Or not forgotten, as much as ignored because all the other bankers were racking in the dough, so why not us too?

Finally, consider what raising prices too quickly for younger artists is likely to do to their markets now. I talked with an artist at an openly recently who said he was glad his dealer had kept his prices reasonable. I got the sense that this was a recent epiphany for him, that had we talked a year ago, he might have expressed frustration that his prices were not as high as those of some of his contemporaries.

Indeed, the word on the street in Chelsea is that big brand name artists are still selling well, and well-priced emerging artists are doing just fine, but that mid-level artists, whose work reached the 6-figure level, are more and more seeing collectors take their time in making purchasing decisions. It has become a buyers' market.

Of course, one of the first things you are taught from other dealers when you begin pricing artwork is that raising prices too quickly is bad for your artists' markets. Gravity will eventually come back to bite you in the ass. The only explanation for ignoring that lesson, quite bluntly, is greed.

Greed is good, they say...until it isn't.

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Anonymous Anonymous said...

The rules apply to everyone else. "I" am special.

This is the mindset of the free market. Which, of course, is not even vaguely free.

10/01/2008 11:51:00 AM  
Anonymous Cedric Casp said...


I mean, these stories of lawyers hand in hand with the mafia abound.
They make me cringe all the time.


10/01/2008 01:24:00 PM  

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