F-art Lending

From New York magazine: Own a Francis Bacon? We’ll Pay You $$!

One art-world business is booming: collectors looking to borrow against works they own, especially before the fall sales threaten to lower values. “We’ve been contacted by lots of people who are feeling some sort of margin call,” says Sotheby’s CEO, Bill Ruprecht. Other lenders have virtually stopped lending against art recently, but Ruprecht says Sotheby’s is still “very comfortable” doing so. (At 2007’s end, the auction house had $176.4 million loaned out; by the middle of this year, it was $212 million.) Tobias Meyer, who runs the contemporary-art department, says he’s also seeing more “consignment advances”—sellers agreeing to put their art on the block and getting some money up front. But he’s also finding owners disappointed by their holdings’ worth. “Just because we sold a great, rare $80 million Francis Bacon, everyone with a Bacon thinks theirs is worth $40 million,” he says. “It doesn’t work that way.”

Further evidence that the credit flowed into just about every asset class (not that the people reading this needed convincing.)

And the recent art auctions were "disappointing" with 44% not meeting their "reserve price".

To Sotheby's, good luck getting any of that "very comfortable" money back before two decades.

BWAHAHAHHAHAHAHHHHHHHHHHHHHHHHH!!!