The best part of this article in my opinion, is the following quote by the reporters: " The deal shows how the credit boom, the Madoff fraud, returns on Wall Street and soaring art prices all fed off each other during the bull market-and collapsed at the same time." In other words, the stunning correlation between all asset classes, which rose smartly together during the boom, made alot of folk very rich, even though it was all a mirage. Unfortunately, everyone has to pay the price for the cleanup.
Wednesday, July 1, 2009
One of the many many leeches who fed off of the Madoff Ponzi scheme, J. Ezra Merkin, was forced to sell $310 million of Mark Rathko and Alberto Giacometti sculptures, potentially offering some payback to his defrauded investors. The sale was announced, curiously, by New York Attorney General Andrew Cuomo, who has sued Mr. Merkin and secured a freeze on his assets. Only in America can someone become rich enough to acquire over $300 million in art by charging fees to funnel money into a fraudulent investment scheme, all while helping to run a finance firm into the ground (Mr. Merkin was also Non-executive Chairman of GMAC.) The Merkins have agreed to place the proceeds of the sale, which only amount to around $192 million after liens and fees have been paid, in escrow while the litigation continues. Even if you aren't a criminal or an art lover, this is a fine example of why it is important to own a boatload of art if you are too lazy to actually manage the money you are entrusted with and simply hand it over to some other guy without performing any due diligence. If it weren't for the art that the Merkins can easily dispense with, maybe they'd have to give up one of their houses, or God forbid, Mrs. Merkins jewels or furs.