Posts Tagged ‘assets’
“O bliss of the collector, bliss of the man of leisure!… Ownership is the most intimate relationship one can have to objects. Not that they come alive in him; it is he who comes alive in them.”*…
Readers may have seen news of the sale of “Gus,” a T. Rex skeleton that fetched a record $50,130,000 at Sotheby’s in New York last Tuesday. It’s part of a trend.
Devon Pendleton reports that dinosaurs have become an asset class for billionaires, with alarming implications for science… and, unsurprisingly, the market is about as orderly and genteel as a starving T. Rex. She uses a different recent sale, one that went pear-shaped, as an example…
It was supposed to be an unprecedented sale for the world’s wealthiest collectors. Shen, a Tyrannosaurus rex, was set to be the first of its kind ever sold at auction in Asia. The reconstructed creature, whose name means “godlike” in Chinese, was tens of millions of years old and longer than a city bus, frozen midstep with its massive skull cocked, jaws agape, as if ready to snatch up an onlooker. Christie’s was auctioning off Shen in November 2022, alongside works by Picasso, and it was expected to sell for $15 million to $25 million.
Dinosaur skeletons had recently become a hot new asset class, coveted by the ultrarich, not unlike sports franchises or Fabergé eggs. They offered a mix of glamour and primal appeal to a certain type of high-net-worth buyer—someone who might find the conventional art market fussy or convoluted but couldn’t deny the allure of a T. rex. “It could gobble you up in one bite. It’s just an amazing creature,” says billionaire Dan O’Dowd, who bought his T. rex, Samson, for a bargain $600,000 in 2009. “It’s the best trophy kind of thing you could own.”
Two years before the Shen auction, Christie’s had sold a T. rex named Stan, said to be one of the most complete and best-preserved specimens ever found, for $31.8 million, trouncing the top-end presale estimate of $8 million. And two years after the Shen auction, financier Ken Griffin spent $44.6 million on a stegosaurus (“a vegetarian,” O’Dowd notes). Leonardo DiCaprio, Nicolas Cage and other celebrities have gotten in on the dino game too.
A dinosaur’s value, like a painting’s or sculpture’s, derives from a protean mix of provenance, desire and authenticity—the last one hard to define, let alone prove, and in the case of an auction, up to the buyer to verify. Christie’s marketing blitz for Shen included the claim that it was one of the most “scientifically studied T. rex skeletons to come to auction,” featuring it in a short promotional video in which the camera cinematically races in for tight shots of its menacing talons and gaping jaw as eerie electronic music pulses in the background. Christie’s made clear that the winning bidder would also get renaming rights, a tradition in which T. rexes in circulation are often given human names.
A month before Shen was supposed to arrive at Christie’s in Hong Kong, it was put on display at Singapore’s Victoria Theatre and Victoria Concert Hall, a stately neoclassical building with a grand clock tower. Families, tourists and prospective buyers in chauffeured Bentleys came to see the T. rex in the flesh, so to speak. But Shen never made it to the auction block…
[Pendleton unpacks the full–and fascinating– tale of Shen. She concludes…]
… In recent years the dinosaur market has gotten only more exuberant. Last year at Sotheby’s a juvenile Ceratosaurus—smaller than a T. rex, but just as carnivorous—sold for $30.5 million, five times its high estimate. Some collectors, including Abu Dhabi’s new natural history museum and German biotech investor Christian Angermayer, are funding teams of bone hunters to scour the fossil-rich western US. Todd Graves, the billionaire behind Raising Cane’s Chicken Fingers, emerged as a collector when he lent his triceratops skull to the Louisiana Art & Science Museum.
And on July 14 in New York, Sotheby’s held what was hyped to be the hottest T. rex auction yet. Gus, as the creature is named, was described as 61% complete by bone count and 75% to 80% by bone mass with “an exceptionally preserved skull.” As the bids climbed, the auctioneer tempted potential buyers. “Try a bigger bite,” she said. “It’s a T. Rex after all.” Gus sold for $50.1 million, the highest ever paid for a dinosaur at auction.
Billionaires and their toys: “The Bone Rush,” gift article from @bloomberg.com.
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As we ponder possession, we might recall that it was on this date in 1983 that a new species of flesh‑eating dinosaur nicknamed “Claws,” later formally named Baryonyx walkeri was announced…
A huge new dinosaur skeleton has been unveiled to the media at the Natural History Museum in London.
Plumber and amateur fossil hunter Bill Walker, 55, found a foot-long claw belonging to the flesh-eating beast at a clay pit in Surrey in January.
When he found the rock containing the talon he tapped it and the whole thing cracked.
Palaeontologists reconstructed it and dated the remains at 125 million years old, describing them as the find of the century…
… Nicknamed Claws, the dinosaur would have been slightly smaller than the Tyrannosaurus Rex – with teeth like steak knives – and was probably a sub-species of the Megalosaurus.
– source
“The whole of the global economy is based on supplying the cravings of two percent of the world’s population”*…
Perhaps that’s an oversimplification; but as a new McKinsey Global Institute study suggests, perhaps not by much…
We have borrowed a page from the corporate world—namely, the balance sheet—to take stock of the underlying health and resilience of the global economy as it begins to rebound from the COVID-19 pandemic. This view from the balance sheet complements more typical approaches based on GDP, capital investment levels, and other measures of economic flows that reflect changes in economic value… [and] provides an in-depth look at the global economy after two decades of financial turbulence and more than ten years of heavy central bank intervention, punctuated by the pandemic.
Across ten countries that account for about 60 percent of global GDP—Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States—the historic link between the growth of net worth and the growth of GDP no longer holds. While economic growth has been tepid over the past two decades in advanced economies, balance sheets and net worth that have long tracked it have tripled in size. This divergence emerged as asset prices rose—but not as a result of 21st-century trends like the growing digitization of the economy.
Rather, in an economy increasingly propelled by intangible assets like software and other intellectual property, a glut of savings has struggled to find investments offering sufficient economic returns and lasting value to investors. These savings have found their way instead into real estate, which in 2020 accounted for two-thirds of net worth. Other fixed assets that can drive economic growth made up only about 20 percent the total. Moreover, asset values are now nearly 50 percent higher than the long-run average relative to income. And for every $1 in net new investment over the past 20 years, overall liabilities have grown by almost $4, of which about $2 is debt…
“The rise and rise of the global balance sheet: How productively are we using our wealth?,” from @McKinsey_MGI
(Image above: source)
* Bill Bryson
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As we recalculate: we might spare a thought for composer, musician, director, and producer Frank “anything played wrong twice in a row is the beginning of an arrangement” Zappa; he died (of pancreatic cancer) on this date in 1993 at age 52.
“Politics is the entertainment branch of industry”
“The bottom line is always money”
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning”*…
In the past few decades, the Gini coefficient—a standard measure of income distribution across population segments—increased within most high-income economies. The United States remains the most unequal high-income economy in the world. The disparity reflects a surge in incomes for the richest population segments, along with sluggish or even falling incomes for the poorest, especially during bad economic times.
At the same time, the middle class is shrinking. The percent of Americans in the middle class has dropped since the 1970s, from 61 percent in 1971 to 51 percent in 2019. Some have moved up the income ladder, but an increasing number are also moving down. The middle class has also shrunk considerably in countries like Germany, Canada, and Sweden, but other advanced economies have generally experienced more modest declines.
From the introduction to the Petersen Institute for International Economics report “How to Fix Economic Inequality?”
Founded by Pete Petersen (Lehman Brothers Chair, Nixon’s Secretary of Commerce, and co-founder, with Trump supporter Stephen Scharzman, of investment giant Blackstone), and overseen by trustees who include Larry Summers, Alan Greenspan, and George Schultz, PIIE is hardly a “progressive” think tank. But they are worried: quite apart from its obvious humanitarian toll, inequality at the scales that have emerged is highly unlikely to be sustainable (even at the human cost that we’ve so far been willing to pay). Put more bluntly, it is ever more likely to torpedo the domestic (and large hunks of the global) economy and indeed to threaten the stability of democratic society.
Other sources suggest that they have very good reason for concern:
• Even as the stock market hits new highs, 26 million Americans are suffering food insecurity (See also: “The boom in US GDP does not match what’s happening to Americans’ wallets.”
• The distribution of assets in the US (and other developed economies, but most egregiously in the U.S.) is even more skewed than income: see data in the PIIE report and “The Asset Economy.”
• And lest we think that this issue is confined to the U.S., social democracies throughout the developed world are feeling the same pressures (albeit mostly less dramatically).
FWIW, your correspondent doesn’t have terrifically strong confidence in the remedies mooted in the PIIE report. Even as the authors recognize that the issues are deeply structural, they confine themselves to recommending (what seem to your correspondent) relatively timid and incremental steps– which, even if taken (and most require legislative or regulatory action) are more likely to slow the polarization underway than to reverse it.
But they are worth contemplating, if only to provoke us to more fundamental measures (e.g., here). And in any case, it’s telling– and one can only hope, encouraging– that determined champions of the very neoliberal economics that have gotten us here recognize, at least, that unless we change course, we’re speeding into a dead end.
* Warren Buffett
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As we agree that fair’s fair, we might recall that it was on this date in 2001 that Enron, once #7 in the Fortune 500, declared bankruptcy. Six months earlier, it’s stock had traded as high as $90; it closed November 30th at 26 cents, wiping out billions in wealth (a appreciable part of it disappearing from employees’ pension plans). At the time, Enron had $63.4 billion in assets, earning it the honor of being the nation’s largest bankruptcy to that date. (It would be surpassed by the WorldCom bankruptcy a year later.)
Jeff Skilling, Enron’s CEO served 11 years in prison on several counts of fraud; Andy Fastow, Enron’s CFO, would served about 5 years. Chairman Ken Lay was also found guilty, but died before his sentencing. Enron’s accounting firm, Arthur Andersen (at the time a leader among the “Big 5”), which at least “missed” the egregious fraudulent practices in their audits of Enron, was effectively forced to dissolve after the scandal.
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