Financial Bubble Hits Photography [Archive] - Large Format Photography Forum

Don7x17

31-Jul-2009, 11:32

Subprime borrowing for prime photos

http://www.nytimes.com/2009/07/31/nyregion/31leibovitz.html?_r=1&ref=nyregion

Recall that other creative artists, particularly in the music field, have lost their works after putting them up as collateral for loans. (eg. M Jackson, who also put up half the rights to Beatles that he owned).

Don't think the bank won't collect/sell both the properties and the photographic rights. And Annie has no rights to prevent...although it appears she's trying

Toyon

31-Jul-2009, 11:56

In good times and bad, some people can't handle money. The same thing happened to Julian Schnabel before the crash.

Michael Alpert

31-Jul-2009, 13:55

This is very sad. No one wants to have their private lives in the courts and in the newspapers. And to be an onlooker with this sort of thing is to be diminished. I really am sorry I read that NYT's article.

IanMazursky

2-Aug-2009, 12:19

That really sucks for her. Everyone who is making that kind of money should have a mandatory competent money manager who knows how to say NO!.
It truly amazes me how the smartest people in the world fall prey to the genius complex. They are at the top in one area but seriously deficient in another i.e. social, monetary, physical....I just hope the courts appoint someone to manage her and settle this without the sale of her images.
It would set a bad precedent for us all.

Jim Michael

2-Aug-2009, 14:31

Even a 'competent money manager' can be wrong and you have no evidence that one was not involved. Statistical models on which most financial planning is based doesn't handle outliers well, q.v. Taleb (http://www.fooledbyrandomness.com/), The Black Swan (http://www.amazon.com/exec/obidos/ASIN/1400063515/nassimtalebsfavo/002-8533486-7104820), although the real estate implosion was in no way unexpected.

Dan Fromm

2-Aug-2009, 14:59

There's an article about Leibowitz in today's (8/2) New York Times. As I read it, it says (a) she created her financial disaster herself and (b) she's in many ways badly out of control. Not a happy-making situation or story.

John Kasaian

2-Aug-2009, 15:51

What I find really amazing is how easy it is to get in the red without having to earn and loose a butt load of money first...

It makes checking in to a Cistercian monastery sound rather attractive!

Richard M. Coda

2-Aug-2009, 17:56

Not that I wish bad on anyone, but she did create this mess herself. If she stuck to photography, maybe we wouldn't be talking about this right now.

Capocheny

2-Aug-2009, 20:48

As unfortunate and sad as it is for Leibowitz (and I certainly feel for her...) many people have fallen into similar situations (though, for most people, on a much smaller scale) due to the crazy economic roller-coaster of today!

Scammers that run off with $50B of clients money don't help matters either. The victims I feel the most sorry for are those who didn't have a lot of money to begin with, and at the end of the day, are now penniless.

The same scammer, BM, also stole from charities whose mandate was to help the neediest members of society and it is these folks who will suffer the most!

I think there are going to be more challenges coming down the turnpike for people of all economic status and walks of life... especially, when inflation kicks in due to bailouts to industry.

Annie, on the other hand, may still have a chance of rebuilding her financial picture because of her talent and other assets. However, some of the above mentioned folks (the elderly, the infirmed, etc have very little chance of rebuilding what they've lost through this thief.

So, Richard's comment is well taken...

[Btw, we also have someone in Eastern Canada who has been accused of absconding $50,000,000 of clients moneys. So, even though it's only a small percentage of the amount BM stole... it still represents a lifetime of saving by some of these investors.]

Cheers

msk2193

2-Aug-2009, 21:16

Not that I wish bad on anyone, but she did create this mess herself. If she stuck to photography, maybe we wouldn't be talking about this right now.

Some of the loans were taken out to pay the IRS on the inheritance taxes she owed from the estate of her partner (but not spouse).

Joseph O'Neil

3-Aug-2009, 07:21

While I do think some people have brought thing down upon their heads, I know just as many people who have had their retirement savings - 401K or RRSPs here in USA/Canada - just devastated by the economy and the recession/depression we are in or heading into.

I was reading a news report a few weeks back of how people lost money indirectly through Bernie Madoff. In short, the financial advisor they used in turn invested with a company associated with Madoff, or in some cases, Madoff hemself, without the original investor knowing any of this.

Lawsuits and / or claims against these financial advisors? Well, you know that old saying "you cannot squeeze blood from a stone"?
I don't pretend to have the answers myself, but a lot of people are hurting, and my fear is, we are yet to see more "Bernie Madoffs" at all sorts of different scales & sizes before this mess bottoms out

joe

Richard M. Coda

3-Aug-2009, 08:24

Some of the loans were taken out to pay the IRS on the inheritance taxes she owed from the estate of her partner (but not spouse).

I know and understand that. But she decided to become a real estate tycoon. She could have sold the properties and concentrated on what she is good at.

SamReeves

3-Aug-2009, 09:26

I like it. The big look down at you photogs get theirs in the end. I never liked Lebowitz at all, so I can't say that I'm sorry. :p

Sylvester Graham

3-Aug-2009, 11:19

Lawsuits and / or claims against these financial advisors? Well, you know that old saying "you cannot squeeze blood from a stone"?

joe

Eh, it's far from this simple. And financial advisors are far from evil, I know because my father is in this line of work. He actually met Bernie, but never ended up doing business with him, thankfully. Though some of the advisors involved with the BM scandal were certainly unscrupulous, none of them were involved. Some may have raised eyebrows, but simply looked the other way when they couldn't figure out how he kept delivering very high yields so consistently (impossible).

-Alex

Mark Sampson

3-Aug-2009, 11:54

Judging from the recent NYT article, Ms. Leibovitz is/was a complete financial incompetent. Not unlike Carleton Watkins, Rembrandt, and no doubt many other creative people (myself?). I hope she can avoid Mr. Watkins' fate, dying penniless in an insane asylum...

Ellis Vener

3-Aug-2009, 18:14

Richard do you mean she should have never bought property?

mikebarger

3-Aug-2009, 18:37

Can't/wouldn't speak for Richard, but it might have helped if she wasn't so heavily leveraged. While bonds and CD's don't pay much, it is a good spot for part of your portfolio to cover bad investments in tough times.

A lot of people who lost their entire savings/retirement may have been over committed in higher risk investments and didn't keep any reserve to protect themselves.

I know quite a few retirees that lost money in this market, but they hadn't put their entire nest egg at risk and are getting along fine.

If you get to the point where one deal goes bad and you can't cover it.... you "may" be to far out on the limb. Moderation can be a good thing when it comes to investing.

Only 2 cents worth.
Mike

Joseph O'Neil

4-Aug-2009, 05:21

Eh, it's far from this simple. And financial advisors are far from evil, I know because my father is in this line of work. He actually met Bernie, but never ended up doing business with him, thankfully.

-snip-
I stand corrected sir, I should not nor did I mean to paint all financial advisors with the same dark brush. Sadly that's all the news seems to be full of lately, at least around my neck of the woods, are guys who cleaned out life savings of the average little person.

I agree too some people brought things squarely on themselves. Traveling in the Keys a few months ago, I heard of many stories first hand of people who bought condos in southern Florida, sometimes sight unseen, with the thought of flipping them later for a profit. Too much greed, and not enough common sense.

Another issue, at least to me, is that the "official" inflation rate, or consumer price index, or whatever different governments call it has been vastly understated. In a "perfect world" interest rates should match the real rate of inflation, so that at the very least, your savings do not loose value over time.

The reality is they do loose value, so IMO, people for the past few years have gone shopping for returns on investment that at least match the real rate of inflation. Think about what kind of investments out there in the past few years appeared to offer a decent rate of return, and IMO, you have one of the many reason we are in the mess we are in right now

joe

William McEwen

4-Aug-2009, 09:04

Some of the loans were taken out to pay the IRS on the inheritance taxes she owed from the estate of her partner (but not spouse).

We've heard that for months, but it turns that it's untrue. Sontag's son said Annie inherited nothing from Sontag.

Michael Alpert

4-Aug-2009, 09:23

I like it. The big look down at you photogs get theirs in the end. I never liked Lebowitz at all, so I can't say that I'm sorry. :p

Sam, why on earth would you want to post this kind of drivel? Even though I don't especially like your photographs, I would be sorry if you were to lose your rights to them. I would be sorry whether your financial troubles were your own fault or not.

William McEwen

4-Aug-2009, 09:37

Sam, why on earth would you want to post this kind of drivel? Even though I don't especially like your photographs, I would be sorry if you were to lose your rights to them. I would be sorry whether your financial troubles were your own fault or not.

It's always interesting to see how posts veer off to other subjects...

But I wanted to agree with you, Michael. I've never understood those who delight in the misfortunes of others.

Sylvester Graham

4-Aug-2009, 10:01

-snip-
Sadly that's all the news seems to be full of lately, at least around my neck of the woods, are guys who cleaned out life savings of the average little person.

Think about what kind of investments out there in the past few years appeared to offer a decent rate of return, and IMO, you have one of the many reason we are in the mess we are in right now

joe

I'm very sorry to hear that. Were these advisors actually running away with their clients money? Or were they losing their client's money? I'm not trying to interrogate, just am interested because I haven't heard of that type of widespread greed and ignorance down here. Just about every firm, no matter how competent, lost a significant percentage on all of their portfolios, in most cases upwards of 30%. No one was safe. I don't pretend to be an authority, and the situation is so complicated few people are. Though the political climate seems to be akin to that in the depression. AKA, fingers are being pointed and thousands of heads are rolling down from the top, not all for a good reason, but quite a few.

Anyway, I would love to talk more, but this is bordering on politics... don't want to get myself deleted. But there are bad eggs in every basket.
Annie probably got sucked into this mess like the rest of us.

William McEwen

4-Aug-2009, 11:27

Annie probably got sucked into this mess like the rest of us.

No evidence of that, at least not according to the thorough NYT article.

She hocked everything she had for $24 million -- and now she's not holding up her part of the deal.

Joseph O'Neil

4-Aug-2009, 11:28

I'm very sorry to hear that. Were these advisors actually running away with their clients money? Or were they losing their client's money? I'm not trying to interrogate, just am interested because I haven't heard of that type of widespread greed and ignorance down here. Just about every firm, no matter how competent, lost a significant percentage on all of their portfolios, in most cases upwards of 30%.

-snip-

There has been 2-3 ponzi type schemes in the news both recently and not too long ago. Likely 99% of financial advisors are doing their best, but boy, the damage that 1% can do is something else.

As for people loosing 30% (or more) of thier portfolios, that seems to be the norm everywhere, doesn't it?

I think though what is happening is that in good times nobody goes asking for thier money, at least not all at once, they are content to let it sit and grow. along come bad times, money is lost, people call in their markers to pay off loans (or just buy groceries in some cases), and this is how these ponzi schemes are coming to light.

Toyon

4-Aug-2009, 12:07

It's always interesting to see how posts veer off to other subjects...

But I wanted to agree with you, Michael. I've never understood those who delight in the misfortunes of others.

Its called schadenfreude:

From Wikipedia:

A New York Times article in 2002 cited a number of scientific studies of schadenfreude, which it defined as "delighting in others' misfortune." Many such studies are based on social comparison theory, the idea that when people around us have bad luck, we look better to ourselves. Other researchers have found that people with low self-esteem are more likely to feel schadenfreude than are people who have high self-esteem.[19]

Brain-scanning studies show that schadenfreude is correlated with envy. Strong feelings of envy activated physical pain nodes in the brain's dorsal anterior cingulate cortex; the brain's reward centers (e.g. the ventral striatum) were activated by news that the people envied had suffered misfortune. The magnitude of the brain's schadenfreude response could even be predicted from the strength of the previous envy response.

PenGun

4-Aug-2009, 12:25

So that's why I'm enjoying this 'Depression of 2008 - 2018' so much.

Perhaps too my inability to understand how a financial system obviously built on greed and crime would survive so well is part of the relief I felt when gravity exerted it's rule.

The US govt has massive debt. MASSIVE!!! The _only_ way out is to crash your money. That is happening. You will be a poor people for probably a decade. Oil will rise and your ability to pay will fall. I could go on for a long time.

zerohedge.com is your friend but is somewhat user hostile. It's complicated. ;)

It's just karma. Everyone gets what they deserve. The trick is to deserve better ... the trick ... it's not a trick.

William McEwen

4-Aug-2009, 13:22

Its called schadenfreude:

[/I]

Achtelieber! Who knew there was a name for this? Verrrrry interesting, Toyon, Danke! :)

noci

4-Aug-2009, 13:28

what's "achtelieber"? Ach Du lieber??

William McEwen

4-Aug-2009, 13:42

what's "achtelieber"? Ach Du lieber??

Perhaps.

I know how to spell Verboten, Achtung, Danke, but I took a stab at that one.:)

noci

4-Aug-2009, 14:07

so now you got another line to peruse. ;P

Sylvester Graham

4-Aug-2009, 14:29

-snip-

There has been 2-3 ponzi type schemes in the news both recently and not too long ago. Likely 99% of financial advisors are doing their best, but boy, the damage that 1% can do is something else.

As for people loosing 30% (or more) of thier portfolios, that seems to be the norm everywhere, doesn't it?

Oh, you mean on the world stage, yes. I thought you meant in your local region, found that hard to believe. There are innumerable schemes going on at any time, it's just that when the economy tanks people want their money back and the plan falls apart and the crooks are exposed.

And yes, 30-40% is about the going rate so I hear, sometimes closer to 50%.

William McEwen

4-Aug-2009, 14:42

so now you got another line to peruse. ;P

It helps to watch a lot of Hogan's Heroes reruns.

iamjanco

4-Aug-2009, 15:12

It helps to watch a lot of Hogan's Heroes reruns.

Typische Ami. :cool:

Joseph O'Neil

4-Aug-2009, 17:57

Oh, you mean on the world stage, yes. I thought you meant in your local region, found that hard to believe. There are innumerable schemes going on at any time, it's just that when the economy tanks people want their money back and the plan falls apart and the crooks are exposed.

And yes, 30-40% is about the going rate so I hear, sometimes closer to 50%.

Well, actually, just in the local news here in Canada in less than just the past week, or even just the last 4-5 days, we have:

- Karl Scheriber just extradited back to Germany from Canada for fraud & more this past weekend - allegations of tens of millions in tax fraud, and bribes;
- Garth Drabinksy to be sentenced this week for fraud - estimated $500 million;
- Earl Jones in Montreal charged with fraud & a possible ponzie scheme- some estimate as high as 100 million missing;
- and just 3 months ago, we had a local guy here in the city charged with $3.4 in fraud, but that only made the local/regional news, not the national news like the other three stories.

Is there some unofficial cutoff that you have to get into double digit million dollar fraud before you make national news?
:eek:

So now that I think of it, all these stores in the recent past have been headline news here in Canada in in the past 4-5 days, so you know something, it is a lot.

Makes me wonder how many more like them there are out there, everywhere in the world.
:(

joe

Sylvester Graham

4-Aug-2009, 18:37

Joe-

Cripes! Frowny face is right. I must say that there's nothing like that in my little corner of Massachusetts, and I read the paper. I haven't heard of any in Boston or Vermont, and I imagine I would get wind of big news like that. That's terrible though.

-Alex