The creative economy

From today’s New York Times:

New York’s very wealthy … apply for a line of credit before art auctions, supposedly to buy a painting or a sculpture, but use that borrowed money to pay other debts.

“Most people won’t go to their banker and say: ‘You know I’m in desperate trouble. I need funds,’ ” said Andy Augenblick, president of Emigrant Bank Fine Art Finance, which allows clients to borrow against art collections worth more than $2 million. Mr. Augenblick said that the number of requests for these types of loans is five times higher than a year ago. He said that while these borrowers claim that they don’t need the money, their latest financial statements show that their net worth has withered in the past year.

…

Art consultants find that the very wealthy are more receptive to parting with their precious works. Cassie Rosenthal, an owner of the Chelsea gallery Goff & Rosenthal, said that since the subprime crisis hit in the fall, and especially since the new year, some collectors are willing to sell pieces that were off limits in the past. She said that when the deals close quickly, they’re happy.

“Most people will just sort of say: ‘Will you sell this for me? When you can get me payment?’ ” Ms. Rosenthal said. “It’s more about the urgency of getting paid.”