Only a month ago – well after the Crisis had kicked off – Forbes was breathlessly reporting that some billionaires had managed – inadvertently or otherwise – to 'hedge' their balance sheets by investing in fine art. Eli Broad, for example, had lost approximately $2 billion in his equities portfolio over the previous year, the magazine reported, but the 'soaring value' of his art collection (it increased by $1.9b in the same time, according to a recent appraisal) had nearly made up for it....
Well, I've got some bad news for Mr Broad and anyone else with art on the balance sheet. Based on last week's auction results (and last month's in London), collectors should be marking down the value of their holdings by roughly 40 percent – which, as it happens, parallels the year-to-date losses on the Dow Jones Industrial Average (down 37 percent since this time last year) and the S&P 500 Index (down 42 percent for the same period).
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