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Author Topic: Art Capital, Goldman Sachs, Annie Liebovitz, and Predatory Loans  (Read 870 times)
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Monkey All Star Jr.
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« on: August 18, 2009, 12:16:38 PM »

I don't know off the top of my head who Annie Liebovitz is, but this caught my eye because of it's link to Goldman.

But here's the part of Salmon's writeup that's really baffling:

Allow me to make the subtext explicit. Art Capital talked Annie Leibovitz into signing a draconian agreement ó one which she was all but certain to be forced to default on. The terms were onerous enough to begin with, since they gave Art Capital sole right to sell any of Leibovitzís work while any of the loan was still outstanding and for two years thereafter. But the terms become really predatory if and when Leibovitz defaults, to the point at which Art Capital expects to make an annualized return on its investment in the 40% to 50% range.

Art Capital did not, however, simply have $24 million lying around when it extended the loan to Leibovitz. As a result, it sold part of the loan to other investors, including Goldman Sachs. And Goldman Sachs, while itís happy to make lots of money, does not want to be painted as a predatory lender. So Goldman is now Leibovitzís best hope: if Goldman can buy out Art Capital, it might be able to come to a more Annie-friendly agreement.

Sorry, but this Annie Liebowitz-as-victim-of-predatory-lending line just doesn't pass the smell test.

The idea of predatory lending kind of makes some sense when you're talking about mortgage brokers foisting $350K mortgages on minimum wage earners, though even then, the brokers were profiting by exploiting the stupidity of banks. (We're not asking anyone to feel sorry for banks here, mind you. We're just saying).


I wonder why some would think the loan was set up to ensure default?

Is this like those with credit card payments, that are going from like 2% to 5%?

How many could afford the 2% payment, but are not drowning (and sure to file for bankruptcy) with a 5% payment?

Is this another example of change and consumer protection under the Obama administration?

All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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