Warren Buffet called Bitcoin "rat poison squared". Well if the Fed is a rat maybe being rat poison is a good thing.
This piece was created for the 10 year anniversary of Bitcoin. Embedded into Bitcoin is a dislike of bank bailouts (genesis block) and fiat currencies. So naturally a "protest" piece placed at the Federal Reserve seemed like a natural choice. In NYC unions/workers often place inflatable rats outside buildings as a form of protest against the building's owners. Unlike the brown rats used in these demonstrations, this Bitcoin rat was colored white similar to lab rats.. This choice was made as the 2008 Fed bailouts were a "laboratory" experiment in economics (eg. the size, the techniques, etc).. The imagery of rats also seemed appropriate as Warren Buffet called Bitcoin "rat poison squared". Well if the Fed is a rat maybe being rat poison is a good thing. (see below for another peripheral reason for the rat imagery).
The rat sculpture is covered in Bitcoin code and one of its eyes has POW. POW is a common acronym for proof of work (core to BTC), but it is also the expression in Roy Lichtenstein's epic painting "Sweet Dreams Baby". This reference is comically asking will proof of work knock out the Fed and fiat currencies. In 2008, the Bitcoin rat was placed on the Maiden Lane side of the New York Federal Reserve. In addition to being a street in Lower Manhattan, it is also the name of several LLCs constructed to bail out AIG and Bear Stearns in 2008 so it seemed the natural spot for this installation.
Here it is installed outside NY Federal Reserve on Maiden Lane October 2018 and a modified smaller version below at Jekyll Island on Sep 18 2024.
Several interviews that explain piece:
For description see 2nd picture below the first
This installation addresses "cheap money," inflation, and the Federal Reserve (in finance, "cheap money" is a monetary policy where the Federal Reserve sets low-interest rates.)
The work features an old-school gumball machine filled with $10 bills offered for 50 cents – literally cheap money.
The choice of $10 notes is a nod to Alexander Hamilton, the face on the bill, who was a huge advocate for a "national bank." As well, his ideas provided the foundation for the creation of the Federal Reserve a century later.
The “out of order” sign raises fundamental questions about the Fed over the last several years both economically and ethically.
Q/A
Why was it installed at night?
To hint at the overnight borrowing rate which the Fed plays a major role in establishing its level.
Was there a second related installation?
Yes to more thoroughly explain some of the issues a second sculpture was exhibited several weeks later called:
Arbitrage focuses on a violent short squeeze in October 2008 that caused Volkswagen stock to climb 400 percent in two days making it the world's largest company by market capitalization, eclipsing Exxon Mobil. Short sellers had to scramble to cover their positions in VW (or VWO, which is the stock symbol) after fellow auto maker Porsche announced a substantial holding of stock and options in the Bug maker. Indeed, the stock climb had nothing to do with the fundamentals of Volkswagen’s business or the global auto industry (which was simultaneously getting hammered requiring the U.S. government to bail out GM), but it did serve as a lesson to the possible risk of losing great sums of money when a trader engages in short selling (or arbitrage). In the sculpture, Volkswagen’s superior size is represented by the two scales which pit the company’s weight against that of an apple (since Apple Computer is currently the largest company in the world by market capitalization) and a comment on the gas tank (“XOM only”) as Exxon fit inside Volkswagen. The graffiti on the car comments on situations, people and events related to shorting and squeezes. The sloppy aggressive paint that could appear as a mess points to the fact that when one puts these trades on in a sloppy aggressive manner they do so at their own risk.
The monolines (eg, Ambac and MBIA) provided insurance to help guarantee many of the complex products constructed from "crappy" subprime mortgages e.g. RMBS. In essence these companies provided protection which helped many of these products to be rated investment grade. While their potential obligations were massive these companies were relatively tiny (market capitalization) and almost unheard of (they were not Apple, Google or Exxon). In the sculpture you see a beautiful marble toilet with one glaring flaw: its bowl is a tiny thimble (an object which is way to small for its intended purpose). To reflect on the abundantly obvious, the toilet may look nice, but when its used its going to get really messy.
Here $10 bills are for "sale" for 50 cents. Alexander Hamilton, whose image adorns the $10 was a huge advocate for a "national bank". His ideas provided the foundation for the creation of the Federal Reserve a century later. Cheap Money (low interest rates which are often impacted by the FED) was a central cause of 2008 Crash.
Cheap Money Is Out Order
The “out of order” sign raises fundamental questions about the Fed over the last several years both economically and ethically. It also relates to the Fed’s hawkish turn (Jerome Powell’s remark about retiring “transitory”, and tapering), which means it may soon be harder to get cheap cash.
You are looking at an art installation by Nelson Saiers. This work portrays a street vendor selling “rug pulls” in front of the Securities Exchange Commission’s (SEC) office, similar to the street vendors commonly seen peddling “fake” luxury products in Manhattan(see 1, 2., or 3). A rug pull in the cryptocurrency world is a scam where developers abandon a project and take their investors' money. In this art work they are rugs with "Pull----->" spray painted on them. The overall simplicity of this installation is designed to reflect the simplicity often found in many of these unlawful scams. Many of these were not intricate schemes (like you encounter with Enron), but rather straightforward acts of theft.
Finally, the items in the small cart add to the story and explain various aspects of these scams.
Background:
Illicit crypto schemes have siphoned off billions of dollars from unsuspecting victims. In the artist's opinion, the SEC's shortcomings extended beyond merely failing to safeguard investors. While he acknowledges they have a very difficult job it seems they were too lax in some ways but also too aggressive in others. He feels their rejection of certain investments may have unfortunately led some investors into more fraudulent products.
