Icarus Strangled focuses on a financial derivative termed the "strangle;" its payout is focused on the wings of an asset's distribution. The Greek mythological character Icarus died from his wings falling off after he arrogantly travelled to close to the sun. In finance, it is the height of hubris to not protect your portfolio from an event in the wings of its distribution (a strangle is capable of doing this). In order to reference this incident, this piece was baked in a UV oven for a period equivalent to 10 years of solar exposure
ALCHEMY: TURNING $#!T INTO GOLD
This work comments on the extreme compensation and in some instances large exit packages (golden parachute) many Wall Street CEOs received leading up to 2008 crash. The painting includes a gold $1-dollar coin next to the words "heads I win tails you lose". These elements point to the fact that executives were often handsomely rewarded whether their institutions were profitable or not. Many of these institutions were subsequently bailed out by the US taxpayer, i.e. us. The choice to use Warren Harding's image on the coin has several interpretations including an interesting anecdote from his life. Harding, who was president from 1920-23, paid off a personal poker debt by giving away White House china, property owned by the US taxpayer. Other elements of the piece include crossed out versions of the word "win" written in larger and larger font. This points to the never-ending pull of money and greed that played a major role in the crisis: no matter how great the win, even more was desired.
WHAT A MESS
“What a Mess” tells the story of JP Morgan’s purchase of Bear Stearns through a complex personification and imagined exchange between the heads of each at different moments in time. During financial panics, the legendary investor J.P. Morgan was known for playing the card game solitaire while contemplating different strategies and bailouts. Jimmy Cayne, the ex-CEO of Bear Stearns, notoriously and irresponsibly disappeared from regularly from work to play bridge as his firm plunged towards it demise. The failing of Bear Stearns led to JP Morgan (the firm not its deceased namesake) buying Bear for $2 (later upped to $10). These two elements motivate the fictional letter scribbled on the piece: "hey jimmy, I’ll give you $2 (10) but next time you should play solitaire. Regards, jp morgan."
Drawing on the actual events of the negotiations between the companies, Saiers also brings the practical elements to life. During a frantic weekend of negotiations between JP Morgan, Bear, and the Fed, one potential offer disappeared, only to be replaced by another after the Fed invoked section 13(3) of the Federal Reserve Act which allowed it to help “bailout" a portion of Bear Stearns. The urgent and exhaustive communications over this pivotal weekend demanded a cell phone that was well charged and not dead. The artist used numerous cell phone
chargers dangling from the painting as a reminder of the multitude of actors at play in a deal of this magnitude, and how the complexity plays out practically.
4 LETTER WORDS
Yo Cuz is a commentary on the advent of WW 1 and the global stock exchange closures that resulted from it.
Archduke Francis Ferdinand was assassinated by a Serbian terrorist after his driver made a wrong turn. The resulting aggression between Serbia and Austria Hungary drew two of their allies Germany and Russia into the possible conflict. A series of wires between their respective leaders Kaiser Wilhelm and Czar Nicholas (who were first cousins) failed to thwart all of Europe being dragged into a bloodbath that would kill 30 million people and cause the closure of almost every global exchange on July 31 1914.
The piece turns these wires into a modern day iphone conservation and abstractly asks various financial questions such as where the VIX would have been on July 31, 1914 (given the nonstandard uncertainty of WW1 and the inability to forecast how and when options would mature).
The imagery also points to a cue ball in the process of striking another ball causing a chain reaction of motion. This is relevant to the events leading to WW1, but it also hints at the cause of some financial crashes. Often a triggering event such as the collapse of Lehman Brothers (or the Knickerbocker Trust) causes the rest of the market to follow suit leading to a market crash.
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 BIG LONG
“Getting long” is a phrase that means to buy a security. One of the greatest trades of the last 10 years was getting long (buying) bank stocks/debt in early spring 2009. At the time people were very fearful that the banks would continue to fail and even be nationalized by the government. It turns out the US Treasury had just published a white paper outlining their plans to protect the banks and in some regards buy stock significantly over the levels that they were trading at. One could think of it as knowing the plays of a football team. In many ways buying bank securities was the ultimate case of “bottom fishing” (buying deeply depreciated assets hoping they will turn around).
BEN COULDNT MAKE AN APPEARANCE BUT LEFT THESE INSTEAD
For description see 2nd picture below the first
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.
MIDAS LOSES HIS TOUCH CHASING HIS TAIL
Midas Loses His Touch ChashingHis Tail addresses the hyperinflation experienced by Germany in 1923 (the ultimate financial "tail event"}. A decade earlier Germany took their currency off the gold standard. Due to the substantial reparations levied on them after WW1 they aggressively printed money only to see their currency depreciate at a similar rate leading an important English commentator to remark, "In the whole course of history, no dog has ever run after its own tail with the speed of the Reichsbank." The series of pairs of circles hints at the head and tail chasing one another. The space-like imagery points to the exchange rate of Germany whose exponential rise would best be described by the phrase "to the moon".
VIX ABOVE 40
VIX above 40 points to some market participants blindness to the possibility that the VIX could greatly exceed 40 during the fall of 2008 (“VIX” is abstractly written in braille above 40). Over the prior decade the VIX spiked in response to events such as the 9/11 tragedy, the collapse of Long Term Capital Management, the financial crisis in South East Asia in 1997, the extensive corporate fraud in 2002, etc. In all of these cases the VIX’s ascent was halted in the 40s (official closing price). With this historical back drop some had as a rule of thumb to get long stock and short the Vix when volatility hit this artificial barrier. Both of these trades played out badly in October 2008 as stocks continued to fall and the VIX almost hit 90.
#Flashcrash uses Deep Blue’s historical defeat of world chess champion Garry Kasparov to comment on the use of computer systems in high frequency trading and their roll in flash crashes.