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#1 |
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Join Date: Jun 2017
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No, the "money laundering" explanation doesn't hold up
In response to several other threads, I'd like to offer the view that it's highly unlikely we witnessed money laundering during the Phillips auction that happened over the weekend.
Here are some reasons, in context of the auction itself (as opposed to auctions in general). 1. First and foremost, a money launderer isn't going to pay 2-3x over street value (not even MSRP, but street value!) for a current production Rolex GMT-Master II, or 4x the upper estimate for that slanted Cartier, for two chief reasons. First of all, the launderer's highest priority is to avoid detection. This is a screaming red flag. Second of all, it's fiscally inefficient; the launderer can head to 47th street and buy Rolexes at street prices, with cash, and avoid even less detection and face lesser risks than through an established auction house. 2. Conversely to the point above, money launderers are more likely to buy expensive pieces at fair market prices, or at least break records for rare pieces, where the narrative ends up making sense. Consider the John Player Special Daytona that went for north of $1M. Before this auction, the market prices were in the $400-700K range. But they're rare. Someone bidding so high would fit the time-based narrative that rare pieces in demand simply gain value over time. 3. This is unwanted attention for Phillips themselves. They aren't strictly a Swiss company that can avoid government oversight/regulation; I believe British companies do have to submit their bookkeeping to the tax man. Now I know Phillips was once British, but their HQs are now in NYC- so if they're now an American company, the argument still holds. If you want to assume that Phillips is simply "in on it" with said money launderers, fine- I revert back to the previous points: a money launderer with half a brain isn't going to get busted over some (comparatively speaking) cheap Rolex. 4. There is the issue of volume. There are far more lucrative and efficient methods for money launderers to "legitimize" their cash than to devote time resources, and most of all, risk of exposure at a public watch auction. The total haul for the auction was about $8-$9 mil. Folks, for those who have to launder money at auction houses, that's a relatively small amount. And so many of you will probably say, "well, why spend $30K on a Batgirl?" to which I will wholeheartedly agree with your frustration and curiosity. It's weird, and I don't think it's legit. These prices could be the result of nefarious dealers trying to manipulate market information and pricing. Perhaps it's a subtle play by the auction house to drum up interest in the future- they're not exactly losing anything if they subsidize the auction fees. I don't have conclusive proof for either of these- but at the end of the day, "money laundering" doesn't make much sense.
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#2 |
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Join Date: Mar 2013
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Maybe someone just really wanted one for the weekend to whom that is not a lot of money.
People forget just how wealthy many people are |
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#3 |
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Hey, fair enough. It's a possibility, though it leaves me wondering why they wouldn't go through Chrono24 or something. *shrug*
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#4 |
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Someone like that wants it now.....they don't want to deal with something like chrono24...I've been to auctions where the booze is flowing...my buddy bids on something and to screw with him I bid it up...all in good fun...these things happen
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#5 |
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I was thinking the exact thing, money movers want to legitimise their cash with lines of credit on the purchases they make, a portfolio of London apartments or a valuable painting will do but not a bunch of watches you overpaid for, I’m starting to think it’s the manufacturers themselves who are behind this, be interesting to see the results the other auction houses will bring.
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#6 | |
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Quote:
I understand that but in this case the bids were coming in on the telephone. Sent from my iPhone using Tapatalk
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#7 |
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Join Date: Dec 2012
Location: New Jersey
Posts: 586
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Bidding up the friend, legit laughing here
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#8 |
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Join Date: May 2020
Location: UK
Watch: 114060
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Auction houses have to follow anti-money laundering legislation for every purchase over £10,000. Buyer has to be verified and checked.
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#9 |
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Join Date: May 2015
Real Name: Gabe
Location: Tampa, FL
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Agree money laundering is a stretch. Dealers driving up prices is more likely.
Most extremely wealthy people I know do not spend their money frivolously either. I'll venture another guess (admittedly a shot in the dark, but hey, we're having fun here) - maybe these buyers had buyers agents who also might take a commission on the purchase price. If that's the case, they would have reason to bid higher than reasonable. |
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#10 |
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Didn't stack up to me either. Seems like a really crap way of doing it. Though I am no expert so was listening intently. Not running in 1%er circles and such.
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#11 |
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Join Date: Dec 2018
Real Name: Ralf
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I have seen lots of times in these auctions that the price is insane because some people just don’t want “that guy” to have the piece.
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#12 |
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Join Date: Jun 2017
Location: Odorious Onion
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For those who enjoy 90s sitcoms, consider watching Seinfeld's episode titled "The Bottle Deposit," where the Elaine has to bid (on behalf of her boss) on a golf club set that previously belonged to JFK. Hilarity ensues.
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#13 |
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Why do people gamble at Las Vegas or Monte Carlo, knowing they will very likely lose money? When you have figured that out, the auction will seem more reasonable.
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#14 |
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Join Date: Aug 2009
Real Name: Steve.
Location: UK
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Maybe somebody knew there was a micro-chip inside with the plans for the new, Chinese, 'Invisible' Hunter Killer Super-Submarines.
....just a thought. ![]() |
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#15 |
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Join Date: Aug 2012
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After watching Ozarks on Netflix, anything's possible...
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#16 |
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Real Name: Bruno
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Watch: Rolex
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I don't know the exact circumstances of the auction but this was my first thought. It happens. "He shall not get it!"
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#17 | |
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Quote:
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#18 |
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Join Date: Jul 2015
Location: Philadelphia
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Yeah, I don't buy that or the dealers pumping up either. Whats the point and did literally every dealer/manufacture pick this auction to pump things up with????
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#19 |
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Join Date: Aug 2008
Real Name: Hmmmm.
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1. Who is to say the alleged laundering isn't being perpetrated by idiots. It does happen, you know.
2. When economies are in the toilet, things dont tend to be predictable and follow any "rules." Someone referenced Ozark, and I agree with that sentiment. You wanna call it boozed-up wealthy folks, you go right ahead. Im sticking with the launderers. |
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#20 |
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I remember reading an art dealer’s book years ago, Where he cited several examples where bidders at prestigious auctions (sothebys / Christie’s) purchased lithographs at a much higher price than would have been readily available from the artist’s dealer a few blocks away. (Unlike an original painting, a litho would be 1 of a 100 or so signed prints - so it would be irrational to pay more for the same work.)
1. His point point was that collectors are irrational or fail to do their due diligence (as we do on chrono24). 2. Also, there are certain Star auctioneers that prob can add a good 10% (on average) to the high bid; by playfully creating that sense of scarcity and competition. If you’ve ever been to one, that final “fair warning...” is such an intense few seconds. The leading bidder hoping for silence and a quick closing; and the other interested parties suppressing the irrational impulse the raise the paddle and bid just once more to avoid that wave of regret and disappointment after the hammer falls. |
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#21 |
Banned
Join Date: May 2020
Location: Singapore
Posts: 545
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Because the entire world central banks are printing trillions of dollars and monetising debt
Mcknvertbthise fiat currencies into tangible real assets |
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#22 |
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Location: North Shore
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In certain locales there aren’t necessarily trusted gray market options like in the US, Asia and parts of Europe. This is the best alternative, and Phillips is viewed as trustworthy, or even prestigious source.
It’s also possible that grays who are hoarding these pieces may bid up the price figuring it’s OK to overpay for one if they have 20 more in the safe that they can then sell for even more of a premium. We’ve all seen the photos on Instagram of gray dealers with dozens of GMTs in a briefcase or safe. Sent from my iPad using Tapatalk
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#23 |
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Join Date: Nov 2011
Real Name: Lemuel
Location: Asia
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Paul Thorpe said in a video that it is probably Rolex themselves buying the watches. It's marketing. People are talking about the auction and their watches. Success I would say.
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#24 |
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I'm now supportive of this being Rolex themselves - they've gotten 30000 dollars worth of free advertising world wide, easily.
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#25 |
Banned
Join Date: May 2020
Location: Over here
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Conspiracies....not so much.
People with a lot of money....Likely. Auctions are fun, entertaining, and most of all exciting ...especially for people with deep pockets. |
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#26 |
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The factory must be desperate to fill AD orders. So they're buying auction and Grey dealer supplies, then refurb and send to AD.
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__________________ "Some programs will be thinking soon. Won't that be grand; computers & programs will start thinking and the people will stop." -- TRON 1982 Sent from my Etch A Sketch using String Theory. |
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#27 |
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Join Date: Apr 2016
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Have you seen those photos with dozens of hot models hoarded by dealers?
At these economic conditions they aren't flying off the shelves. One way to save prices is to put an absurd winning bid on most popular auctions. Notice prices aren't that inflated under regular auctions. Only severely inflated on major auction houses with lots of press coverage. "Hey, seen the news? It just sold for 30k at [x], here's mine much cheaper, only 25k." Lots of grey dealers in my area are posting these inflated auction results on their instagram once results were out. 'Educating' people how cheap their current inventories are. |
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#28 |
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A friend went to the big car auction in Scottsdale AZ a few years ago and committed the cardinal sin of drinking and bidding. Came home with a Slant Nose Porsche Turbo. I was admiring the car and said, I thought you were a Ferrari guy. He said, he is and he was shocked to realize what he had bought. It was a cool car though and fairly rare. White Porsche slant nose turbo looked good with his Gold President too!
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#29 |
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Did the vintage pieces at this auction for 2-3 times their worth also??? I saw 54k for a polished crappy flat4 that should have been high 20s at the most....
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#30 |
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Join Date: Aug 2017
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These auctions are a form of marketing.
Just like the $17m Paul Newman Daytona. Many still suspect the secretive buyer is Rolex themselves. And why not? This is a $17m marketing ad that keeps on giving. People are still talking about it even today. Sent from my MI PAD 4 PLUS using Tapatalk |
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Tags |
auction , gmt 16700 , gmt blnr , gmt-master |
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