Your source for liquidity when it matters most.
What is The FlushEx?
t.Rutt created The Flush-Ex artwork exchange as an interactive example that healthy and fair mechanisms for discovering prices are critical for the integrity of all markets, specifically the financial and art markets. If buyers and sellers cannot interact effectively about the prices at which they want to buy and sell, then they cannot discover the healthy prices that are necessary for the creation of any healthy marketplace. This is as true for equities, currencies, commodities, and bonds, as it is true for Balloon Dogs, Marilyns, Bacons, and Picassos. The Flush-Ex was created to highlight the importance of unbiased price discovery in all human economic activity.
In 2014, t.Rutt created a series of toilet seats, the Foreverland Fudge Flushers. Like Duchamp’s use of a urinal against the elite gatekeepers of the art world in 1917, t.Rutt is reportedly frustrated with the over-concentration of financial power in the $750 trillion market for financial derivatives. This concentration of power began in 1973 when several elite intellectual gatekeepers of economic thought used audacious manipulations of laws from physics to create complex models that controlled financial prices. Although they brazenly ignored all empirical evidence, these intellectual elites used their form of economic scientism to control the appearance of the financial landscape. The way they manipulated physics grew to dictate what the world was intellectually permitted to consider as “valid economics.” t.Rutt’s Foreverland Fudge Flushers are an artistic challenge to the scientistic gatekeepers of modern financial thought.
In February 2015, t.Rutt dropped dozens of them into the New York art world and the financial world. After the Great Financial Crisis of 2008, there had emerged a deep crisis of confidence about the scientific conceit of economic and financial thinking. The heretical suspicion that many practical financial market participants had harbored for years suddenly became irrepressible: What if financial economics isn’t really much of a science at all? What if financial markets would be better off without the massive physics-based complexity that the economic intellectuals had injected into markets in 1973?
The Foreverland Fudge Flushers: Class A and Class B
The Flush-Ex facilitates the trading of Expirationless Options (XPOs™) and two classes of t.Rutt’s Foreverland Fudge Flushers: the Class A: Brandeds and the Class B: Generics.The Class A: Brandeds
As a form of thanks, t.Rutt offers the inaugural seat holders an opportunity to visit The Flush-Ex to claim their Class A: Branded free of charge. Upon delivery of the Class A: Branded to the named owner, t.Rutt immediately offers to repurchase the recipient’s Flusher for $1,000. This was the “opening bid” for the Class A: Branded and is central to t.Rutt’s commitment to begin empirically rigorous two-sided markets (i.e., bid/ask). The recipient may decide to:
1) resell his or her seat and green pouch to t.Rutt for $1,000.
2) keep their seat and personalized pouch.
3) list their Branded for resale on The Flush-Ex at a price higher than $1,000.
4) exchange their Branded Flusher for an Expirationless Option (XPO™) to buy a Generic Flusher for $50,000 (i.e., X=$50k).
The inaugural seat holders have 30 days to claim their free Flusher. After 30 days, all unclaimed Class A: Brandeds are “free to trade” on The Flush-Ex for an opening “ask” price of $75,000.
Like the Class A: Brandeds, t.Rutt is seeding the market for the Class B: Generics by offering many of them for free to certain individuals. t.Rutt’s Class B: Generics are unnamed, mostly white pouches that comment on the role of standardization and commoditization in the trading of and price discovery for artistic and financial products. In addition, Class B: Generics will be used as formal submissions for publication to leading economics journals. t.Rutt’s opening bid for the Class B: Generics is $500, and the Class B: Generic market has the same structure as the Class A: Branded market. On Day One, t.Rutt will create an initial market of $500 BID / $50,000 ASK for the Class B: Generics. As compensation for creating rigorous price discovery in the market for the Fudge Flushers, The Flush-Ex will collect both a buyer’s premium and a seller’s premium, each equal to 10% of the value of any trades.
The trading of t.Rutt’s Foreverland Fudge Flushers illustrates the importance of scientifically un-biased price discovery in financial and art markets. Are “one-off” products like the Class A: Brandeds worth more because they are unique? Or are the Class A: Brandeds worth less because they are less liquid? Are the commoditized Class B: Generics worth more because they are standardized and perhaps share a liquidity preference? Or are the Class B: Generics worth less because they lack the “star quality” of a Class A: Brandeds? For example: When it sold for $42 million in 2010, was the Lichtenstein painting Ohhh…Alright… worth more because it had been owned by the film star Steve Martin?