In the context of a discussion this week, on this site and his own blog, about the appropriateness of different subjects for contemporay Art, Ed Winkleman said
The truth about the current art market is in fact so complicated it’s beyond the grasp of many of the world’s best economists.
Hmmm. That is either a disservice to Economists or an overly apologetic way of describing the nonsense of current pricing.
On bloomberg.com on Friday we had a quote from collector (and former hedge fund manager) Michael Steinhardt saying that new moneyed collectors buy contemporary art as a form of “personal aggrandizement”. He added:-
There are limited assets that have cachet. If you buy the fanciest Cadillac today, or a Mercedes, its a yawn. The world is so wealthy.
The decline [of Art Prices] will be associated with declines in stocks and real estate. A lot of markets are near new highs.
Clearly the records at both Sotheby’s and Christie’s last week reflect a combination of the intrinsic value of the works sold AND a premium associated with the wallets of those bidding against each other. For this not-disinterested collector/observer, it will be interesting to see where prices settle after the impending market correction. In other words: to see what the underlying value of a work might be, after the premium associated with the irrational exuberance of super-moneyed buyers is removed from the marketplace.