What would you do with $250 million?

Card PlayersAccording to ArtWorld Salon contributor Alexandra Peers, in an article for Vanity Fair online, the Royal Family of Qatar has celebrated a decade of high profile Art buying by spending that amount on the last of Cezanne’s Card Players.  (The painting was purchased from the estate of the late Greek shipping magnate George Embiricos.)  That is quite a number, and a new record for the highest price paid for a single work of Art.  You could pay for the entire budget of the Museum Of Modern Art in New York for almost two years with that sum.

And what else?  I started to wonder.  Here is my quick list.  In January 2012, US$ 250 million buys:-

1 Cezanne
10 decent sized mansions in the Hamptons
100 upper-middle class family homes in Beijing
1000 Ferrari 458 Italia Coupes in Rome
10,000 Ducati 1199S motorcycles in Paris
100,000 complete (3 yr) high school educations including accommodation, food and healthcare in Lhasa, Tibet
5,000,000 milking goats in Dar es Salaam, Tanzania
50,000,000 egg-laying chickens in Dhaka, Bangladesh

Interesting, no?   So let me ask you again.   What would you do with $250 million?

Museums & Mission Statements

Andras Museum Word-CloudOur own András Szántó has just written an interesting article for the Art Newspaper on the purpose of museums; at least as proclaimed by those museums’ own mission statements.  (You can watch a video of a related discussion, hosted by András at Art Basel Miami Beach here.)   The article covers an analysis done by András and fellow Art world analyser Adam Levine of the mission statements of 60 museums around the US (you can see the accompanying Wordle graphic above) and seeks to draw conclusions about the state of strategic thinking at these grand institutions based on the words they did, or did not, use.

I think it is a fun premise and I like the comparison of the “refreshingly short” and eloquent statement from Akron Art Museum: “to enrich lives through modern art” with the tomes of MOMA, The National Gallery and Boston’s MFA.   The latter three of course were developed and approved by large Boards; and you know what they say about anything done by committee.   (Though to be fair, both MOMA and the National could have stopped at the end of their first sentences and done OK; while the MFA does a decent job with its last…)   András then goes on to draw parallels with the ongoing transition of Museums trying to more proactively respond to their market places and suggests that woolly mission statements are a symptom of woolly thinking about the role of Museums in the modern world.

It is a reasonable inference but may be too harsh. Continue reading “Museums & Mission Statements”

Enlightenment comes to Tiananmen Square?

NMCThe Art Newspaper leads this week with a thought provoking and fact-filled article on a huge co-operative Arts project between the German and Chinese governments to bring major works from German museums to the newly re-opened National Museum of China on Tiananmen Square.   The theme of the exhibition is the European Enlightenment, and the story is by our own András Szántó.

A glimpse of the exhibition:-

Over dinner on a bitterly cold January night in Beijing, I asked Cordula Bischoff, the Dresden-based curator of “The Art of the Enlightenment”, which object in the exhibition best represents its message. Without hesitating, she pointed to a silhouette print in the advance catalogue. The work, attributed to Johann Heinrich Lips, depicts Voltaire, the French philosopher, holding a lantern that shines a light outward beyond the picture frame. “He is carrying the light and leading the visitor out of the exhibition,” she said. “It tells everything.” Bischoff’s counterpart, Chen Yu, a curator at the National Museum, nodded in agreement. “This picture is a metaphor of the Enlightenment,” he said. “The European Enlightenment is still influencing people everywhere in the world. Chinese people are still enjoying its fruits.”

And a comment by a local resident:-

This is an era of tremendous change. It is time to pause and reflect. Are we a leader economically? Spiritually? It’s part of the opening up after 30 years. What have we lost and what have we gained?

As Andras points out, Confucius was an inspiration to many of the leading lights of the European Enlightenment and so it seems the cycle of inspiration returns.   One wonders, though, what the results will be as China is really only taking its first hesitant steps forward culturally, even as it charges forward economically.

You can read the full article here.

“Russia takes the lead in regulating…”

100 Rubles c1910That heading would be funny in any context but here the article in Skate’s is referring to an apparent push to regulate “Art securitization” and Art Investments in Russia.   We have for some time, on ArtWorld Salon, commented on the relative lack of oversight of the opaque and enthusiastically “managed” system that is the Art Market.   The private dealing, auction pumping, ability to cellar works that aren’t selling, and lack of any form of reliable pricing register, all make the Art market a challenging environment for anyone thinking of buying that painting on the wall as a possible investment.   For that reason, and because I am old fashioned, I would always encourage every buyer to think of the work as something they could love for a long time, rather than a way of trying to hedge the currently volatile stock markets, or that condo in Vail.

So it is rather amusing to think that Russia might try to regulate Art funds without tackling the underlying market; never mind the difficulties they will have actually enforcing such regulation in a reasonable and effective manner.   But then I read beyond the title.   Apparently a “powerful local asset management firm controlled by Putin loyalists” launched 2 Art funds on August 27; so now this new regulation starts to look like something else.   Am I the only one that thinks this looks like a way to help market the Funds? The illusion of oversight to support the notion that these are investment grade propositions?   Or am I being too cynical here?

As I have said previously on ArtWorld Salon, to get real transparency into the Art Market, and create a basis for any genuine oversight of market practices, we need a price register for each and every work of Art that someone tries to promote as “investment grade”; with NO exceptions and NO omissions.  Continue reading ““Russia takes the lead in regulating…””

Whither now, Museums?

Andy Warhol $$$Those living in Europe are sometimes surprised by the shockwaves that private sector economic turmoil creates for Arts Institutions in the US.   If you come from a region where large portions of a Museum’s budget comes from the public purse (in some countries it is all government funded) it can be eye-opening to learn that those well-funded US institutions that out-bid the Europeans at Auction are often largely privately supported.   So an article in this week’s Art Newspaper by our own András Szántó is well-timed.

Private donors remain skittish. Corporate support is hard to find and ever more tightly tethered to marketing priorities. Public funding is jeopardised by imploding budgets and competing needs. Foundations, too, are smarting from losses. Some are rethinking their support for culture altogether. Venerable charities like the Ford and Rockefeller foundations no longer have divisions with “art” in their names. Museum income from tourists, members, publications, shops, rentals and restaurants is stagnant. It has been a perfect storm.

Whilst András is right to highlight the woes of incumbent institutions trying to fit existing plans into shrinking budgets, I wonder if some of this wasn’t inevitable?   The hubris of recent years and the multitude of new small private museums seeded by privately amassed collections has spread curatorial resources rather thin and scattered good works into more buildings.   Maybe we have too many institutions?   András again.

Museums are joining forces more readily on publications and web projects, such as Artbabble, a kind of YouTube for art videos. But while content partnerships are proliferating, museums have stopped well short of the kind of consolidation that reshapes other distressed industries. “There is a pride factor that makes it very difficult to merge,” notes Maxwell Anderson, director of the Indianapolis Museum of Art.

One hears a gentle sigh of relief around the globe, as the financial markets rebound, so this may all soon become academic.   But I wonder…   So what do you think?  A disaster for Art Lovers everywhere?  Or a much needed shake-up amongst our venerable institutions?

Temperature check in Beijing

Green ShootSo how does it feel where you are? Arriving back in Beijing after 3 months traveling I passed through the requisite temperature checks at the airport (swine flu mania abounds); and so I thought I would do the same for Art markets around the world. I touched base with gallerists, collectors and intermediaries in the US, UK, France and Switzerland. Without wishing to over generalise: the Americans were still mostly doom and gloom; while the response from Europeans was more varied, with some friends reporting good works finding new homes. This is rather at odds with the general Economic environment. I heard more about “green shoots” while traveling in the US than in Europe. But maybe the American collectors had had more money in the game to lose?

So it has been interesting to arrive back in China and talk with friends in Beijing and Shanghai. Unsurprisingly, things are at least a little more positive here. Whilst there has been a general pull back from foreign buyers, young wealthy mainland Chinese buyers seem to be taking up some of the slack. The locals might prefer “decorative” to “difficult” and positive themes rather than negative or political, but they are starting to buy some of the same “big brand” names that the foreigners have made so popular over the last 8 years. And brand names have always been important in China, for all products.

But the foreign buyers haven’t disappeared completely; they are just taking a little more time and doing a little more due diligence. Continue reading “Temperature check in Beijing”

After the dead tree

The nice folks over at The Art Newspaper asked András for his thoughts on what would happen to Arts writing with the decline of the Press.   His response can be seen here, or after the break.

tanpic

Continue reading “After the dead tree”

of Buyers and Sellers…

mugrabis-nytAmongst all the excitement about new movements (see Ossian’s piece below) I find it hard to get my head out of the markets.  To wit, there is a nice Konigsberg feature in the NYT Online this weekend about the Mugrabis and their buying styles.  The title is slightly misleading (Is Anybody Buying Art These Days?) as it is entirely about the Mugrabis and mostly about their buying history, but it is an interesting read about one of the more focused market-makers of the last 20 years.  Features of their approach include the somewhat indiscriminate purchasing of their favorite artists (supporting the notion that name matters more than quality, at least in a rising market), and their “addiction” to collecting. “We are addicts. That is what addicts do,” Alberto Mugrabi is quoted as saying. Many collectors would recognise that sentiment.

The addiction of art collectors got me thinking about the broader context of contemporary art-market values.  At various points in the article, there are references to buying when cash was in short supply and to extending a collection even when the collectors were nervous about the market.  Even quite recently, works were sold to free up cash for a possible market-downturn buying.  That could be sensible triage, or an indication of how stretched the Mugrabis might be. Which raises a question about how stretched or indebted collectors are overall.

The current global economic woes are debt based. They have to do with the difficulty of companies or individuals who rely upon borrowing to conduct their business or run their lives.  Operating on debt is not necessarily a bad thing. It can simply reflect the cyclicality of cash flows (people or companies needing to spend before they can sell or earn, and therefore needing to borrow to fund that spend).  However, when lending dries up because of losses in another part of the debt market (high-risk mortgages in the current case), then companies or individuals who rely upon debt to conduct their operations run out of fuel.  The only way to then raise cash is to sell existing stock, if they have any to sell.  But when there is less cash to go around, sellers start to outnumber buyers, and prices plunge.

So here is the question: How stretched are the top collectors of the last five years?  In any part of their lives? Continue reading “of Buyers and Sellers…”

“Artoon” – The book!


self-help-helguera

With one new year behind us, another one looms in a fortnight.  The Chinese Year of the Ox is supposed to be a year of hard work for limited return. Maybe if Lehman’s analysts had been looking at their Chinese horoscopes they might have seen some problems coming.

For those of you with time on your hands and no books left from your holiday reading list, we recommend a compilation of “Helguera’s Artoons: Cartoons about the Art World,” recently published by Jorge Pinto Books, with a forward by our own Andras Szanto.

With far too many pundits making comparisons to the Great Depression, perhaps a little light relief is what we need these days. Though interestingly, the effects of the doom and gloom vary widely around the globe–at least based on the holiday conversations I have had.  What is it like where you are?

And so it starts…

christies-unsold-bacon-portrait-of-henrietta-moraes-1969Bloomberg today reported the dramatic drop in prices achieved at all the major auction houses this weekend.

Sales by Sotheby’s, Christie’s International and Phillips de Pury & Co made a combined 59 million pounds ($102 million), against minimum estimates of 106.2 million pounds, according to Bloomberg calculations. They follow a five-day auction by Sotheby’s in Hong Kong this month that raised HK$1.1 billion ($141.7 million), also about half the presale estimate, as buyers shunned some top lots for being too expensive.

This is of course to be expected as much of the collector market focuses on wealth preservation rather than spending. And galleries in New York have noticed a softening for some time.  Interestingly, though, one normally expects an art market correction 6 to 9 months after stock market crashes.  The question now is whether this is the start of a rout in the contemporary art market or merely a short term, financial market correlated, “correction.”

It also, by the way, raises a question about the other major art story of last week about recent moves by two former senior US museum directors to the private sector. Robert Fitzpatrick moved from the Museum of Contemporary Art Chicago to Christie’s Haunch of Venison, and David Ross moved on from his days at the Whitney and the Museum of Modern Art in San Francisco to be a partner at Albion.  Whilst I fully understand the attractions of better salaries and less stifling boards, I wonder if their timing was all it could be?

Not everyone is worried though.  I have spoken to two collectors this weekend who said, in effect, “finally a correction: maybe prices will come down to a more reasonable level and we can start buying again.”

So what do you think: Short term correction or start of a rout? A good thing or a bad thing?

Cause for optimism?

Tobias_Meyer__Sothebys.jpgSothebys latest Market Review, issued last night, strikes a slightly defensive but none-the-less optimistic tone, using two key arguments to support their optimism.

The first is their contention that the market of today is unlikely to suffer a crash and sustained down period similar to that of the 1990s. They base this view on the not unreasonable statement that there are more sources of buyers than was the case when Japan was the source of new money bidding up markets in the 1980s. At that time, the argument goes, there was no-one to take their place when the Japanese retreated from the market in the 90s; things are different now. Well, certainly this time we have seen new buyers from Eastern Europe, Russia, China and India entering the fray, in addition to all the new money in the US and the UK. But, as we have seen with the recent US sub-prime driven hiccup, all markets can catch a cold at the same time in today’s globally interlinked financial markets. In addition, that greater diversity of buyers is buying a greater diversity of Art, including contemporary and traditional works from their own regions (China and India being prime examples). They are not just focussed on traditional Western Art markets. So I am not sure there is the greater depth of buyer support for the traditional European and US modern and contemporary markets that Sothebys believes is there.

Their second argument for optimism is that there is a rise in the average price of lots sold over recent months.

From those price increases, however, we can infer a larger market of potential buyers.

Well, from their own figures we can see that over the same period: total sale value has actually fallen steadily since May 2007, and number of lots per sale have also fallen steadily from November 2006. With number of lots sold falling, average price per lot rising, but overall sales value falling, that actualy tells us that a few buyers are paying more money for (presumably) top works, but that fewer people overall are buying, less money overall is being spent and fewer works are being sold. Perhaps there is a larger market of potential buyers. But at the moment it looks like, aside from those at the top end of the market who are generally immune to financial market troubles, there are fewer buyers actually buying, not more.

Still, if it means a return to auctions being about quality of works, rather than quantity, it might make them interesting to attend again…

Of stocks & markets

Sothebys_vs_NYSE_1yr.gifThere is, again, a fair amount of buzz about the health of the Art market these days. Robert Frank at the Wall Street Journal recently raised the spectre of a decline, based on the 50% fall in Sotheby’s share price over the last 6 months. He points a finger at the rise in guarantees offered by Sothebys to sellers over the last year, something we talked about last August, and the potential for buyers to default on agreed purchases. Then Marion Maneker at Slate issued a well argued riposte, pointing out that the rise in debtors on Sothebys balance sheet is consistent with a rise in the value of sales over the same period; i.e. the higher the level of sales, the higher the level of money owed by buyers to Sothebys until the day they actually pay. She also makes the argument that the guarantees are not as big a worry as they might be because “most of the guaranteed paintings do get sold—and quickly” [after the auction].

I have concerns about both articles. Firstly I am not sure Frank is right in using Sothebys as a proxy for the Art market as a whole. The stock market clearly doesn’t like something about the numbers at Sothebys, perhaps because of perceived greater risk taking by the auction firm (no doubt related to the larger guarantees and larger accounts receivable), but that doesn’t mean the Art market as a whole is suffering; yet. But Maneker is also a touch too sanguine about those same guarantees because I doubt the unsold works will sell quite so quickly, nor at such “reasonable” prices, if the market was in free fall.

To me the key question that will determine whether the Art market suffers a major correction, as in 1990, or a gentle slowing of the current manic rise is the degree to which there is speculation amongst the current buying community. If the prices being paid for contemporary works in New York, HongKong, London and elsewhere reflect genuine collector passion for the works, then that passion is unlikely to fade just because prices for new works fall. On the other hand, if a significant portion of the current buyers are people buying just because it is ‘cool’ to do be seen to do so, and in addition they think they can sell their new prizes in a year or two for a 50% gain, then many of those same buyers will dump stock into the auction rooms as soon as they get nervous about the direction of prices.

So which do you think it is?

Speaking of fairs…

Forged_by_Qin_Chong.jpgWent along to the opening of the 5th China International Gallery Exposition (CIGE) here in Beijing on Thursday. Held at the snazzy central China World Trade Centre it gets cleaner and better organised each year. Sadly the Chinese works on display were mostly overpriced and familiar. Even when the artist and work were new. There are exceptions, of course. Urs at Urs Meile and Fabien at F2 are among those trying to build long term relationships with, and long term reputations for, the artists they represent; encouraging development of oeuvre and restraint in pricing. But this is gold rush time for China Contemporary. This sculpture (“Forged by Qin Chong”) probably best illustrates the focus of most Chinese contemporary artists these days.

I did enjoy seeing the work from other galleries around Asia. Attracted by the new deep pockets of the Northern Chinese, galleries from Tokyo, Seoul, Taipei, Kuala Lumpur, Jakarta, Manila, Singapore and Mumbai were all in evidence. Many with their artists in tow. It made for a fun cultural mix in an otherwise fairly quiet VIP evening. They also provided refreshing views, textures and subjects in a room full of yet more pink, bloated cartoonesque Chinese works.

It will be interesting to see how this Fair evolves. There are fewer exhibitors this year (81 vs 118 last year) and there has been a large churn. For example not one of the 5 French galleries that came last year returned. And the number of mainland Chinese galleries who bothered to exhibit is down sharply; 16 this year, down from 39 last year. On the other hand there was a new area upstairs for solo shows of young artists from around Asia (not just China) and a surprising number of dedicated contemporary video art rooms.

Buyers seemed in short supply, however. At least the media present knew who they were after as they hounded the minor TV celebrities that wandered, slightly bewildered, through the exhibits. One interesting thing was the presence of Phillips dePury as one of the sponsors. Not there to launch a new office in Beijing, but to promote their ConArt sale in New York at the end of May. A long way to come for customers.

Interesting times.

Online art auctions

online_auctions.jpgThe ArtNet announcement that they are to shortly begin an online auction service is the latest in a string of online auction initiatives. This seems a logical move from one of the better sources of ArtWorld statistics and prices. But what does this wave of online initiatives mean for the big boys? Obviously consignors of major works will still want the profile and prestige of the established offline auction houses, Sothebys, Christies et al, but if more bread and butter work starts to go through online systems, whither then the profit margins of the major houses?

And what if the new players start to gain traction in the market place? It should be easier to track prices online in real time across a number of different online sales platforms than it is now. And of course let us not forget that the biggest benefit of online transaction systems is the better access it gives buyers to product; access when they want it. This, beyond the help it gives sellers to put works forward in convenient and price efficient form, is what decides the success or otherwise of any online sales system. And of course if middle and lower level consignors start using online channels we may get better visibility on pricing and trends in a chunk of the market that is usually hidden from public view.

It is easy to be sceptical of online transaction systems. One always assumes there are some items that people need to see or touch for themselves before committing to a purchase. I certainly felt that way when I first heard about eBay selling cars or artworks online. But look at the success they have had. This may start at the bottom end of the market but, as with so many other sectors, quality of products offered rises with reach of market. I think we are witnessing the first steps of a paradigm shift in the Art World market place.

It is also potentially another worrying development for the traditional galleries. They are already losing footfall to people who prefer to see more-work-in-less-time at the fairs and biennials. An effective new online market place could also take footfall from them (or direct it elswhere) and, potentially, encourage more bright young artists to avoid galleries and promote directly online. All such artists would need is one respected critic to validate their work and they could sell “direct from the studio”.

Interesting times. Thoughts?

Out of the blue…

rothko_BGB.jpg

I asked someone recently over dinner: when was the last time she had come across a work of Art she liked enough to see every day. She struggled to answer.

Many collectors today buy works without regard to display space. I have friends who frequently refer to ‘collectable’ Art; as opposed to “something to fill a space on a wall at the summer house but it must match the Sumba Ikat and the Louis XVI canapé…”.

What are the motivations to buy in an age when one is constantly bombarded with new images from a multitude of sources; when one can see, or reproduce, any image one wants at any time? Is the Artwork really reduced to no more then a collectible? Like an expensive version of those unfortunate Franklin Mint products? Is it buying rarity, just to boast you have it? It is hard to pretend you are ‘buying something you love’ when you stick it in storage. Perhaps some people still feel they are compiling that extraordinary collection for which every museum in the country will compete when they depart this mortal coil? Or is it just for the fifteen minutes; to be listed as a buyer, like the HK acquirer of the unusual Gauguin at Sothebys last week?

Someone please answer because I am suddenly at a loss as to why I should buy anything. Especially at today’s crazy prices.

To regulate or not…

logo_salander.jpgThe apparent failure of a prominent gallery in New York this week (NYT, NYO, Bloomberg) is causing ripples within the international Art community. Whether the truth is about weaknesses in financial management (as suggested by Salander’s lawyer) or something more sinister is beside the point. Many are now asking whether, with the growing number and size of transactions, a more formal, and compulsory, oversight system is necessary for the Art world to protect individual buyers and sellers.

At various times on this site we have discussed the relative lack of transparency of the Art market and talked about some of the mechanisms that exist in other markets. For example financial institutions that take deposits and make loans are required, in most countries, to keep a minimum reserve in hard cash to allow for problems. In quoted markets for publicly traded assets, whether company shares, pork bellies or barrels of oil, every transaction must appear on a public register and be open to all bidders. No transactions are allowed to take place that do not appear on the register/exchange. In addition any market maker or analyst must declare any interest they have in assets being sold by them or through entities associated with them. None of this, of course, happens in the Art world. But all of it could.

What do you think? Do we need some of these rules? Has the Art market now reached the stage that it NEEDS regulating to protect individual buyers and sellers? Or should we continue to rely on members of the community outing their peers before things go bad? Are there less cumbersome alternatives that could be put in place? I once suggested a public register for all transactions of works by major artists. The register would be a standard for the industry. Galleries and Artists could choose to be on the register or not. If on, ALL works traded must be listed, with the date and verifiable transaction price. If not, they don’t appear on the register at all. Ultimately all quality artists and galleries would probably opt to be visible; because anything not on the register would be considered a “lower grade investment”. Views?

After the fall…

Yue_MinJun___The_Massacre_at_Chios.pngAs artist Yue Minjun reaches new highs in HK (during recent sales at Sothebys that set new records in jewels, ceramics, and paintings both traditional and contemporary), Richard Polsky over at ArtNet is predicting a decline and fall for Chinese Contemporary Art. (Which makes NY real-estate and art investor Howard Farber’s disposal of most of his Contemporary Chinese collection tomorrow at Phillips look well timed.)

But Polsky goes further, stating flatly:

“There’s nothing innovative here. In fact, other than its specifically Asian content, the work is totally derivative of Western art”.

Kriston Capps over at grammar.police calls the over generalisation “baseless”, which is maybe going too far the other way, but he raises a good question at the end of his comments: what will survive the inevitable fall? His question refers specifically to the Chinese market, but I am curious about contemporary more globally.

In both Western and Asian contemporary markets pundits are predicting corrections. In the US for macro-economic reasons and excessive exuberance. In Asia because of speculative buying by new enthusiasts, and over production of works by the big names. In both cases some artists, and collectors, will suffer more than most. Any views on whom? And how much?

Down market strategies

I wonder if anyone is getting guarantees out of the auction houses these days? In a financial market turning south it is a common strategy to buy “put options” before everyone else notices; i.e. contracts to lock in now, a right to sell something in the future, to someone else at a price fixed now, when you think the market as a whole is falling. An Art market equivalent would be to agree with an auction house now to sell a collection later in the year, on condition of sale price guarantees, set now, at current pricing. Always a risk for the auction house (ask Phillips de Pury), in a real down market it can be a disaster. The smart auction houses understand this, of course. If they are nervous about market values, they stop giving guarantees. Perhaps only in some markets. Perhaps in all.

So I repeat my question: does anyone know if auction houses are still offering sales guarantees this year?

Contemporary: what real value?

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.

he continued:-

The decline [of Art Prices] will be associated with declines in stocks and real estate. A lot of markets are near new highs.

Rothko__72.84m.jpgClearly 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.

China goldrush continues…

eulogy_by_CYF.jpgOn Sunday Chen Yifei’s “Eulogy of the Yellow River” sold for a hammer price of RMB 40.32m (about US$ 5.25m) at China Guardian’s Spring sale. Painted in the middle of China’s Cultural Revolution, it is an example of the Chinese Socialist Realist style by the then-25-year-old patriotic Chen. The previous record for his work was RMB 4m (about US$500k) for one of his photorealist “pretty girls in traditional costumes and slightly artificial poses” series which have been quite popular. That ten-fold jump was attributed to the fact that this is the first major work of Chen’s to come to market since he unexpectedly died in 2005. But the interesting thing about the local reports on this sale is the constant benchmarking of Chinese Art values against those in the West; as if it was a matter of national pride, and a measure of how China was doing generally in the world. Rather than any comments about an overheated market.

So the heat continues. On May 27 Christies has their Spring Asian Contemporary sale in Hong Kong with the expected selections from Zhang Xiaogang, Yue Minjun, Fang Lijun, Wang GuangYi and Zeng Fanzhi. The point of interest this time is the inclusion of earlier works from these artists, who we are used to seeing at auction, including a really quite interesting Zhang Xiaogang (Portrait in Red from 1993) which clearly presages the later, and excessively popular, Bloodline series. If the heat continues, expect more exceeding of estimates.

WGY__YMJ__ZXG_at_PJY.jpgFor those keen to jump on the “hot five” Chinese artist bandwagon but unwilling to pay 7 (or 8?) figures in hard currency for something to fill a space on the wall, why not head down to PanJiaYuan, Beijing’s world renowned ‘art and curio’ market, and pick up original oil paintings “in the style of” whoever you would like, for US$30 max. (See pictures at right and below taken at PanJiaYuan last weekend.) Now doesn’t that seem reasonable for your own private piece of Chinese Contemporary Art Bubble history?

zxg, ymj at pjy_1.jpgPanJiaYuan is experiencing a demand bubble of its own. 6 weeks ago there was only one such stall offering Zhang Xiaogang copies. This weekend there were three stalls offering similar pictures and the range of contemporary artists available had grown. “Very popular with laowai” I was told. (Laowai being foreigners.) It will be interesting to see how this little sub-market develops.