Sothebys 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…

There 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?

Went 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.

On the 14th, Artforum hosted a panel at the New School with the stripped down and self-evident title “Art and Money.” The panelists included Tom Crow (much esteemed if somewhat dusty art historian currently installed at NYU’s Institute of Fine Arts), Amy Cappellazzo (International Co-Head of Christies ’s Post-War and Contemporary Art department, art world punching bag and proud mother of the auction house as “big box store” analogy), Yinka Shonibare MBE (perhaps the very definition of the post-historical, post-colonial, post-black artist), Kathy Halbreich (former Director of the Walker and now MoMA’s image disciplinarian-cum-Kultur defender) and Jeffrey Deitch (maestro of the art world spectacle who never met a hipster he didn’t like); it was, to say the least, an almost perfectly diverse array of the art industry’s different player positions. Tim Griffin (Artforum’s soft-spoken editor) moderated the event.

The house was packed, no doubt in anticipation of the rhetorical grenades that the panelists, antagonists all, would lob into one another’s laps. But once again, “politesse” was regnant (see Andras Szanto’s dispatch from the ADAA/MoMA Panel back in February). Here is a brief rundown of the more and less interesting of the panelists’ comments:

Deitch opened with an astute statement on how the artworld had become the newest “platform” upon which “creative people” from all disciplines gather, adding that “people at the top of their game like to meet one another,” which sounds a lot like celebrity culture entering a plea of Innocent.

Shonibare noted that a “bigger market” makes room for “bigger thoughts.” As to whether those thoughts are actually better, he withheld judgment, but did add that bigger work continues to run the risk of appearing “superficial.” Read More »

The opening night of this year’s Art Dubai fair culminated in a sit-down dinner for 250 VIPs under a tent at the Ritz Carlton Hotel, hosted by Canvas magazine, a glossy local art publication. The invitation called for “lounge suit/national dress.” The smell of pungent flowers from the hotel’s garden mixed with the aroma of the sea just below. The feast of yellow fin tuna and beef tenderloin was paired with generous pourings of American Zinfandel and, after dessert, sweet Tokaj wine from Hungary. It was at that point that some of the guests approached the stage to perform cover songs of Italian pop tunes from the sixties. Shortly after midnight, as the jazz band launched into a hearty rendition of “Parole, parole, parole,” it was time to go.

Read more of my report in Men’s Vogue about the immense cultural projects in the United Arab Emirates here.

“How come that title is still available?” I thought to myself as a smiling woman handed me a copy of ART WORLD magazine at the recent Armory Show in New York. The attractive U.K.-based bimonthly is unlikely to win any major writing awards, but it gets a friendly slap on the back for letting the art do the talking.

The first impression is somewhat of a letdown: a parade of short and light news items about all the usual-suspect events, including cheesy snaps from Larry Gagosian’s opening in Rome, followed by profiles of overexposed art celebs (is there anything about Tracey Emin we don’t already know?) But as you dig further into the magazine, the artists turn less predictable. Best of all, whole spreads are filled up with comfortably spaced, high-quality reproductions of actual work. Nice job.

One thing ART WORLD doesn’t cover in great depth is, well, the broader art world. Issue No. 3 has a single dealer profile. Basically, it’s a traditional art magazine in a slightly updated, newsier garb. And that may be just fine. Will this one survive?

Hammad Nasar finished off the previous thread with a statement which many of us take to be gospel, namely, that when it comes to art, or really to any offering from the culture industry, the most expensive product is not the “best” product, it is simply the most expensive. So remains open that space for “critical judgment” which, most would agree, is a necessary condition for criticism to function in the first place.

But are we fooling ourselves? Are our judgments–aesthetic, critical and otherwise–more determined by price than we know? The Art Newspaper seems to think so: Anna Somers Cocks’ has written a short piece on a recent study by Cal Tech scientist, Antonio Rangel, who hooked up a group of volunteers to an MRI machine and measured the pleasure centers of their brains while they tasted various wines of different quality and, most importantly, expense. Over and over again, the volunteers “enjoyed” the expensive wines more, even when the price tags had been switched and the ‘82 Margaux turned out to be an ‘07 Bin 28.

The parallel to art is both obvious and ill-fitting, which is presumably why Cocks only draws the conclusion that the Rangel effect (actually the Rangel-Veblen effect, given Thorstein Veblen’s economic theorization of it back at the turn of the twentieth century) will contribute to the retraction of the art market once the powers that be are finally able to utter the word “recession” in public. But do we really need Rangel to confirm for us that people “like” their art less (or anything for that matter) when it’s perceived to be losing value? More interesting might be the possibility of a parallel study which could address the physiological effect of positive or negative criticism on the pleasure centers of the brain. For example, what happens when someone tells you the ‘82 Margaux tastes no different than that ‘07 Bin 28? What does price get you then? Call it the “sucker” study. Don’t we think the art world could use one?

For this post, I was going to write about the Whitney Biennial. I was planning to coin the phrase “Unfinish Fetish” to describe the prevalence of inexpensive and coarse materials in the show. Alternatively, I might have written about the surprisingly solid auction sales of recent weeks. Or I might have devoted an article to the excitement of the ADAA fair and its ebullient opening in New York.

But none of this would have mattered much, because, you see, pundits don’t matter much. That was an insight I gained last weekend at a conference organized by the Museé D’Art Contemporain de Montréal.

The Max and Iris Stern International Symposium on the State of the Contemporary Art Market coincided with the worst snowstorm in the city since 1971 (a pundit may have observed the symbolism of this fact). A highlight of the event was a presentation by Michael Moses, the economics professor of Mei-Moses index fame. The talk included fresh figures from 2007, according to which art solidly outperformed stocks last year. The Mei-Moses jumped just over 20 percent, against a 5.5 percent uptick in the S&P 500. (The real money was in gold, which shot up 31 percent.) No surprise, but 2007 was the first year since the inception of the index that fine art values measurably outperformed real estate.

But the statistics that raised the most eyebrows had to do with “citations.” Does a mention by a critic or a selection by a museum curator make a difference in the sale price of an artwork at auction? No. “Art critics and museums are basically meaningless.”

Well, almost meaningless. Only when there had been at least 11 citations by critics or selections by curators (as noted in the auction catalog) did citations make a dent on prices. Of 12,000 works analyzed by Professors Mei and Moses, that could only be said about 185 objects. Even then, the impact was a paltry half-percent.

The findings raise interesting questions when it comes to journalistic accusations of “collusion” by “interested parties” who loan artworks to museums to get them talked about by critics. This may matter for contemporary art, which does indeed get a bump from museum exposure and critical validation, as the creators of the works at the Whitney Biennial, finished or not, will soon find out. But in most cases, where artists already present at auction are concerned, the data do not confirm the conventional wisdom that citations matter.

Last point: If you can make it to Montréal, don’t miss “Cuba! Art and History from 1868 to Today” at the Museé des Beaux-Arts. It may be the best exhibition you see this year, and it won’t be coming to the U.S.

If you have been following the US election campaign, Saturday’s ADAA/MoMA panel on “Art Dealers and Auction Houses: A Cultural Divide” had a familiar ring to it. It felt like a presidential debate.

The teams of gallery and auction-house heavyweights – boasting “150 years of combined art-world experience” – exuded statesmanlike politesse. Some waxed doubtful about the gathering’s antagonistic premise, and none more so than Simon de Pury, who in his trademark, honey-dipped accent declared, “I find it amusing to hear about the so-called divide between auctions and dealers. We all have a great responsibility toward the artist.”

The jolly, why-can’t-we-just-get-along mood was breached only by occasional episodes of harpoon throwing, such as when Andrea Rosen compared auctioneers to sharks. “Sharks aren’t bad,” she offered, quoting an unnamed artist in her gallery, “They are opportunists. They take the fish that’s easiest to get.” But even Amy Capellazzo of Christie’s refused to take the bait.

Moderated by the unflappable Lindsay Pollock (an ArtWorld Salon friend), the discussion checked off various merits and weaknesses of the two art-business camps, and even lingered on their interdependencies. Among the more engrossing points was the one suggested by Michael Findlay, the panel’s ranking member by age, who cited “normal accident theory” to illustrate how galleries may prove more resistant in a recession. “The larger the system,” he said, “the more likely there will be catastrophic failure.” Comparing galleries to “mom and pop shops” that can be flexible in the face of a downturn, he concluded, “We may be the safest bet in the future.” Although he was making the comparison to auction houses, he could as well have been referring to art fairs, some of which, as Ian points out in the previous thread, may also quickly become casualties of a severe downturn.

The best came at the end, when it was time to opine about what’s around the corner. David Zwirner predicted that “Things will soften a bit, there will be a slight shakeout, but medium and long-term prospects are very good.” Michael Findlay suggested, “What will come back to the market is a degree of selectivity that has been lacking.” According to Andrea Rosen, “Some of this is already happening. I’ve learned a lot from opening my gallery during a recession. I already see a reorientation to meaning.”

“It’s impossible not to have the uncertainty in the larger markets effect our market,” said Amy Cappellazzo, adding that people are likely to gravitate to “what makes them feel safe,” such as painting. For Anthony Grant of Sotheby’s, the “market is so international now” and “the way people make money is so different,” that it has become difficult to make predictions. Simon de Pury got the last word: “It’s an issue of availability,” he said. “The only thing you can do, if you have money, is to build the best contemporary art collection in the world. The market is just beginning to be truly global … I feel very optimistic.”

What does your crystal ball say?

A report from new AWS contributor Leif Magne Tangen

The debate about the power of the collector has been going on for some time now. An interesting project in Leipzig will certainly raise eyebrows again in this regard.

The Museum of Contemporary Art (Galerie für Zeitgenössische Kunst, or GfZK) is opening its 2008 winter season with an ambitious project: Over the next two years, the museum will invite 11 collections, collectors and galleries to display their collections of art in any way they see fit. No interference. No questions. No veto.

The title of the project says it all: Carte Blanche.

In fact, there is nothing new about collectors being given freedom to do what they want in a museum. We have a prime example only 200 km away from Leipzig, in the Hamburger Bahnhof Museum in Berlin. Parts of that public institution now house two private collections, the Sammlung Marx of Erich Marx and, since 2004, the much discussed Friedrich Christian Flick Collection.

Are museums are losing the battle for artists? Today we have more large private collections of contemporary art then ever. We have private galleries that are larger than some museums, doing blockbuster shows. Meanwhile, museums are re-selling parts of their collections and private collectors are hiring curators and consultants to “direct” their collections. Collectors are even building their own museums.

Leipzig director Barbara Steiner says in the introduction to the Carte Blanche project:
“In view of the most recent developments, the often undue influence of collectors, gallery managers and other enterprises on facilities funded by the public purse seems less of a problem than the tendency for private individuals gradually to lose interest in these museum.” She wants to find out “whether new partnerships between public bodies and private supporters can be created at all, how such an interaction might look, what the consequences of such forms of cooperation would be for the development of art and its institutions, also when considered against the background of the establishment of our institute.”

Is there an American view on this? Will private influence destroy the public sphere? Is there too much influence already from private collectors in your view?

p.s. Full disclosure (before I get hunted down by Tyler Green): one of the artists featured in the opening show and in a double solo show later this year, Mark Lombardi, is represented by Pierogi. I work as a director of Pierogi for their Leipzig gallery.

On a recent visit to Los Angeles, I made a pilgrimage to Takashi Murakami’s mid-career spectacular at MOCA. You know, the one with the handbag shop in the museum (and a copyright sign in the show’s title). I wanted to taste that smiley-face Murakami vibe. And having heard all the hullabaloo about the handbags—offered for sale by the good people at Louis Vuitton not in the gift shop, but inside the actual gallery space—I wanted to contemplate the crossing of cultural thresholds never before so brazenly tested. So, on a surreally warm, sunny Christmas Eve, I pointed the car’s navigation system to the Geffen Contemporary.

I came to the museum with an open mind. Messing around with boundaries is a legitimate pursuit, after all—I’m all for it. We Artworldsalon types get easily excited when it comes to novel genetic mutations and cross-pollinations between art and commerce. But I came away with mixed feelings; feelings that probably make me sound like a woolly old mammoth.

About the most generous way to see the Louis Vuitton boutique implant is as a canny and effective performance piece. It takes the art of audience participation to a new level. People are invited to walk into a symbolically charged space and offer up a kind of sacrifice, i.e. money, in return for objects of demonstrable (because someone is paying) cultural or emotional value. There is a theatrical, performative, staged quality to the experience. Kind of like church.

I watched as a young Asian fellow with two attractive female companions whipped out his credit card and charged $3,000 for three handbags. They looked like dancers in a trance, speaking barely a word. The girls at the counter played along with feline elegance in the finely choreographed ritual exchange, in which everyone seemed to know their part. And I thought to myself, “He may as well have cut a vein and drawn a pint of blood.” Eliciting that profound response, that level of commitment, says something powerful about these objects. Don’t we all want people to respond to art in such a tangible way?

But that may be giving Murakami too much credit. Ever since the visit, I can’t shake a sense of disquiet about the store-in-the-museum concept. I have been trying to get to the bottom of it, but I couldn’t pin it down until I came across a statement by John Baldessari in a conversation (artreview.com, Jan. 5) with Artworldsalon regular Jonathan Neil. In the interview, Baldessari talked about how “art has become more entertainment,” and about the Murakami show he had this to say:

I’m on the board of trustees at MOCA – not that I go, but I do go to a few meetings – and you realise when you get in there, in the midst of it, that these museums are about ticket sales, and they have to have blockbusters. So what are we doing at MOCA? – Murakami. Man, that is going to bring them in. Now do you think if you had an Ad Reinhardt show that that would bring them in? I don’t think so. Could you see a Reinhardt on a billboard? But it’s more and more like that. And it’s perfect. Because there’s a huge Asian community: that’s going to bring them in. Murakami is like Warhol: that’s going to bring them in. And then this argument – I had to laugh – but Paul Schimmel said, “We’re going to have this Vuitton shop, and it’s going to be functional, because that’s part of his practice”, and I said, “Well wait a minute, part of your practice, alright, so you have the same show – but one of [Adolf] Wölfli, are you going to have a mental institution inside?” No, you wouldn’t have to, it is a mental institution!

So which is it? A savvy cultural investigation into the relationship of art and commerce? Or just another way to sell a handbag?

Well here we are, and it’s bigger than ever. Collectors seem to be undeterred by the housing crisis and Wall Street jitters, and by all accounts they are spending freely. Most of the dealers I have talked to were happy already by the end of Tuesday night. Several of them evinced an air of unfeigned relief, even surprise. By late afternoon Wednesday, when the waves of VIP previews had washed through the main fair and the UBS VIP Collectors Lounge had filled up with well-heeled and scantily attired jetsetters, the best pictures were gone. It’s hard to say who was buying what, but collectors with European and South American accents seemed to be smiling the most cheerfully. With their discounted dollars, they had good reason.

Trends thus far are hard to discern, notwithstanding the diminished presence of photography in the main fair. The trend of the year is without doubt the continuing metastasis of the Miami art fair phenomenon, which has mushroomed beyond all sense of proportion or restraint. Along with it, so has the devouring of the event’s artistic core by eager and shrewd marketers of luxury products. For the party goer, this is a good thing.

A full accounting of the art offerings is still in the distance because several of the fairs have just begun accepting visitors. The cliff notes version of the buzz is this: The big fair has quality art but is predictable; Scope is a bust; Nada is solid; the Miami Art Fair is bo-ring; and Pulse is really fun. For those who care about art, the private collectors have once again thrown out a lifeline in the form of well-curated exhibitions. Although the array of heavy German art at the Rubell Collection was a bit much to take in the Florida sunshine, that show, along with the outstanding installation at the Margulies collection, provided reassurance that somewhere underneath all the preening and the elbowing there is a genuinely committed art culture here, and it’s going from strength to strength.

I am in a position to reassure everyone, meanwhile, that the sybaritic aspect of the Art Basel Miami Beach is bigger and badder than ever. European luxury goods purveyors, especially, are outdoing each other to capture the attention of the fairgoers. Krug champagne has a lovely white balloon with a bespoke gondola basket outfitted by a designer of private jets and yachts. Cartier threw a glamorous jewel-studded bash at a custom built hurricane-proof geodesic dome. Something of a synthesis of the high intentions and commercial ambitions of all that happens here was afforded by my final party stop last night, around midnight, in a cavernous factory building near the Design District, where Zaha Hadid was presenting her new line of furniture. The tables, benches and shelves are devoid of function — you can’t actually sit on them or place a book on them — but they sure look good in all their aerodynamic, bronze-coated slickness. The price of the smallest bookshelf: about 30,000 dollars.

Calvin Klein, Tamara Mellon, Donna Karan, Laudomina Pucci, Vivienne Tam, Kenzo, David LaChapelle, Doug Aitken, Jack Pierson, John Currin, Kehinde Wiley, Terence Koh, Dennis Hopper, David Byrne, Keanu Reeves, Steve Martin, Russell Simmons, Lou Reed, Jerry Speyer, Eli Broad, Steve Cohen, Peter Brant, Beth Rudin DeWoody, Aby Rosen, Larry Gagosian, Mary Boone, Andrea Rosen, Barbara Gladstone, Lisa Phillips, Tom Krens, Michael Govan.

What do these people have in common? They’re all going to Miami, of course.

“In ten days,” as fellow Salon writer Steve Kaplan wrote in our recent thread on why people collect, “this culture (or sub culture) will descend in all its sound and fury upon Miami. The attendant rituals of conspicuous consumption, of snubbing and embracing, of preening and prowling, of “perilous journeys across the seas separating the small islands”, might even give the Trobrianders pause. And one can only imagine what an observer with the sensitive antennae of a Malinowski or a Levi-Strauss would make of it all, trudging down Collins Avenue, notebook in hand.”

So, why are YOU going? What are you expecting to get out of Art Basel Miami Beach? What are you excited about? What are you dreading? What are your must-go exhibits, special events, parties? What’s your strategy for making it through the fair and how will you make sense of it all? Please send your thoughts and best advice.

As long-time readers know, I like to conduct experiments with my students to test the notion that a group is able to make more informed judgments than any single expert. Last fall’s experiment, involving the Klimts in the fall sales, was a stellar success. Our first experiment of 2007, concerning the Van Gogh in last week’s auction, was an unmitigated bust, since no one allowed for the possibility that the painting would find no buyer. But now I have good news that will restore your faith in the wisdom of crowds.

Four weeks ago, I asked the students to write down their guess for the hammer price of Francis Bacon’s “Second Version of Study for Bullfight No. 1.” The painting was bid up this Wednesday to $41 million (plus commission). The median estimate returned by the roughly 60 students was $42 million. Although their estimates ranged from $7 million to $120 million, no fewer than five of them got within a million dollars of the price. Maybe this technique should be used more broadly in setting sales estimates?

There can be little doubt that the incessant whispering about the inevitable decline of the art market will erupt into a roar today as Sotheby’s stock begins its tumble after the venerable house’s Impressionist and Modern Art sale fell nearly $86 million short of its $355.6 million low estimate. Sure Christie’s beat its low estimate just the day before by roughly $46 million, but of course that’s not news. Or is it? Can it be true, as Andrew Fabricant mentions in the New York Times, that “this was not some watershed moment in the market. It’s what happens when the pricing is extremely aggressive and the material less than stellar”?

Quite often we like to dismiss the money that is thrown around at the upper reaches of the market as so much conspicuous consumption, an indication of the Collectorate’s obsession with image rather than substance. But does the asymmetry between the Christie’s and Sotheby’s sales indicate a more discriminating taste at work? Are we witnessing the return of Homo Aestheticus after the reign of Homo Economicus?

As 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?

One of the most disquieting anecdotes I remember hearing about Sept. 11 — and I sincerely hope it was a myth, born in a moment of despair and chaos — concerned some phone calls that the Manhattan Hermes store allegedly received that very morning from fashionable hopefuls wondering if they might have advanced a few tiers on the waiting list for a certain coveted handbag. The accessory in question was the iconic Kelly bag, and it just made history again — exactly one day after the sixth anniversary of the tragedy.

Last week, Christie’s London auctioned off the most expensive handbag ever sold, for 31,200 pounds sterling, or almost $65,000, roughly three times its original estimate. The bag has been described, intriguingly, as “Louise McBain’s handbag,” and in more technical parlance, as a “Rouge ‘H’ Crocodile Kelly Bag with Gilt Hardware.” Unlike Mr. Hirst’s diamond skull, this is a documented sale (98% of the lots found buyers at the sale, entitled From City Chic to Alpine Retreat, Holland Park and St.Moritz), and it will certainly be interpreted as a sign — but a sign of what?

August jitters yield to back-to-school confidence—at least for now. After a rash of premature obituaries, the art market is humming briskly again and news of epic sales fills the air. Even Damien Hirst’s diamond skull has found buyers (including, so it is rumored, the artist). Its fate as the shimmering emblem of early 21st-century excess is now sealed.The question now is whether the art market is headed even deeper into record-breaking territory as the last refuge of investors and speculators, á la 1989, or whether it is already on a sliding path toward a landing—soft, hard, or otherwise? It is a delicious moment, pregnant with wildly opposing possibilities.

Reading the posts of the last few weeks, one longs for clearer metrics. Are there more reliable early indicators of yet another exuberant season of sales? Or conversely, are some “canary-in-the-mineshaft” indices registering advance tremors of a downturn?

Our debate on guarantees offered few clues. Reluctance to offer guarantees would parallel the lending caution that engulfed the financial markets in late summer, but our panel found no proof of such reluctance (auction guarantees this season are, in fact, expected to run into the billions). Daily reports of new gallery openings and museum ventures similarly belie prognostications of impending doom.

The problem is that some indicators of change can be interpreted as harbingers of squarely opposing trends. What exact conclusion would be drawn from evidence that dealers are getting more calls about placing works quietly, or taking pictures back on consignment? If a spate of exceptionally high-quality pictures were to come to market, would that be seen as a sign that sellers are trying to slip through a closing window of opportunity? Or would it be seen as evidence of the health of a market that is coaxing even the most beloved masterpieces off people’s walls? What is the exact interpretation of trimmed museum acquisition budgets? What can we read into shorter or longer waiting lists? Are dipping or spiking art school applications advance indicators of growth or decline?

As we begin a season of many likely surprises, can this panel suggest clear signs of what’s ahead?

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?

The three co-founders of Artworldsalon intersected in London last week. Two of them went on to ogle Damien Hirst’s diamond studded skull, about which a report shall soon follow, and which is undeniably the talk of the town. Visitors particularly seem to appreciate the gesamtkunstwerk atmosphere. It’s not just the skull but the full-court theatre around it, including the thuggish Mafia-style security guards. More on that carnival attraction from the eyewitnesses who saw it.

The real eye candy for me this summer in London was at the National Gallery, which has organized a spellbinding show of Dutch portraiture, a true diamond gem of an exhibit. A less noticed visual art event awaits at Heathrow airport. A slick video about security procedures now playing on a row of flat-panels right above the baggage X-ray machines is a sight to behold. It looks like it was produced by Matthew Barney in collaboration with the people who make Apple’s iPhone commercials. Slow-motion shots from edgy avant-garde camera angles (e.g. bird’s eye view of gorgeous passenger walking through metal detector) capture models of attractively blended origin as they glide through the ritualistic passage of belt removal, laptop opening, and body frisking. Their dignified countenance and beatific smiles radiate an inner calm, as though they were being cleansed; suspicions erased, innocence reasserted.

Anyway, on to matters at hand. One of the delights of airplane time is the freedom to read even the smallest articles in The Economist, including the little teaser for their blog, Free exchange, which on June 26 posted a fascinating roundup of variables shown empirically to influence the prices of paintings. Quoting from Tyler Cowen’s latest book, Discover your Inner Economist, they posit the following relationships:

“1 Landscapes can triple in value when there are horses or figures in the foreground. Evidence of industry usually lowers a picture’s value.

2 A still life with flowers is worth more than one with fruit. Roses stand at the top of the flower hierarchy. Chrysanthemums and lupines (seen as working class) stand at the bottom.

3 There is a price hierarchy for animals. Purebred dogs help a picture more than mongrels do. Spaniels are worth more than collies. Racehorses are worth more than carthorses. When it comes to game birds the following rule of thumb holds: the more expensive it is to shoot the bird, the more the bird adds to the value of the painting. A grouse is worth more than a mallard, and the painter should show the animal from the front, not the back. Read More »