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?

Another record bites the dust

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?

Metrics of zeal or woe

tornado.jpg 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?

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?

Summer math camp

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. Continue reading “Summer math camp”

Bubble happiness

Who says bubbles are bad? Not Daniel Gross, financial columnist for Slate, who just published a pithy tome etitled Pop! Why Bubbles are Great for the Economy. The book doesn’t contain a word about art, but its conclusions are worthy of pondering. His message: sure, bubbles create a huge mess when they pop, but the energy and innovation they generate while they last is worth it. Here it is in a nutshell:

“[Besides,] if some omniscient Bureau of Management were tasked with the capacity to halt enthusiasms before they go out of control, we wouldn’t necessarily want it to do so. ‘I hold it, that a little rebellion, now and then, is a good thing, and as necessary in the political world as storms in the physical,’ Thomas Jefferson wrote to James Madison in 1787. In the economic realm, a little rebellion, now and then, is a good thing, too. And bubbles, entrepreneurial storms that disrupt the existing commercial order, provide shots of adrenaline. The enthusiasm they generate has led successive generations of entrepreneurs to open new territory for settlement, to create valuable new infrastructure, to spur innovation, and to push people to work, invest, and spend at a higher level—all in pursuit of promised massive short-term gains.” (p. 188)


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 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.

Newbies: Cruising for a bruising

cruiseship.jpgAlmost a month ago, loyal Artworld Salon reader Gallerina sent me a link to this article detailing controversy surrounding Park West at Sea, an outfit that conducts art auctions aboard 70 cruise ships, with lots including editioned pieces drawn from the oeuvreds of Picasso, Renoir, Dali, Erte and Toulouse-Lautrec, among other name-brand artists. The investigative piece by Arizona Republic reporter Dennis Wagner reads like a caveat emptor aimed at art-market newbies. It starts thus:

Like thousands of tourists, Gary and Olga Holloway went on a Caribbean cruise for relaxation. The Scottsdale couple also wound up learning about fine art thanks to Park West at Sea, a company that conducts onboard auctions. Before the trip was over last June, they had spent $17,836 on three limited-edition prints by Rembrandt van Rijn, plus one by Dali.

Gary Holloway was thrilled with his sophisticated investment, backed by appraisals and letters of authenticity.The works showed a total “retail replacement price” of about $24,000. Holloway figured he had actually made money while on vacation. Back home in Arizona, he enjoyed looking at the artwork for six months, then advertised it on eBay. He got no bid over $1,000 and was puzzled to find similar prints offered for one-quarter of his purchase price.

Wagner also reports, that Nevada steelman Jim Russell bought a Jules Cheret chalk drawing for $24,700, then discovered online that Park West had recently bought the drawing for $2,000. Park West lawyer Morris Shapiro’s response: “Surely, Mr. Russell could not reasonably think that he was buying ‘at cost,’ especially in a competitive auction environment. Respectfully, Mr. Russell bid and paid what he chose to bid and pay.” Continue reading “Newbies: Cruising for a bruising”