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…

As we ponder who has been buying what at Miami, this has come in from Michael Hatch in Beijing.

The markets for Western contemporary art and Western modern art are often assumed to be universally engaging across national and ethnic borders, but I’d wager the vast majority of buyers are caucasian, reflecting the dominance of Euro-American artistic traditions, and reflecting the historical dominance of Euro-American economies.

The market in Indian art, however, is said to be driven almost entirely by Indian collectors; and the main buyers for both classical and modern Chinese art are Chinese or Chinese diaspora. Though the spectacular growth in prices for contemporary Chinese works has been largely driven by Western buyers, one hypothesis is that some of the mainland Chinese currently investing large sums in real estate and stocks might soon turn their attention to chinese contemporary art and become the dominant force in this market.

I wonder, therefore, to what degree ethnicity, nationality or cultural affinity play a role in driving particular art markets? Are particular markets dependent on those who have a cultural affinity with those works? If so, are the movements of any given art market only really affected by the economic movements of the home market? If that is the case, will the predicted downturn in the Western art markets that is supposed to follow the current economic doldrums in America affect the markets in Chinese or Indian art?

Thoughts anyone?

According to the London Observer, Dr. Charles Saumarez Smith, outgoing director of Britain’s National Gallery, had this to say recently about his difficulties raising money from the government: He did not want his institution to end up like “the National Gallery of Budapest.” He was worried his museum would be left “endlessly reshuffling the works it already has.”

Being in Budapest at the time of those remarks, I can report they didn’t ruffle many feathers. Rather than pretending to be a comic emblem of artistic failure, Hungarians are busily rebuilding an artworld from the mess left behind by communism. There’s a long way to go, but signs of progress are everywhere. Among them is a promising changing of the guard at several top institutions and a de-politicization of culture in general. State money doesn’t flow to the arts as lavishly as at points west, but museums are getting facelifts, and yes, some are acquiring.

New facilities are coming online, from the Ludwig Collection on the Danube embankment, to a private museum near Lake Balaton founded by a bespoke shoemaker with a passion for collecting, to the sleek 1950s bus depot in the heart of Budapest that’s supposed to become a new design museum. Corporate support is kicking in. Private money is on the way, if the frothy auction market is an indication. Patronizing the arts is newly fashionable.

As far as the National Gallery of Budapest – properly called the Hungarian National Gallery – is concerned, Dr. Smith’s condescending comparison is somewhat misplaced. Read More »

Noticed: title creep. On two sides of the Atlantic, similar words are being applied to visual extravaganzas tied to the 1956 Hungarian revolution.

A billboard in New York’s Times Square last fall declared, “Our Revolution Was Not a Movie” (it was put up by the Hungarian Cultural Center to commemorate the uprising’s 50th anniversary). And this April, the Norwich Gallery will open an exhibition titled “Revolution is not a Garden Party.” Gee, really?

And for a little bit of inside baseball, which didn’t make it into the press release: one of the Hungarian artists in the show, Péter Rákosi, is a namesake of the dictator whose regime the uprising intended to topple.

The Hungarian art market is being reshaped by the same two fundamental forces that are changing the art market everywhere: the appearance of tremendous amounts of wealth and concomitant purchasing power (and need for social validation), and the inexorable drying up of inventory in pre-contemporary markets. Thus, prices escalate and collectors’ interests shift from old to contemporary, where inventory is theoretically boundless. After some major auction milestones in 19th and 20th c. masters, there is now vibrancy in the contemporary market as well. Formerly scattershot gut-impulse buyers are starting to purchase on a scale that may be called “collecting.” A notion is beginning to take hold among successful men and women that, through a methodical pattern of purchases, you can build up a collection with a specific identity. The thirty-somethings and forty-somethings at the upper echelons of business and finance have been exposed to the west. They have traveled, studied, and lived abroad. They speak languages and know the cultural codes. They’re paying attention, and they want to emulate the symbolic patterns of behavior common among the wealthy in the west.

Last spring, I visited a celebrity fundraising auction at the Budapest Kunsthalle presided over by a Habsburg princess. There was no gap between what I saw there and what you would perceive at any similar event in New York or London. Erika Deak, a dealer of the younger generation, reports Read More »

Budapest: the city continues to wake up, artwise. There is no shortage of money, and this helps. A friend reports brisk sales of Porsche Cayennes and other luxury cars, which are everywhere. Thousand-dollar handbags can be purchased (and are being purchased even by Hungarians) at the new Louis Vuitton store next to the opera house, which also diligently displays the Olafur Eliasson Eye in its window. The art market is also coming to life. Last fall saw the million-dollar sale of a small painting by Tivadar Csontvary Kosztka, the wonderful and woefully under-appreciated mad pharmacist who was Hungary’s answer to Van Gogh.

Pictures of Csontvary can be viewed at the Museum of Fine Arts which is currently showing its own Van Gogh exhibition, the first ever in the country with dozens of smaller and major works set in a unique viewing gallery where pictures are set in triptych-like viewing booths in which people can look at works undisturbed by the hordes of visitors. (A space-age entryway has been installed at the gallery, with pneumatic double doors which first let you into a tiny cubicle, close behind you, then open in front of you.) There is the requisite cinderblock-sized catalog. The show is the first major exhibition to receive full-on corporate funding (from ING) — it all looks and feels very western. Best of all, Van Gogh did the museum a favor in having a name consisting of seven letters: precisely the number of spaces between the vast pillars on the museum’s facade, which are now filled with giant banners, one for each letter. The whole paraphernalia of modern museum marketing is in evidence.

Across town, the Ludwig museum is humming along on the Duna embankment. It’s part of a mega office-apartment park development where the developers installed a controversial cultural block. One element of it is Europe’s ugliest cultural building, the spectacularly awful Read More »