January 14, 2004
Market Correction
Before I get into all the nasty art/$$$ gossip, first take note of how beautiful the painting above is (and i don't even really like painting). Picasso was 26 when he made it. Hot hot hot. Now lets get into the juicy stuff, i know it's crass to mix money and art (at least publicly) but fuck it; I watch reality TV too...
According to The Times [nytimes.com, registration required, etc, etc] it appears that the (art) auction market is set for a rebound built on the back of the Whitney Family collection going up for auction in February. The article does not specifically mention that this could have any correlation with contemporary art prices / market trajectory, however it has that vibe/under-current (to me anyway). I call bullshit on that. This is, of course, a special sale being that it is from a single collection and is "out of season", in the past special collection sales have had a negligible effect on the market as a whole (as a caveat: often collections like this are put on the market when it is felt the market will be receptive (ie. Shit will sell high/the market is booming) this point is alluded to in the article by the seller’s rep.). In any case it will be interesting to see if the results match the projections. There is some buzz (reflected in the article) that the painting above (Picasso's "Boy With a Pipe" (1905)) could become the most expensive painting ever sold at auction (topping the $82.5 million paid in 1990 for van Gough's "Portrait of Dr. Gachet" (actual auction price was $71 million with Sotheby's pocketing the difference).
The report fails to mention that the season that the Gachet sold to Ryoei Saito for that record price (along with Renoir's "Au Moulin de la Galette"), the rest of the auction results were at best "iffy" and history (according to the dubious but entertaining Anthony Haden-Guest) has marked the huge sale of those two paintings as the Death Rattle (paddle?) of the uber-hot 80's art market. Once again, past performance, blah blah blah and all that shit they say at the end of a merril lynch ad.
Another interesting aspect of the article which is not fleshed-out has to do with the guarantee that Sotheby's has reportedly made to the seller for a total sale price of around $200 million. These guarantees were huge trouble for the auction houses during the market correction of the early 90's,and if the market is turning again, unbeknownst to them, it could be again. That problem was exasperated by the fact that the houses were also loaning buyers the $$$ for these huge purchases with the piece of artwork in question as collateral. If the buyer defaulted and the market dipped there was no way for the auction house to rob Peter to pay Paul and they were left holding the bag. This was one of the reasons that the two major houses started colluding with each other (which got them busted for unfair business practices in the late 90’s). The houses say they no-longer allow loans with the work in collection as collateral unless the buyer fronts 50%, but word on the street is they are getting greedy again.
Conclusion: This single sale probably means very little for the market at large (esp. for the contemp. market) however it will be fun in a visceral, I am an american, I like to judge everything by its price, size etc. kind of way. The pictures will also be on view at Sotheby's and they are generally fairly chill (as far as snotty auction houses go) about letting you go in and view stuff before auctions even if it is clear there is no way you will be bidding.
Posted by thickeye at January 14, 2004 10:47 PM