An Auction of a Lifetime

Well, Christie's has done it! They've pulled it off, maybe saved their company, maybe saved the whole art world. We'll have to see. 

What they did do is they managed to sell $477 million dollars - that is 96 percent of everything offered - worth of art, furniture, goodies, etc. Major winners include the two Qing dynasty bronze heads for $40 million, a dragon chair for $28 million

“This was a once-in-a-century sale,” Hugh Edmeades, deputy chairman of Christies South Kensington, said in an interview. He has been involved in single-owner collections at the London-based auction house since the 1980s and said, “I can’t remember anything like it. I’ve never seen people queuing for hours to view an auction before. Patriotism was definitely a factor.”

It is certainly something that I will remember for a long while. And hopefully it will be one part of the puzzle that pulls the art market out of its downward slump. But we've got to remember that this is a single person sale - and I don't see YSL dying again any time soon. It was Christie's one big chance and opportunity but it was also a one off deal. Hopefully they can continue taking risks, working hard, and making the art market work to their favor. We've just got to keep our heads up and everything will be ok. 

Is the Art Market Dead?

Everyone has been talking about the demise of the art market since the stock market collapse in October. My opinion of the whole situation probably doesn’t vary too much from other things that you’ve read recently, but I’ll lay it out all the same.

The art market is a market like any other Adam Smith, Invisible Hand-wielding capital structure. It is lodged firmly in the structure of basic free-market economics, governed by the principles of supply and demand. That is, an optimal price is reached when the forces of supply (how many people want a product) and the forces of demand (how many are available for people) collide. People may think that the art market differs from say the market for canned soup because it is not an easily commodifiable good – not every piece of art is exactly the same and so the process of valuation differs per product. Or by the value we derive from art is not just an easier understood Utilitarian value (the more we have of something the better) but is consistent with value as it pertains to ineffable values of cultural capital. While this does make the art market far more complex than other markets it doesn’t make it any different.

 

In any market there have been booms and busts. Booms come about when consumer confidence is especially high and people are willing to wage more money on the fact that the product is going to increase in value. Often times these are built up artificially high by speculators – or those who are not really involved on a personal level in a product but are merely trying to “flip” the good and reap the benefits of the spread. It is a bit like arbitrage in the general market. Once consumer confidence falls apart (it could be anything from a 9/11-like attack, withdrawal of “free-money” in the form of credit, etc.) all these speculators pull out of the market and thus the prices tumble very rapidly. This leads to a bust. We’ve seen it most recently in the credit market and the house market (indirectly) in the US, but also during the dot com era, and in any number of other consumer goods. 

 

I will go into more detail on this later, but essentially, I believe that the art market was highly inflated. And the art market is particularly susceptible to inflation because the means of valuation rests solely on the shoulders of public opinion and consumer confidence – it is little to no intrinsic value. People had been so confident in their artworks as to push the prices waaay high up until they could no longer sustain themselves. I see a major reorganization of the whole market in the coming future and a return to 1990s level. 

New York, New York

Being back in the city that never sleeps never fails to elate me. I am going to be starting up with school again, new classes, new reading, new year, new president, new everything! So I thought I should go with the spirit of the new year and get out there and see some new art and galleries. I've been to Chelsea several times before but it doesn't fail to intimidate me. The "gallerinas" are as intimidating as ever with their designer clothes and scowls (do they hire them because they have such nasty looks on their faces?). I wondered if things would get a bit more friendly as the economic downturn pulls into its third, fourth...fifth (when will this even be over?) month. 

Art sales are noticeably down but either these girls can't seem to understand what it means to welcome someone into a space or their faces really are just stuck like that. Last month at Art Basel, dozens (if not hundreds) of galleries felt the sting of diminished pocketbooks and shocked stock portfolios. Fortunately, few people's hopes were high enough to warrant any real shock at the result. 

What will happen, I think, is that the galleries that have gotten lackluster results even in high times will be whittled away until only the strongest and most innovative survive. They don't call it Survival of the Fittest for nothing.  We are going to see some major changes in the coming months and years. The question stands as to what sort of changes and innovation will save the gallery (and what form it will take in the coming future).