Article 23--Are we really going to sell our work if these won't even sell?

The Art Market Is Back? Now That’s Surrealism

• Article
• Comments (2)

THE WEALTH REPORT HOME PAGE »

• Email
• Printer Friendly
• Permalink
• Share:
  • Yahoo! Buzz
  • facebook
  • MySpace
  • LinkedIn
  • Digg
  • del.icio.us
  • NewsVine
  • StumbleUpon
  • Mixx
• Text Size

By Robert Frank

Say what you want about art dealers. They have a special gift for coloring the art market in bright shades of optimism and price increases.

What are they smoking?

Take Wednesday night’s auction of Impressionist and Modern art at Chrisities. It was, by any serious measure, a disappointment. Most of the works failed to sell for the top estimated price. One of the most-featured works, a 1928 Max Ernst painting that was expected to fetch as much as $9 million, was pulled the day of the auction.

A Picasso, “Femme au chapeau,” that was expected to sell for $8 million to $12 million, sold for $7.8 million.

And yet the art world would have us all focus today on the single blockbuster headline: “Picasso Sells for $14.6 million.” That would be the “Mousquetaire a la pipe,” which was expected to sell for $12 million to $18 million. (The seller was Jerome Fisher, the Palm Beach, Fla., Bernard Madoff victim and Nine West founder made famous for his Mar-a-Lago altercation with Madoff-feeder Robert Jaffe.)

By this reading, with one single painting, presto, the art market is back.

“There’s pent-up demand to buy,” New York dealer David Nash told Bloomberg.

“People have their confidence back,” said another dealer, Christophe Van de Weghe.

The Picasso sale featured somewhat unusual economics. Christie’s paid a multimillion-dollar guarantee to the seller and another undisclosed investor bought that guarantee. As my colleague Kelly Crow points out in today’s Wall Street Journal, that investor helped bid up thepainting during the auction, and got a share of the upside on the sale.

Still, the fact is, Sotheby’s auction on Tuesday night and Christie’s auction Wednesday night were shadows of their former selves. The only thing that is “back” is the relentless hype and surreal economics of the art market.

Christie’s sales total of $102 million was a huge drop from last year’s spring-auction total of $277 million. Sotheby’s auction experienced an even steeper decline, to $61 million from the $223 million last November. Sotheby’s failed to sell its two most-prominent works, a Picasso and Giacometti.

What is more, the auctioneer’s bonds have been reduced to junk status, with Standard & Poor’s expecting that Sotheby’s business will remain depressed for the next 12 months. Many wealthy art buyers, it seems, are spending more time staring at their gutted investment statements than they are looking at art for their walls.

Maybe the market will recover faster than that, given the stock market’s recent rally. But these days, I would sooner trust a credit-rating provider than an art dealer.