ASA Annual Conference - July 12 -1 5, Orlando, FL

Judith Vance, ASA sent me a reminder of the American Society of Appraisers Annual Conference, July 12 - 15 in Orlando, FL. The program looks very good. For more information click HERE.

The personal property program sessions follow:

Personal Property Sessions

Monday, July 13

Multidiscipline Sessions

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Tuesday, July 14

8:30 a.m.—9:30 a.m.
IRS Regulations Specific to Personal Property

Peter Barash, ASA Governmental Relations Consultant

This session will provide an update on the latest IRS regulations that pertain to personal property. A question and answer period will follow the presentation.

9:30 a.m.—10:30 a.m.
Appraisal Document Control and Electronic Signatures: Protecting Your Work

Joni Herndon

This session will focus on protecting the work product, avoiding problems with electronically transmitted reports, and avoiding professional identity theft.

11:00 a.m.—5:30 p.m.
Off-Site Trip: Tiffany Study Morse Museum, Winter Park, FL

Note: This event is open only to Personal Property appraisers registered for Tuesday, July 14. It is not available to conference attendees in other disciplines or to companions.

Participants will tour the permanent collections of work by Louis Comfort Tiffany, including paintings, designs, glass and more. This collection is one of the largest in the world and showcases his artistry and genius. Curator lectures will be featured, as well as time on your own for self-study. (Bus departs the hotel at 11 a.m. for the museum. Lunch on your own at restaurants surrounding the museum, prior to meeting at the museum at 1 p.m. for the tour. Bus departs museum at 4:30 p.m. to return to hotel.)

Noon–1:00 p.m.
Elective Event: Media Training in Social Networking

Lisa Schaumann, Bendure Communications

Learn how to use blogs, podcasts, Facebook, RSS feeds, LinkedIn and Twitter to reach new audiences for your appraisal services.

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Wednesday, July 15

8:30 a.m.—10:00 a.m.
Report Writing, USPAP Standards 7 and 8

Sandra Tropper, ASA, Artemis Inc.
Frances Zeman, FASA, Appraisal Resource Associates Inc.

This session will cover the 17 points of an appraisal, as well as briefly review the parts of an appraisal report that are required by ASA. The presenters will point out the requirements that are/are not imperative in a USPAP-compliant appraisal. Other requirements for reports from laws and/or regulations will also be noted.

Learning objectives include gaining an understanding of:

• The 17 points of an appraisal
• Current terminology for personal property appraisers

10:15 a.m.—11:15 a.m.
Art Theft and Due Diligence

Sharon Flescher, IFAR Executive Director, New York

While the legal issues surrounding art theft and due diligence may, on the surface, seem straightforward, that is not necessarily the case. Statutes of limitations, for example, vary by jurisdiction, and there is no clear legal definition of what constitutes diligence, let alone “due” diligence, for either the theft victim or purchaser. This talk will elucidate these issues by drawing on several legal cases in which art theft, due diligence and good faith purchasers played a role. Learning objectives include gaining an understanding of:

• How the statute of limitations regarding art theft varies by jurisdiction, and in what way Common Law and Civil Law countries differ regarding legal title to stolen art
• Why the concept of due diligence is not clearly defined
• How the case law regaring art theft has differed in its treatment of "good faith" purchasers

11:30 a.m.—12:15 p.m.
How To Talk to the Media

Lisa Schaumann, Bendure Communications

This session will describe how ASA works with the media—pitching stories, doing crisis communications, and dealing with ethics issues—and how media relations can be used to benefit your business.

Learning objectives include gaining an understanding of:

• ASA's successful personal property media relations program
• The dos and don'ts of working with the media
• How to get media coverage for your business

1:15 p.m.—4:00 p.m.
Fakes, Frauds and Due Diligence

Panel Discussion
Susan Golashovsky, ASA (Folk Art)
Sharon Kerwick, ASA, Kerwick Appraisals (Oriental Rugs)
Louise T. Hall, ASA, L.T. Hall Appraisals Inc. (Antique Furniture)
Daphne Rosenzweig, Ph.D., ISA, CAPP (Asian Antiques)
Tim Luke, ISA, AM (Collectibles)

This panel discussion will address the dilemma that appraisers often encounter when the client's property has been altered, misrepresented or faked. Each panel member will discuss his or her specialty area, providing examples of situations to be aware of, common "red flags" to look for, valuation issues to be addressed, and how to conduct due diligence. A question and answer period will follow the discussion.

Government Confiscated Property

The NY Times recently ran an interesting Op-Ed piece on the seizure of personal property from Bernard Madoff. A group of victims were attempting to pursue an involuntary bankruptcy in order to seize the personal property from Madoff. Federal prosecutors persuaded the Judge to stop the involuntary bankruptcy and allow the assets to be collected by the government for restitution to the victims of the Ponzi scheme. The problem is the Op Ed piece states it is highly unusual that government confiscated property is returned to the owners or victims. It is an interesting article and sheds some light on the government process of the confiscation of property. We as appraisers typically here of government sales of seized property, some of us even work for the government in appraising these items. The unfortunate part is that after the confiscation, little of the proceeds appear to find their way back to the victims.

The Op-Ed peice states Most people would assume that this is business as usual, that the government routinely seizes the assets of criminals and returns them to victims. After all, criminals should not have ill-gotten houses, cars and yachts waiting for them when they finish their sentences. But the reality is that the government’s focus on seizing Mr. Madoff’s assets for restitution is unusual. Lawbreakers are rarely forced to give up the proceeds of their crimes. To take just one example: Between stints in prison over the past decade, John A. Gotti, the former Gambino crime family boss, was able to return to his luxurious house in Oyster Bay Cove, on Long Island, where the median house value in 2007 was more than $2 million. Does anyone believe the money that Mr. Gotti bought it with was legitimately earned?

The Op Ed piece continues Congress must also close a gaping hole in the victim restitution laws, which provide no authority for the pretrial restraint of assets of those accused of orchestrating frauds. Too often, dirty money simply disappears into shell companies and impenetrable offshore havens before the trial even begins.

But upon a showing that fraud was probably committed, a prosecutor should be authorized to restrain all of the suspect’s assets; the question of who gets them would be resolved after the criminal justice system has finished its work. The British already do not differentiate between asset forfeiture and restitution. They merge the two concepts and call it asset recovery. We should borrow a page from them.

The Justice Department must also make sure that its state and local counterparts in law enforcement get the training and resources to manage asset forfeitures of their own.

For too long government has been unwilling to take back the wealth that criminals have stolen from taxpayers. We can no longer afford to ignore the opportunities offered by our under-enforced asset forfeiture laws.

To read the full NY Times Op Ed article, click HERE.

Sotheby's SEC 8-K Report

Sotheby's just released its SEC 8-K report and the news continues to be disappointing. The 8-K states that Sotheby's will continue to restructure in 2009 with additional staff reductions of 5%. In addition to the staff reductions, Sotheby's is implementing pay reductions for certain members of senior staff, requiring unpaid employee furloughs and a reduction in the US pension contribution.

Sotheyb's expects to save approximately $24 million annually between the 2008 and 2009 restructuring initiatives, with $15 million being realized in 2009.

Sotheby's also decided to reduce the annual dividend rate from $0.60 per share to $0.20 per share. Dividend payments are expected to be fall from $41 million to approximately $14 million.

To read the SEC 8-K click HERE.

American Association of Museums Holds Annual Conference

Steven Salisbury of the Philadelphia Inquirer reports on the AAM convention being held at the Philadelphia Convention Center. According to Salisbury, the main topic of conversation will be money. The Association of Children's Museums also is holding its conference in Philadelphia, were it is expected nearly 5,000 museum professionals will gather. The groups will discuss ways of raising funds through museum to museum partnering and shared exhibits to long term awareness programs such as working with local community organizations such as public schools.

Most of what is in the article is already known, how the museum associations plan on solving the fiscal problems will be the key.

Salisbury states But despite the multiplicity of interests and the range of institutional sizes and locations, there will be one thing on everyone's mind.

Money.

"That is topic A, B, C, and D," said Dewey Blanton, spokesman for the American Association of Museums, which holds its annual meeting at the Convention Center from Thursday through next Monday.

Salisbury continues So museums, like other nonprofit groups, are in pain. Budgets have been frozen, staffs cut, and costs reduced wherever possible. At the same time, fiscal angst has forced a relentless rethinking of operations and programming. The isolated, high, and mighty temple of culture is out; the networking community partner is in.

To read the Philadelphia Inquirer article, click HERE.

Houston, Texas Art/Auction Gallery to Close - Bankruptcy and Criminal Charges

WKHOU.com of Houston is reporting that the owners of the Hart Galleries have plead guilty to misapplication of fiduciary property. The Hart Galleries website states the business in now in bankruptcy and there will be a final liquidation sale of assets and property.

There appear to be hundreds of victims with a total outstanding value of around $3.5 million at stake. Many of the victims are reported to be part of Houston society. Unfortunately, this is no longer an uncommon story about small regional auction houses failing. I know from personal experience as my parents lost a fair amount when Sloans Auctions of MD went out of business. To ad insult to injury, my father had to repay money that was sent to him prior to the bankruptcy on top of the property that was sold for him, but never paid by Sloans. There were no criminal charges in the Sloans case as there is with the Heat Galleries, but there should be more protection for consumers, such as surety bonds based upon annual sales. I do know many of these smaller houses can run on very thin margins, and it is very easy to slip into the routine of paying consignors with the proceeds of a later sale.

WKHOU report The accused are a husband and wife who, until recently, used to live in a $1.5 million home in a West Houston neighborhood. It was a home complete with private lakes and tree lined streets.

Investigators say that the couple worked at an auction house that catered to Houston’s elite. And that they sold millions of dollars of fine china, furniture and art.

They are the Harts of what had been Hart Galleries.

WKHOU continues It wasn’t until another victim, who expected a $100,000 for a painting, tipped the Harris County DA that something wasn’t right.

An investigation led to felony charges of theft, money laundering and now, the Hart’s have reached a plea deal on a charge of “misapplication of fiduciary property.”

The Hart’s attorneys would not comment other than to say the Harts were sloppy bookkeepers and didn’t even use a computer.

The pair is supposed to be sentenced on Tuesday, but they do have supporters.

As I mentioned in a previous post, it seems many who have been tarnished by scandal remain to have their supporters, as Lawrence Salander does as well.

The Hart Galleries website states:

It is with the deepest regret and sadness that we inform you of the filing for bankruptcy and closing of Hart Galleries and most trusted name in quality antiques, fine furnishings and the decorative arts, not only in Houston, but throughout the Southwest. A reputation earned over the last 68 years, since 1938, by three generations of the Hart Family. Our 50,000 square foot showroom will offer you an incredible selection of antique and new furnishings, fine art, designer and estate jewelry, exotic designer furs, and and exceptional collection of hand-woven Oriental Rugs.

Our entire inventory of fine antiques, rare collectibles, estate and designer jewelry, beautiful home furnishings, Oriental Rugs from around the world and exotic furs must be liquidated over the course of the sale. Additional merchandise from domestic and overseas English, French, and Italian estates will be arriving over the course of the sale.

To read the full article, click HERE.

Private Art Sales

Carol Vogel of the NY Times recently published an interesting article on private art sales. She states as collectors have financial issues and wish to sell all or portions of a collection they are now looking more and more and private sales. The sales typically generate less income for the seller, but allows much more privacy. Sometimes selling a collection in a public auction may have the effect of letting the world know the owner is having financial difficulties. The art world loves to gossip, so private sales are an alternative, but even then word of the sale typically leaks out. Both Christie's and Sotheby's are actively involved in private sales in addition to their traditional auctions.

Vogel states For many sellers, the driving factor is fear. Fear that their friends will discover they need money. Fear that if a Picasso or Warhol, Monet or Modigliani does not sell at auction, it will be considered yesterday’s goods.

If they do not have to, fewer collectors are putting their holdings up for auction at Sotheby’s and Christie’s, where prices and profits have plummeted. But executives at both houses say business in their private-sale departments has more than doubled in recent months.

Even institutions like the Museum of Modern Art are avoiding auctions. This season it has decided to sell two early classic 1960s paintings by Wayne Thiebaud through Haunch of Venison, a gallery owned by Christie’s. In 2005, when the market was nearing its peak, it sold a variety of works at auction at Christie’s for strong prices.

Vogel contiunes So secret are private transactions that confidentiality agreements bind the dealers and auction-house executives. Still, the art world loves to talk, and in recent months among the expensive paintings that have quietly changed hands are a 1970s de Kooning abstract canvas sold for around $30 million; a Cy Twombly “Blackboard” painting for $12 million; one of Gerhard Richter’s “Color Charts” for $18 million; and Jeff Koons’s “Hanging Heart Violet” sculpture for $11 million.

There are exceptions, of course. Estates continue to go to auction because executors have a fiduciary responsibility and prices are rarely challenged after public sales.

For the auction houses, private sales are lucrative and inexpensive. Generally Sotheby’s and Christie’s charge 5 to 10 percent of the purchase price of an artwork, depending on its value and the agreement with the seller. (If a work goes to auction the houses charge sellers 25 percent of the first $50,000, 20 percent of the next $50,000 to $1 million and 12 percent of the rest.) Money earned from private transactions comes cheap, without expenses like advertising, insurance and shipping associated with auctions.

To read the full article, click HERE.

Tech Tip: Antoher Online FIle Conversion Program

I have posted on a few online programs that I have found useful, or at least thought might be useful as appraisers. Some of those programs were online file conversion applets which convert a PDF to a word or text file.

CometDocs takes a full scale approach and has the ability to convert around 50 different file types. It even determines file types with extensions.

The process is pretty simple, browse your computer for the file you wish to convert, select the type of file you wish to convert to, enter your email address and within a few moments Cometdocs emails the converted file to your entered email address. I tried a few files and it worked very nicely. I entered a PDF file and had a choice of converting to a word file, text file, excel, html, writer, calc, impress (the free open office files), autocad, bmp, gif, jpeg, png, and tif.

Click HERE to visit CometDocs.

Local Marketing Power - A Newspaper Profile or Commentary

Stacy Downs of the Kansas City Star has a very good article on appraising along with comments about appraising and valuation from numerous appraisers, including Soodie Beasley of Kansas City who also recently contributed to the Journal of Advanced Appraisal Studies (shameless plug, I know visit www.appraisaljournal.org to order). An excerpt from Soodie's article will appear later in the week, as her article is next in line.

Over the past few days I have posted about keeping websites up to date both in content and with new technology, I also posted about show promoter Bob James of Armacost Antiques starting an online newsletter. All of this is done in order to raise the profile of the appraiser and the professionalism of the field.

Another useful and proven method of marketing services is to participate in publishing and/or newspaper articles. Soodie has written a very interesting article on pioneering women designers in the Journal of Advanced Appraisal Studies and now has professional commentary in the Kansas City Star newspaper feature on appraising and appraisals. In difficult economic times, with many potential clients looking for values, consultations and ways of raising cash, an article similar to the Kansas City Star with Soodie can bring great dividends in the form of increased business.

The article also lists the major appraisal organizations, mentions codes of ethics and understanding the differences between consultations and appraisals, notes that appraisers are paid professionals (imagine that), and lists some of the local Kansas City Appraisers and notes methods for selling items. It also mentions the recent decline in values of many items, mentioning in these economic times prices are off 25%-75%.


The article states The actual task resembles more the forensics on popular criminal-investigation shows than the quick televised “Roadshow” conclusions. Armed with a flashlight, appraiser Soodie Beasley fights spider webs and dust as she peers into the dark recesses of furniture to gauge wood oxidation, an indicator of age and consistency of parts. Her sleuthing includes pulling out drawers to inspect the carcass for dovetails. She also searches for labels to discover a piece’s maker.

“An appraiser must rely on a trained eye,” says Beasley, who specializes in furniture and decorative art appraisals. “Signs of wear must be in a logical pattern and not forced as if someone literally took sandpaper to it. In the old days, pieces were cut by stone, which gives a softer polished edge compared to diamond-bladed tools.”

Beasley’s professional-looking attire, typically a business suit, is usually covered in grime by the time she is finished with an inspection. Her hands get dirty, too, so she keeps a package of wipes in her tool kit, which also includes measuring tape and a magnifying glass.

Then Beasley has to write the appraisal, which includes a market analysis and other research. This often leads Beasley to computer databases or the library at the Nelson-Atkins Museum of Art.

To read the full article, click HERE.

Results: Christie's NY Russian Sale

The other day I posted results from the Sotheby's NY Russian fine and decorative arts sale (click HERE to read). I now have the results from the Christie's NY Russian sale as well. They are surprisingly similar, which I suppose is a good sign as there appears to be some consistency coming back into the markets.

The Christie's sale had 390 lots with 269 selling for a buy through rate of 69%. The sale totaled $13.23 million with an average price of around $49,000.oo per lot. This is down from the sale last year which saw the average lot sell for approximately $69,000.00, and change almost 30%.

Although the consistency between the Sotheby's and Christie's sales, I believe, is a positive as are the sell through rates, I am also not so concerned by the lower price of the average lot. This year the major auction houses have made a decided effort to keep quality high, estimates lower along with an emphasis on greater percentages of lots selling. I think by most accounts, the auction houses in using this more conservative approach are doing a decent job of stabilizing markets.

Pendulm Swinging Back Toward Antiques?

Finally, some positive news for traditional antiques. This NY Times article is Music to my ears, and probably should be to all other antique dealers as well. Wendy Moonan writes in the NY Times on the annual Kips Bay decorator show house (it is actually the previous home of Salander O'Riley Galleries) and how antique furniture is starting to make a comeback with Manhattan decorators. NY usually starts the trends in decorating, so I am cautiously optimistic about the contents of the article and the potential for a renewed interest in antique "brown" furniture.

Bear in mind, the rooms are not all full of traditional antiques furniture, but are a nice mix of the old and new (Photo image - This sitting room by Donald Schermerhorn Interior Design at the 2009 Kips Bay Decorator Show House incorporates English antiques and modern art. (Photo by Charles Eckert). The blending of traditional antiques and modern decorative arts is something I wrote about for Our Town Magazine back in October in support of the Historic Alexandria Antiques show, click HERE to read.

Moonan writes “Clients are asking for antiques more than they did a year ago,” said Matthew Patrick Smyth, one of the designers. “Antiques don’t go out of date. They add freshness and spontaneity to a room.”

Moonan continues English antiques are seeing a revival, perhaps because they maintain their value. “It’s a great time to buy, and there is definitely business out there,” Mr. Howell said. “After the past three months, I am cautiously optimistic.”

Even the modernists have adopted antiques. Juan Montoya has designed a long, tufted gray modular sofa and matching day beds in a contemporary style, then added some classics of his own: a Louis XVI mahogany architect’s desk; an outsize 19th-century white-painted, carved Swedish center table, decorated with rams’ heads; and a set of green and gold Swedish armchairs from the early 20th century.

“I think of antiques as sculpture,” Mr. Montoya said. “They add a viewpoint and break the monotony of hard-edge modern furniture.”

This is definitely some good news for the antique furniture trade. I hope the interest continues and and builds some momentum. Earlier this week I posted on the RICS survey of Arts and Antiques which had some positive indicators as well. What typically can be expected is when "trend setting" NY decorators define a look, it usually picked up by the shelter magazine categories and other decorators throughout the country. Lets hope the trend continues, but some good news indeed. Perhaps antique dealers should start to approach anew and refresh some relationships with interior designers. Perhaps the pendulum is starting to swing back and decorating tastes will start to include more traditional antiques with new decorative arts. In any event, the article is enough to keep a smile on my face for a while, and who knows, maybe some change in my pockets as well.

To read the full NY Times article, click HERE. To visit the Kips Bay show house website, click HERE.

Excerpt from the Journal of Advanced Appraisal Studies

Jo Desmond, ASA wrote a very good article for the Journal of Advanced Appraisal Studies entitled Framed Works on Paper - What to Look for Under the Dust Covers. Jo is an ASA appraiser from Belfast Maine and has 35 years experience as a professional artist, gallery owner, and conservation picture framer specializing in traditional French matting. I believe many appraiser will find Jo's article of great use during inspections.

To order a copy of the Journal click HERE. There is over 300 page and 20 articles all related to appraising personal property. So far I have excerpts from about half of the Journal posted to the AW Blog. More great content and insight from Journal articles to come over the next several weeks.

Excerpt of article by Jo Desmond, ASA


What Could Be Inside

Not all signs of damage are obvious to the naked eye. An appraiser should not assume that because the art looks good on the surface, that all is well inside the frame. Non-archival framing treatments can cover a “multitude of sins.” So can new archival framing on previously framed art. Here are some things that may not be visible:

• Trimmed, torn, folded, or repaired margins - Damage caused by poor or inexpert handling. Amateur repairs to tears usually include tapes that are not archival and difficult to remove without causing further damage. Repairs to works of art on paper should be left to conservation experts.

• Tapes - Art affixed to window mat or backboard with non-archival materials like glue, masking tape, scotch tape, clear packing tape, filament-infused strapping tape, or silver duct tape. The tapes may still be attached to the art; or if removed there may be residue from deteriorated adhesive or remains of the former mount. The removal of the tape may also have disturbed the paper surface.

• Dry mounting - Important artwork permanently mounted to non-archival as well as archival rag board by a well meaning framer may adversely affect value if this is not what the artist intended. Heat-activated glues are not safe for art. This practice is discouraged as mounting of this type is mostly irreversible and as the art has been altered in the process, so unfortunately has the value. A common request from framing clients over the years has been to permanently flatten art work by mounting to a back board to keep works on pa-per from appearing wrinkled or warped. With decorative items that are not expected to have more than personal enjoyment, like inex-pensive reproductions, posters, and children’s school art, dry-mounting is not an unacceptable custom.

• Non-archival backing and fillers - Such as corrugated cardboard, wood-pulp matboard, non-archival foam core, old newspapers, thin wooden boards; chipboard, beaverboard, or Masonite.

• Art itself is not archival - Some artists produce work on materials that were not made to last. For example, paintings on cardboard, Kraft paper, and other acidic papers.

• Fading - Faded paper and pigments caused by poor lighting condi-tions or storage. This will be readily apparent where there is a con-trast in color between the image area that has been exposed to the light and the margins which have been obscured by the picture mat. Depending on the type of paper, the backing materials utilized and the amount of light exposure, the image area will either appear darker or faded. The paper support can also suffer from browning, yellowing, fading or becoming brittle.

• Color change - Color and physical damage to works on paper is caused by intense or long periods of exposure to high levels of day-light and fluorescent light, both containing harmful ultra-violet radiation. There are a number of watercolor pigments that are considered to be non-lightfast. Paint manufacturers have made great strides in the recent past to correct this but it is still not wise to expose watercolors to extreme lighting conditions. For example, yellows and blues often do not retain their integrity, and greens can appear bluer than they once were because the yellow in the paint mixture has faded. Additionally, blues can become greenish because the watercolor paper beneath has yellowed from light exposure.

• Acid Migration - Frame backings, mounting and matting materials that have a yellow or brownish cast to them along cut edges, wood-en backing boards, corrugated cardboard, and smooth pressed paper mounting boards are usually acidic. Direct contact with materials containing wood pulp and certain adhesives can cause damage to art work. This can occur when harmful acids are emitted and migrate to the surface of the art.

• Mat burn - Darkened areas on art which correspond with the be-veled edges of the acidic matboard.

• Flutes - Light and dark striped patterns on paper caused by contact with brown corrugated cardboard.

• Stains - Discolorations caused by adhesives such as rubber cement, mucilage, masking tapes, filament-infused strapping tape, clear cello adhesive tape and gummed tapes. Much of this staining can be permanent.

• Soiling or markings - Caused by poor handling, this includes fin-gerprints, scuff marks, or abrasions left by erasers. For example, one print dealer client regularly brought me works to be framed that had faint red scuff marks along the bottom margins that could not be removed. She had a habit of wearing red nail polish and the polish rubbed off on the prints during handling.

• Foxing - Reddish or brown spots possibly caused by high humidity, fungal growth, or the oxidation of iron particles or other substances inherent in the paper.

• Mold or mildew - Caused by exposure to high humidity, storage in damp areas such as basements, having been hung against exterior walls subject to roof leaks or on a porous brick wall over a fireplace.

• Insect infestation - Evidenced by holes eaten into the paper, small areas gouged out of the substrate and the loss of certain color pigments. Insects love certain types of glue and some paints.

Results: Sotheby's NY Russian Art Sale

This week saw the sale of Russian Art at Sotheby's New York. The results are mixed, but there is some positive news in the sale. There were some records set, the sell through rate was good but not great and the sale totaled just over the low estimate. Now days, I believe you take those results as a positive with some signs of strength.

There were 308 lots offered with 200 selling and 108 being bought in for a 64.9% sell through rate. The sale brought a total of $13.84 million including buyers premiums. The sale had estimates of $12.5 - $17.5 million, when including the buyers premium the sale beat the low estimate.

The top two lotss were an Ivan Aivazovsky of Columbus sailing from Palos, 1892 which sold fo $1.59 million (estimate $1 - $1.5 million) and a pair of Boris Grigoriev paintings, circa 1935 which sold for $1.26 million (estimate $500,000.00 - $700,000.00).

Sotheby's representatives appeared to be pleased with the results, stating “We are very excited and encouraged by the results of today’s sale. It was the first test of the season and we saw a great depth of bidding across a number of different collecting areas. Certainly, the market is selective, but in some instances, we saw works double and triple their estimates. If you consider these results alongside the more than $12 million achieved for Russian works in last November’s Impressionist and Modern sales in New York, and the more than $37 million brought in London in December, it’s clear that the market for Russian Art remains buoyant.”

Park City Utah Auction Cancelled

Jay Hamburg of the Park City Record recently wrote an article on an art auction and the galleries of Park City, Utah. Park City is a popular ski community for the wealthy and home of the Sundance Film Festival.

Recently the non profit Kimball Art Center in Park City was to hold an auction of quality prints and lithographs. According to the article, the sale did not generate enough interest to proceed. The article is interesting as it gives the hope of the auction employees based upon previous experience in these types of sales versus the results, which in this case was the cancellation of the sale.

Hamburg writes inside the Kimball Art Center, the not-for-profit institution that puts on the annual summer art festival on Main Street and hosts a series of exhibits the rest of the year, a few people are hanging works by some of the seminal figures of 20th century art, the so-called modern masters. Pieces by Pablo Picasso, Marc Chagall, Joan Miró and Henri Matisse, among other giants, will be on display for a night.

A Las Vegas firm the next day will put the pieces -- 125 or so, with art from names like Andy Warhol also arriving at the Kimball -- up for auction. An auctioneer from the Snyderville Basin has been drafted for the evening. The Las Vegas firm, known as Modern Masters Auctions, has brought a box full of brightly colored auction catalogs to the Kimball, with numbers printed on the back of the catalogs to identify the bidders.

The recession, it seems, is of marginal concern as the auction approaches. The art sellers are confident, knowing that the market in Park City, buffeted by the wealth of vacation-home owners and well-heeled ski visitors, should remain solid amid the recession.

Hamburger continues There are crowds of people steps away from the Kimball, walking up and down Main Street. Inside, though, there is little action. An hour passes. People from Modern Masters, who are chatting among themselves, are the only people seated in the chairs set up for the auction.

A few interested people browse the works, and 13 people eventually sign the guest list, but there are not enough buyers to hold an auction. It is cancelled. The recession this night has cut deep into an industry that can customarily depend on the biggest names in art commanding prices in the five figures and up.

"We're totally baffled. Everywhere we go, we have people turn out," says Nim Vaswani, one of the art sellers.

Art isn't 'recession-proof'

The article also quotes Mike Moses of the Mei Moses Art Index (contributor to the Journal of Advanced Appraisal Studies, click HERE to order) as well as local gallery owners who state the market in Park City has been off, even during the busy winter and early spring seasons.

To read the full article, click HERE.

Armacost Antiques Shows Announces Antique Newsletter

As I mentioned a few days ago in my posts about keeping appraisal websites current with technology and content, Bob James, president of Armacost Antiques Shows has developed a monthly online antiques newsletter. This is in addition to the basic website and podcasts about antiques currently avaialble. Bob has done a excellent job in redeveloping the old static website into a more user friendly, web 2.0 product to act as a vehicle to promote antiques and his stable of antique shows.

The newsletter, entitled Early Edition will be a free publication delivered by email or available on the Armacost Antiques Shows website. Past issues will be archived. The headlines from the March issue include:

What's Up Coming Attractions

• History's Heavyweights: Vincent van Gogh, Isaac Newton and Paul Revere to Headline Aspen's Newest Art and Antiques Show

• What Determines the Value of a Painting?

• America's Finest Setting for an Antiques Show

Appreciating Antiques

• "Antiques Are Getting Younger: The New Collectables"

• "Green Antiques of Various Kinds of Worth the Long Green"

• "The New Collector: Old Master and Nineteenth-Century Drawings"
  

Current Market Conditions

• "Is Mid-Century Modern Decorating Dead?"

Living with Antiques

• "At Your Service"

Investing in Antiques

• "Antiques Market Hitting Stride During Tough Times"

• "Antiques Turn Out to Be True Treasures"
  

People

• "Antiques Uncovered in Colorado Springs Back Yard"

The newsletter is professionally put together with some very interesting content for the appraiser and dealer. It is also a quick and easy read. I recommend you sign up for the monthly delivery of the newsletter, there is some excellent and relevant content. In the February issue fellow appraiser and dealer Doug Constant, AAA has a short piece on helping identify American case pieces. Many of the tips the seasoned appraiser may already know, but sometimes picking up a single new tip or technique can be extremely helpful, especailly for the generalist appraiser. I also have a short piece in the April edition blending traditional antiques with new and mid century modern.

Visit the Armacost Antique Shows website by clicking HERE, while there sign up for the newsletter and also listen to some of the interesting podcasts on antiques by many well respected dealers and collectors. Francine Proulx, ASA and I did a podcast for Bob about a year ago on appraising.

Nazi Painting from Forced Sale Returned

The New York times is reporting that an old master painting, sold under a forced sale by the Nazi party in Germany in 1937 was returned to the owners estate. German dealer Max Stern was forced to sell his painting inventory by the Nazi's, which included “Portrait of a Musician Playing a Bagpipe,” painted in 1632. In total, Stern was forced to sell more than 200 paintings through the Lempertz Auction. Lempertz also sold the painting in 2007, not realizing it was one of the Stern paintings as many auction house records had been destroyed.

The painting eventually turned up in NY dealer Lawrence Steigrad Fine Arts gallery and was recovered by officials. It appears Steigrad had recently been informed of the status of the painting, and it should be noted that it had fallen through the cracks of the art loss register. Lempertz Auction claims to have checked on the painting with the Art Loss Register, and title appeared clear.

The NY Times reports from a US attorneys statement In November 2007, Lempertz Auction House — the same auction house that sold the Bagpipe Player in 1937 — sold the painting to London gallery Philip Mould Ltd. In December 2008, Lawrence Steigard, an art dealer in Manhattan, purchased the Bagpipe Player from Philip Mould, Ltd., with no knowledge of its stolen provenance, and offered it for sale on the Web site of his gallery, Lawrence Steigrad Fine Arts, Inc. Information from the New York State Banking Department’s Holocaust Claims Processing Office led ICE agents to a Manhattan art gallery owned by Steigard. On April 2, 2009, Steigard confirmed the painting was in his possession and the ICE agents informed him that the painting was stolen and registered in several stolen art databases. Steigard eventually consented to seizure of the painting and entered into a voluntary stipulation to facilitate its return to the Stern Estate through this Office and ICE without the need for any judicial proceedings.

This situation shows how difficult it can be in tracking Nazi art. The article is informative and interesting to read. Click HERE to read the full NY Times article.

RICS UK Arts and Antiques Survey Q1 2009

The Royal Institution of Chartered Surveyors, UK has just released its first quarter 2009 Art and Antiques Survey.

The news is very positive across all sectors of the UK marketplace including the middle markets. From the RICS website.

The arts and antiques market witnessed a dramatic turnaround during Q1 with the All Lot net price balance rebounding from –32 in Q4 to 19. This swing in Q1, moreover, was evident across all sectors of the market, although it was stronger in the lower price categories. Indeed, in the £1-£1000 tier the net balance jumped from –45 to 33, while in the £50,000+ tier, it moved less dramatically from –23 to 6.

According to surveyors, the key factors driving this rebound are:

1. extremely low interest
2. equity market weakness
3. sterling weakness

The first two factors are encouraging UK savers/investors to pursue alternative investment strategies given that yields on cash savings are now so low and that the stock market has fallen so dramatically.

The third factor is encouraging overseas interest in the domestic market, particularly from the US. Out of the ten sub-sectors covered in the survey, only two (clocks and contemporary art) did not see the net price balance move back into positive territory during Q1. However, even in these two areas the net price balance still improved (though far more convincingly in the former area than the latter).

It is notable that in contrast to the contemporary art sub-sector, the oil and watercolour subsector did witness a major turnaround. In the former area the price balance nudged up from –41 to -38 in Q1, where as in the latter area, it swung from -47 to 10. The best performing sub-sectors were jewellery followed by silverware. This is partly due to the perceived ‘safe-haven’ status of such items during times of financial and economic uncertainty.

In terms of the demand and supply outlook for the Q2 period, confidence rebounded strongly on the back of the much firmer performance seen in Q1.

To read and or print the full RICS quarterly report, click HERE. It is in PDF form and is nine pages.

Another Park West Law Suit

Mike Martindale of the Detroit News is reporting there has been a class action law suit filed against Park West Gallery. This lawsuit is a Federal class action suit filed by two New Yorkers who purchased art from Park West in 2002 and 2004 for around $25,000.00. According to the report, they later tried to sell some of the art to over 40 galleries and received no offers. Park West is vigorously defending against these lawsuits, but they seem to keep coming.

Martindale reports The art gallery released a statement on Friday saying, "In our 40-year history, Park West has never sold a non-authentic work of art."

The lawsuit claims the auctions are part of racketeering activity in which participants engage in a fraudulent scheme to auction "low-value, forged or worthless artwork" and sell "phony" appraisals to support the value of the art.

"We intend to vigorously pursue this case," said attorney E. Powell Miller, who filed the lawsuit in U.S. District Court in Detroit this week.

The gallery has been in business for 40 years and has held auctions on eight cruise lines and 80 ships, featuring works of Salvador Dali, Pablo Picasso and Rembrandt, according to the lawsuit.

Earlier this year, The Detroit News reported similar lawsuits and allegations filed in Oakland Circuit Court and elsewhere, and how Park West adamantly denied any wrongdoing.

The Oakland Circuit Court case, which lists eight defendants who claim Park West sold them nearly $600,000 in fraudulent artwork, is pending.

To read the full Detroit News report, click HERE.

Appraisal Foundation Marketing Material

The Appraisal Foundation has a very nice marketing piece entitled Why Engage a Professional Appraiser? It is a very professionally prepared document, with good graphics and content, and it is not specific to any appraisal discipline. It includes Elements of a Qualified Professional Appraiser (yes appraiser, not appraisal) including eduction, experiences, examination, continuing eduction, ethical standards and accountability. Then it details the elements of a professional appraisal, including impartiality, ethics, full disclosure, confidentiality, competence and independence. It then lists the various disciplines, including personal property appraisers, stating can specialize in various types of personal property such as fine art, jewelry, antiques, general household contents and machinery and equipment.

It is on the Appraisals Foundation website as a PDF. I just posted yesterday about Mark Grove updating his website, this is the type of document and marketing material all personal appraiser should have online and as a hand out. It is an excellent marketing tool and personal property appraiser should take advantage of it

To download the PDF, click HERE.

Fellow Appraiser Updates Website

Fellow appraiser Mark Grove, ASA, AAA and contributor to the 2009 edition of the Journal of Advanced Appraisal Studies has updated his website. Mark mentions on his site that he felt he needed to keep up with the times and has thus introduced a more interactive site with potential for growth and continuing content additions. Mark has included an on site blog, plus a daily vocabulary section, a syllabus, market reports, his CV, some of his articles as well as many interesting links, including one to the AW blog.

I am passing this information along because Mark has good insight and instincts. As technology changes, we as appraisers need to stay current with new technology and trends and adapt our sites so they do not look dated and old. There are many templates now available to give a great looking interactive site. Please take a few moments a visits Mark's site at www.mgrove.com, I have also added the site to the links panel of the blog for future reference. Remember, linking to other sites typically helps in search engine optimization so it is a good idea to be linked to other sites.

Nazi Looted Art at Manhattan Jewish Museum

For those who are in the New York City area and enjoy old master paintings there appears to be a very good show at the Manhattan Jewish Museum. Robin Schatz of Bloomberg writes on the Goudstikker Gallery collection of Nazi art. The art was stolen from the Dutch Gallery when the Nazi's invaded Holland. Nearly 1400 pieces of art where either stolen and removed to Germany or had titled illegally transferred to Germany as the gallery continued to operate. Jacques Goudstikker and his wife and child escaped, but he sadly died during the attempt.

About 40 pieces of the collection are on display along with Nazi documents and photographs documenting the theft. The inclusion of the Nazi documents and images adds to the reality of situation.

Schatz reports Hitler’s second-in-command, Hermann Goering, shipped off about 800 of the best works to Germany, commandeering some 200 for himself. (One particularly disturbing photo shows an officious Goering in hat and trench coat striding out of the gallery.) Then he transferred the business to one of his henchmen in a forced sale and let it continue to operate under the Goudstikker name.

Schatz continues in 1997, Marei von Saher, Goudstikker’s daughter- in-law and sole surviving heir, filed for restitution. It took a full decade to get those 200 works back. They represent but a fraction of the Goudstikker trove that is still scattered around the world in private and public collections.

To read the full Bloomberg article, click HERE. “Reclaimed” is at the Jewish Museum, 1109 Fifth Ave. at 92nd Street, through Aug. 2. Information: +1-212-423-3200; http://www.jewishmuseum.org.

Update: Lawrence Salander

It never ceases to amaze me how in the fine and decorative arts business the disgraced can usually find a way to survive, and sometimes even thrive. You see it time and time again, partly because of the human nature and allowing second and third chances. I dont think that will be the case about Lawrence Salander, but you really do have to wonder about people, and their willingness to support and lend assistance to someone in such deep legal trouble. This story in Bloomberg really has me scratching my head. One of the largest art fraud cases with a 100 count indictment and $88 million dollars at stake, and Lawrence Salander still has backers and benefactors.

According to Philip Boroff Bloomberg Salander has someone paying for his legal team and there have been other rumors of other financial assistance to the Salanders as well.

Boroff reports After today’s six-minute hearing, most of which was taken up by a private conference between State Supreme Court Justice Michael Obus and Ross, his associate and two assistant district attorneys, Ross declined to say who is paying him.

“There are friends and supporters of Larry Salander that care very much for him,” Ross said. “If they were asked to help a friend in need, they wouldn’t want his attorney sharing sensitive information.”

To read the Bloomberg piece, click HERE.

Brooklyn Museum Faces Financial Hurdles

Carol Vogel of the NY Times is reporting the Brooklyn Museum is working on plans to save money as its endowment has been reduced and funds from the city are expected to decrease. Earlier in the week I posted on an Art Newspaper article on large museums having some major financial problems due to investment losses from endowments (click HERE to read). Vogel's piece certainly seems to corroborate that post.

Vogel states in her article, In an effort to avoid layoffs, the Brooklyn Museum said Friday it is planning to implement a one-week unpaid furlough this summer for its entire staff and to reduce the pay of employees who earn more than $60,000 a year. The museum is also offering voluntary buyout packages — a week’s salary for every year worked, up to 26 years — to each of its 281 full-time staff members. “The buyout plan might be able to eliminate or significantly reduce layoffs,” said Arnold L. Lehman, the museum’s director.

Vogel continues The Brooklyn Museum’s endowment is $65 million, down from $93.1 million a year ago. It has been struggling with a 32 percent reduction in operating support from the city last year, with additional trims expected.

To read the full NY Times article, click HERE.

Excerpt from the Journal of Advanced Appraisal Studies

Susan Nash of Shepherdstown, WV has 35 years of experience in paper conservation and specializes in wallpaper conservation. Her article in the Journal of Advanced Appraisal studies is a very nice overview of the wallpaper industry and conservation of old wallpapers. To order the Journal of Advanced Appraisal Studies, click HERE.

Excerpt from Susan's article follows.



The wallpaper industry in America probably starts in the 1790’s in small shops of émigrés from Europe. There was a strong German and Scandinavian wallpaper industry, too, and no doubt they contributed. Wallpaper type designs were printed for other uses, most notably to cover hatboxes and line wooden boxes and drawers. One important source of early wallpaper designs is the inside of old trunks where handy wallpaper scraps might be applied to freshen a worn interior. There is a large collec-tion of such papers at the Landis Valley Museum in Lancaster, Pa., as well as a large collection of early 20th century common wallpapers from unused rolls found in a general store. Other premier collections are in Boston at SPNEA, Colonial Williamsburg, and at Cooper-Hewitt in New York City.

The technology for manufacturing continuous paper does not really appear until the 1830’s and for a time joined paper and continuous paper overlap in the trade. The next technical advance comes about 1840 in printing. The combination of production of continuous paper stock and surface roller printing of designs by machines set the stage for a massive increase in output of wallpaper. By World War I, it seemed every house in America had walls layered with paper.

The earliest efforts at machine printing are an interesting study in solving technical problems. First, the ink has to be picked up by a roller which then presses against the paper and applies the color. Quickly, the paper reaches the second roller with the second color and this is applied. If the color is too thin, it will not print; if too thick, it will smear; if too wet, it will run; if too dry, it will flake off. Early machine printed papers of the 1840’s will display many of these flaws. There is also a limitation in the size of the roller that limits the distance of the repeat of the pattern. Twelve to eighteen inches would be usual.

Later in the century, twenty-four inch repeats can be found, but by then the technology of wallpaper design, printing and production was something wondrous. The technical achievement of printing up to twenty-four colors of intricate designs with metallic and mica inks was fully mastered. The individual colors were each outlined on a separate roller, a brass collar was pounded into the outline and stuffed with felt, the roller dipped into a tray of ink and then rolled the color onto a continuously moving bolt of paper, all perfectly in register, of proper consistency and drying as it went. One way to distinguish a machine print from a block print is to look for the telltale directionality of the application of the ink in each color. A block print will typically have a buildup of paint around the edge of each color and sometimes suction marks where the block was lifted off. Rather like the pattern left when lifting your boot out of the mud. A machine print with have thinner ink with directional rivulets with a build-up of ink at the lower edge of the color.

Troubles for Museums Continue

Jason Kaufman of the Art Newspaper is reporting that museums continue to see troubling times. The article sites layoffs, reduction in number of shows, and budget cuts due primarily from loss of endowment revenue.

Kaufman lists the investment losses of the Getty during the second half of 2008 at $1.5 billion, and the Metropolitan museums drop of around $800 million. These are some rather substantial hits, as investment income from the endowments provides operating revenue for the institutions.

Kaufman states The financial crisis reached US museums in force during the first quarter of 2009. The storm clouds of the recession that had been gathering since last autumn unleashed a deluge of layoffs, budget reductions, salary cuts and canceled exhibitions as museums across the country sought to rein in deficits and work out budgets for the coming year.

Kaufman proceeds to report on some of the issues and concerns happening at US institutions. Many have been reported on in the past here on the AW Blog. I wish there was something positive in the article to grab a hold of, but unfortunately, there is not. Kaufman does mention joint shows and potential mergers as way around some of the current financial problems being seen within our cultural institutions.

To read the full Art Newspaper article, click HERE.

CNBC Video at the Philadelphia Antique Show

Here is a first for the AW Blog. A bit of video from CNBC at the Philadelphia Antique show. The report states prices are down due to over supply with many items now coming to market as people need cash. I would also expect some of that is due to lower demand. The report does make a difference on the very top of the market maintaining prices. It is a good video to review and notate as a market analysis, but also keep in mind it is all anecdotal.

Another Museum Collection For Sale

James Panero of the Wall Street Journal is reporting on another museum looking to deaccesssion a portion of its collection. The Montclair Art Museum in Montclair, N.J. will be selling about 50 items from its collection including a Jackson Pollock drawing and several Hudson River scenes through Christies. The sale is expected to generate $3-$4 million for the museum which is refining its mission and plans on using the funds for future acquisitions. Panero seems to question if that is truly the case, and if it is not more an act of desperation and a need to raise operating funds. Certainly an interesting article.

Panero states Presented as curatorial housekeeping, but in fact motivated by financial exigencies, the Montclair sales -- if allowed to proceed -- will set another sorry example of an institution cashing out on art in the public trust.

Panero continues Yet while museums are forbidden from "capitalizing" their collections, or using the value of their art as collateral for a loan, nothing in the AAM or AAMD rules explicitly prevents museums from selling their art along certain subjective guidelines, earmarking that revenue for future acquisitions, and then using the endowment money raised from the sales to back their loans. In both cases, art in the permanent collection has been capitalized. By taking the extra step of selling the art first, however, museums avoid the censure of AAMD while still underwriting loans that may go to general operating expenses or the next vanity expansion project.

This dangerous gap in the guidelines -- one that puts our nation's permanent collections at risk -- the Montclair Art Museum now plans to exploit.

To read the full WSJ artilce, click HERE.

LA Times Profiles Cabinemaker

Jeff Spurrier of the LA Times profiles Master craftsman Patrice Pinaquy, an LA area cabinetmaker who specializes in restoration with the use of all period tools. All of Pinaquy's creations are crafted in a true 17th century manner without the use of power tools or modern adhesives. Many wish to apprentice with this master craftsman. The LA Times profile is good piece with insight into how period masterworks were created.

Spurrier states Pinaquy makes furniture the same way, using no power machinery, no modern adhesives -- just antique hand implements and a commitment to 17th century technique. The ethic is not some Renaissance fair gimmick but rather what this craftsman in L.A.'s Garvanza neighborhood sees as a logical approach to replicating or repairing period furniture. It's why the Getty Center calls when an antique needs restoration. The Huntington Library, Art Collections and Botanical Gardens and Hearst Castle call too.

Spurrier continues His expanded collection of antique tools is museum-quality in its breadth and depth. He believes it's one of the largest in the world and perhaps the only one in use. If a piece breaks, there's a good chance he can make a new one, like his predecessors did in 1700. The exceptions are hand-pulled bow saws that slice a half-inch per stroke (difficult to find blades) and massive wooden clamps (which have hand-turned wooden screws). As part of his training, he made his own workbench, an 800-pound, double-tongue-and-dovetail behemoth that was sawed entirely by hand. He uses animal glues, preferred because they're easier to dissolve and furniture can be disassembled without breaking the joinery. He brings up the gloss with the time-consuming French polish method, applying scores of thin layers of shellac and alcohol that are rubbed in with circular motions.

To read the LA Times article, click HERE.

Ex Salander Gallery Director Pleads Guilty

Bloomberg is reporting ex Salander Gallery director Steven Harvey has pleaded guilty to falsifying records in a fraud, a felony. Lawrence Salander was charged earlier with stealing $88 million dollars from collectors, investors and banks.

Bloomberg reports On July 9, 2004, he signed a consignment agreement to sell art and pay proceeds to the consignor within 15 days of receiving any money, according to a statement by Jeremy Rosenberg, a senior investigator with the DA’s Investigation Bureau. The statement didn’t disclose the identity of the consignor or the art.

The statement said Harvey informed the investigator “that he knew at the time he signed the above described consignment agreement that the gallery would not make the payments to the consignor/informant in accordance with the agreement thereby retaining the money for use by the gallery for its own financial gain.”

To read the full Bloomberg story, click HERE.

Profile of London's Alfies Antique Market

Andrew Ferren of the NY Times travel section profiles, Alfies, the large London multi dealer antique and collectibles market. The market and some of its dealers are known to spot and take advantage of buying trends in the market.

Ferren states, Open since 1976 in a former department store, Alfies has more than 70 dealers spread out over four floors. Once a refuge of dusty knick-knacks, it has swung decidedly toward the modern in recent years. Yet while antiques prices along Pimlico Road have soared, and Portobello Road has become more about people watching than treasure hunting, Alfies remains true to its Church Street merchant soul.

Dropping by the market every so often can keep design-seekers ahead of the curve. As of a few years ago, the sprawling basement gallery of the furniture dealer Decoratum (www.decoratum.com) was full of exotic-looking 1960s and ’70s rosewood and leather seating by the Brazilian designer Sergio Rodrigues, then little known outside of South America. Within months of his debut at Decoratum, Mr. Rodrigues’s furniture was turning up in the glossiest of design magazines.

To read the full NY Times article, click HERE.

Madoff Victims Selling Assets

Shelly Banjo of the Wall Street Journal is reporting the victims of the Madoff Ponzi scheme are starting to sell collections of fine and decorative arts to raise cash. As many of the victims were from the Jewish community, some of the property is Judaic art, the extent now available not seen in the marketplace in decades. Most of the property is showing up in estates sales, consignment shops and auction houses and antique dealers in the Palm Beach area.

Banjo reports A number of rare works of art, antiques and collectibles are on sale for the first time in decades - and at good prices. This so-called Madoff inventory has surfaced primarily in Palm Beach, Fla., auction houses and antique dealers, as well as at shops specializing in Judaic art.

"Rare and one-of-a-kind artifacts and antiques are now surfacing that haven't seen the light of day in generations as the effects of the sinking economy and the Madoff scandal congeal," says Jonathan Greenstein, chairman of J. Greenstein & Co, an auction house specializing in antique Judaica including rare Jewish ritual objects, books and manuscripts.

His company's auctions typically average 130 items, but in June he will be offering more than 200, including many rare pieces sold "under duress" due to Madoff losses, he says. This is at a time when prices for Judaic art are drastically lower than they were a few years ago, he adds.

Many of Madoff's clients were wealthy investors, many of whom owned valuable collections of art, antiques and jewelry. A number of victims were Jewish investors as well as those living in Palm Beach and surrounding communities.

To read the full WSJ article, click HERE. The full article may not be avialable unless you subscribe to the online version of th WSJ. I founded the full article through Google, but when I link, it only gives a sample of the full content.

Mei Moses Fine Art Index Down 4.5% for 2008

The Mei Moses Fine Art Index released its results for 2008, showing a drop of almost 4.5%. Given the current economic issues and late 2008 drop in prices, the 4.5% appears mild, but when compared to a 20% annual increase over the past 5 years, it is a rather steep decline.

The following is from the free based section of the Mei Moses website, the full report is available only to subscribers. To visit, click HERE. Michael Moses and Jianping Mei wrote an article for the Journal of Advanced Appraisal Studies entitled Market Based Art Valuations. To read an excerpt of that article, click HERE.

From the Mei Moses website on the 2008 art index report.

The 2008 decrease in the return of the all art index of almost 4.5 percent is the first time our all art index has declined after five years of positive annual growth averaging almost 20 percent. This result dramatically out-paced the 37 percent decrease in the S&P 500 total return index (where dividends are reinvested tax free) for 2008. The most recent five and ten year compound annual returns (CAR) for art, 11.7% and 9.5%, also exceed the returns of stocks, -2.2% and -1.4% respectively. However, both art and equities were outperformed by bonds, bills and gold in 2008. Art also outperformed bonds and bills during the five and ten year periods but all were outperformed by gold. Stocks outperformed art over the last twenty five years by a CAR of 1 percent but equities dismal performance in 2008 has caused the prior substantial outperformance of equities over this time period to shrink from a CAR of 5% to its current level. However, for the first time since the early 1990's art outperforms stocks over the last fifty years, with a CAR of 9.8% vs. 9.2% respectively.

Art Investment Funds

Melanie Gerlis of the ArtNewspaper has a good article about art investment funds. Several major art investment funds, according to Gerlis have failed to raise the necessary capital to invest in art and provide a fair return. Gelis notes three recently announced funds have not been able to raise capital, some had pledges of funds which never materialized. Given the current economic conditions of the world economy in general, and the art market in particular, the news is really not that surprising.

Gerlis reports The London-based Art Trading Fund, which launched its second fund in May 2008, has had to “delay” its plans as it was “unable to raise the necessary amounts”, co-founder Chris Carlson said. The fund aimed to raise $50m to invest in contemporary art and boasted Mr Saatchi as one of its consultants. While potential invest­ors had verbally committed around $35m to the fund, only $15m came in, according to Mr Carlson. The company’s first fund, which raised $10m in 2007, was likely also to “take a hit” he said, but added that this would be “nothing catastrophic”.

To read the full ArtNewspaper article, click HERE.

Excerpt from the Journal of Advanced Appraisal Studies

Matthew Wilcox, an appraiser with AAA and has been active in the auction business for over a decade including Freeman's in Philadelphia and Heritage Auctions in Dallas, Texas. Matthew wrote an article entitled, Illustration Art: Problems and Resources for Appraisers. Here is an excerpt from the article. It is from the introduction. The article has a lot of infomration and resources for the appraiser to use and reference. To order the journal, click HERE.


Illustration art is a broad class of collectible property comprised primarily of paintings and drawings created specifically for reproduction in a vast range of forms: books, magazines, posters, comics, advertisements, government propaganda and more. Today this historically overlooked class of art is receiving more attention from art and social historians, who are coming to appreciate the untapped well of cultural information encoded into such “commercial art”. However, it continues to be avid collectors and dealers who continually tap this cultural well, bringing to the public attention and marketplace long ignored artists and artworks. Where once only major illustrators like Howard Pyle, N.C. Wyeth or Norman Rockwell earned consideration, today hundreds of once anonymous artists are emerging on the market. Hundreds more are yet to come.

While mechanically reproduced illustrative artworks in one form or another had existed earlier, when we talk about illustration art today, we are really focusing on the last 150 years. The rise of illustration is related to19th century industrialization, and to improved printing technologies. It’s related to the 19th century surge in the American population and to the massive proliferation of inexpensive books, newspapers and periodicals printed on new wood pulp paper; to the rise of the fiction genre in literature; to the public library push; and, most importantly, to the capitalist motivation to sell products and services to an ever more diverse population. Coming of age in America’s “gilded age”, illustrated periodicals and books met resistance from the established cultural elite, who linked artistic and literary mass production of this kind to societal decay. Nevertheless, a true “Illustration Culture” came to predominate American (and European) everyday life for over 70 years, finally subsiding, but not disappearing, due in part to the advent of other media, such as radio and motion pictures, and to the rise of modernism in the early 20th century, which mandated the authentic and original in all things artistic - ideas postmodernists would later challenge.

Regardless of the myriad problems illustration art poses for academic art history, the category presents other challenges altogether for the professional appraiser. Original artworks used for illustrations seem to be coming out of the proverbial woodwork. Years back, in a brief twist of appraisal fate, I came across illustration art originals by Russell Sambrook, Howard Hastings, Rudolph Zallinger, Morton Roberts and Robert McGin-nis, artists apparently unknown to my graduate art history program. They were certainly unknown to me at the time. The near total exclusion of hundreds of eminent American artists from the orthodoxy of academic art history is the first problem an appraiser faces. Next, identifying the creator of piece of illustration art can be difficult, as great numbers of works went unsigned and often shared a common style. Trying to locate the publication or specific use for which an image was created is often a puzzle which cannot be solved without undue delay to an appraisal assignment –if it is solved at all. Finally, an obscure illustrator’s works can confound the search for comparables. Such artworks may be found from time to time quietly slipped into an auction of Fine Books and Ephemera, as only a few houses have chosen to focus on the genre with dedicated Illustration Art departments, notably Illustration House in New York and Heritage Auction Galleries in Dallas. It is our good fortune that the renewed interest in illustration art is occurring during the age of the Internet; almost all of the most helpful resources for appraisers, scholars or collectors are to be found online at dozens of websites and blogs dedicated to illustration.

JP Morgan Chase Sues Art Collector

Reuters is reporting that JP Morgan Chase has filed suit against a wealthy Dutch art collector for $23 million dollars. The loans were secured by art, which have now reportedly have been removed from the US.

According to Reuters, JPMorgan sued Reijtenbagh for breach of contract and other claims. It contends the artwork backing the loan was supposed to be safeguarded at an apartment in the Trump Tower Condominium on Manhattan's Fifth Avenue that is owned by Reijtenbagh's sons, Jacob and Edgar.

However, JPMorgan contends, the defendants moved the "art collateral ... outside of the apartment and the United States" without the bank's consent.

A list of the art includes works by Rembrandt, Picasso, Claude Monet, Edgar Degas, Pierre Bonnard, Rene Magritte and others.

To read the full Reuters article, click HERE.

Interesting Comment on Investing in Art

Li-Min Lim of Bloomberg reporting on the recent Sotheby's sale mentions a record price for Chinese master Lin Fengmian which sold for a record $20.5 million. The sale appears to have gone well with most lots selling. Four of the sales had sell through rates of 77%, 89%, 80% and 74%. Again showing the strategy of fewer items and better quality is working.

The interesting comment from the sale is due to economic reasons, investors are starting to look at art as a safe haven for investments.

Lim reports Investors are converting currency into tangible assets, including art, on concern the multibillion-dollar stimulus spending by governments aimed at ending recession would cause inflation, dealers say. Governments and central banks in 19 of the largest developed countries are spending 43 percent of their gross domestic product to end the worst crisis since the Great Depression, the International Monetary Fund said on March 6.

“It’s safer to hold good assets, such as artworks by established artists, than currency,” said Tian Kai, a Beijing- based art dealer, who flew in to attend the auction.

Lim also mentions sales of the master Chinese outsold and out performed those of contemporary Chines artists. To read the full article, click HERE.

Good Article on Art Theft

Michael Mooney has a very good and substantive article on art theft in the Broward - Palm Beach news. Mooney tracks a $6 million art heist from Nice, France and follows it to conclusion in South Florida. The article reads like pure fiction from a crime novel. It is well worth reading.

Mooney states For "security purposes," he says, they will sell the paintings only two at a time, 1.5 million euros for each transaction. If the first exchange goes smoothly, they'll wait a few days and sell the other two paintings. If something goes wrong and cops get involved, they'll hold the Monet and the Sisley as bargaining chips for reduced sentences. Chelelekian explains that he has a friend in the States who can accept the cash payment. He says they will simultaneously hand over the paintings somewhere in Europe. Bob the illicit art broker from Philadelphia hints that he's beginning to feel like all the hassle might not be worth it. He tells Chelelekian he's not confident he can find a buyer at that ridiculous price. He says he has a phone call to make, and he asks both men to go out in the hall. When he brings them back into the room, he says he may have a buyer in America. After the hour-and-a-half-long meeting, Chelelekian, now fancying himself a fine negotiator indeed, tells Bob he's going to go out and buy a special international phone he'll use only for this deal. It's a sign both sides finally trust each other.

To read the full article, click HERE.

AW Blog

Over the past couple of weeks the email delivery system by Feedburner has not always functioned properly. The blog posts are supposed to be sent out every morning between 7:00 and 9:00 am, eastern time. Sometimes they are sent later in the day, and sometimes they have not been send at all, causing the posts to doubled up the following day. I dont have any control over the erratic behavior of the post aggregator and delivery system through Feedburner. It does appear all post eventually are sent, but the schedule is not always as consistent as I would like it.

Also, I am a bit of a dyslexic typist and a poor typist, so many times there will be some typos and spelling problems in the posts. For some reason, there are times I also fail to use the blog spell checker, which also does not check the title. I also have a terrible time proofing my own work. For that I apologize, and ask for you to please overlook my poor spelling and typing skills. Just wanted to mention it, as I sometimes look at a post and say, how did I miss that?

Thanks for understanding.

Todd