More on the Art Bubble

I have posted  a few articles in the past about the potential of an art bubble, and like most bubbles, it will break and the market will correct.

The Canadian paper, The Globe and Mail takes a look at the art market and the bubble, with an article entitled The year in review: Tracking the tricky art bubble.  The article looks at some past predictions of a corrections that did not come, and of those who still believe it is on the horizon.

The Globe and Mail reports

Everyone agrees, it seems, that the market is ripe for some kind of “correction” or, as the more moralistically inclined prefer, comeuppance. But there’s no consensus on what will serve as its harbinger. Indeed, the harbinger fluctuates from person to person, taste to taste, from one notion of inherent value to the next. Some, for instance, read the fact that three canvases by Basquiat, dead since 1988, set successive auction records this year as each came up for bidding as an irrevocable sign the end is nigh. To them, Basquiat is overwrought, overrated, overvalued. That a Basquiat can be auctioned now for almost $30-million while an Italian Renaissance masterpiece goes for $16-million is proof of a world at once out of joint and in need of a crash.

Others, though, think the Basquiat market is destined for greater heights. In a recent online post, New York collector Mickey Cartin recounts a conversation he had earlier this year with a fellow collector who “mentioned rather emphatically that Basquiat, as a market phenomenon, will soon be seen as the next van Gogh,” with a per-canvas price range of $50-million to $250-million to reflect that.

Some correctionists, in the meantime, take solace from such talk in history and connoisseurship. Blake Gopnik, former art critic for The Globe and Mail and now an art writer with thedailybeast.com, claims in a recent essay he wasn’t too exercised when the last version of Edvard Munch’s The Scream in private hands sold at auction this year for $120-million. Munch belongs to the ages like Michelangelo and Manet. It’s “when prices go nuts for artists whose reputations are still in play [that] trouble is sure to be looming.” Gopnik notes how 50 years ago artists like Mary Frank and David Slivka were big sellers and much written-about but today are forgotten. Fellow New York critic Jerry Saltz casts his eye back even farther: yes, 85 per cent of shows of contemporary art are bad, he opined recently – “but 85 per cent of all art made in the Renaissance was bad,” and aren’t you happy we don’t have to live through that?

Canadians, meanwhile, can only look with shock and awe, mixed perhaps with envy, relief or disgust, at the mania in the secondary art market occurring outside their borders.While our secondary market in the last decade or so has witnessed big expenditures on work by mostly dead, mostly white males like Lawren Harris, Tom Thomson, William Kurelek and Jean Paul Lemieux, the dollars fetched have been nowhere as big (or

delusional?) as those wooed by U.S. and British auctioneers.

Our recently concluded fall season sales of “important Canadian art” were, in fact, decidedly sober, even chastening: two of the three major auction houses failed, in each case, to sell more than 35 per cent of their lots. It’s the sort of “correction” some wouldn’t mind seeing south of the border, especially in the contemporary art realm where Christie’s this fall, for example, had an astonishing 92 per cent sell-through.

The economist Herbert Stein once observed: “If something cannot go on forever, it won’t.” Soap bubbles clearly demonstrate the truth of that gnomic “law.” So does the tulip mania that dazed the Netherlands for about a year in the middle of the 17th century. If the art bubble is truly a bubble, it won’t go on – but just when it won’t is anyone’s guess.

Source: The Globe and Mail