Another Shot at the Art Market

The NY Times recently ran an opinion piece by past investment banker and author William Cohen.  Cohen starts out saying that once you have been made on Wall Street, it is a natural progression to become an art collector and advocate.  Cohen then states how, just like on Wall Street, the art market can be dangerous to collectors. 

Cohen basis his arguments on two recent events, both of which have been topics of posts on the AW Blog. The first is the yard sale photographic negatives stated to be by Ansel Adams, and the other is the recently found Degas plaster molds. Cohen rightfully states the danger being that the art world has yet to decide the authenticity of the items and sales are being arranged for large dollar amounts.  Although, if you are an art speculator, then perhaps the risk is considered and may be acceptable.

Cohen states that each time authenticity is challenged for a high profile work of art, the integrity of the art market is damaged.  That is just too broad of statement to be acceptable. I dont completely agree, granted the Ansel Adams situation and $200 million valuation does hurt the image of the art market, but scholarship and technological abilities to authenticate change over time, and therefore attribution can also change.  To me. this is not a negative, but a positive as the art market assesses and re-assesses noted works and artists.

Cohen states

Bankers and traders — and especially hedge-fund managers and private-equity titans — seem to think that art is not only a great place to stash their cash but also bestows upon them a certain intangible cachet that their jobs, especially these days, don’t provide.

There is a long history of Wall Street tycoons indulging themselves this way, and some actually seemed to know what they were doing in buying art. Not for nothing did Bobbie Lehman, the patriarch of Lehman Brothers after World War II, have one of the best private art collections on the planet. Other financiers — like Michel David-Weill, the scion of the Lazard banking fortune; Stephen A. Cohen, the self-made hedge-fund billionaire; and Leon Black, the private-equity don — are widely considered to have among the finest art collections in the world.

But like Wall Street, the art market is a very dangerous place, populated by any number of unscrupulous figures finding increasingly sophisticated ways to separate people from their money. Although no one is likely to have much sympathy for a bunch of Wall Street types who may end up getting snookered while trying to use art to improve their tarnished images, the fact remains that as the sums paid for works of art spiral upwards — in May, a Picasso painting sold for a record $106.5 million — the questionable behavior seems to be metastasizing. This must stop.

To read the full NY Times opinion piece, click HERE.