A $180 Million Picasso: What’s Making the Art Market Sizzle
The art market is hotter than a hoisted Rembrandt.
Last night at Christie’s in New York, Picasso’s “Les Femmes d’Alger (Version O)” sold for almost $180 million – the highest price ever paid at auction for a piece of art. There were said to be five bidders, and the winner remains anonymous.
At the same sale, a Giacometti sculpture, “L’homme au doigt,” went for a total of more than $141 million.
On May 5, at the first major auction of the spring selling season, Sotheby’s pulled in $368 million. It was the second-highest sale of Impressionist and modern art in the history of the auction house, according to The New York Times. The top seller was van Gogh’s “L’allée Des Alyscamps,” which fetched $66.3 million.
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The haul represented a 67 percent increase over Sotheby’s spring sale a year earlier, according to Bloomberg, which noted that many of the buyers were Asian.
The May 5 auction was only the second-highest because Sotheby’s held a sale last November that took in $422 million.
And tonight at a Sotheby’s auction of contemporary art, a painting entitled “The Ring (Engagement)” by the Pop artist Roy Lichtenstein could sell for as much as $50 million, the Times said.
What’s behind all those staggering numbers?
About a year and a half ago, the columnist Felix Salmon (then at Reuters, now at Fusion) ruminated about whether there was a bubble, which he defined as often driven by FOMO (fear of missing out), or a speculative bubble, one fueled by flippers, in the art market. His conclusion: the art market bubble was definitely not speculative.
“The people spending millions of dollars on trophy art aren’t buying to flip…,” he wrote.
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Still, Salmon said he was seeing signs that the market could be turning speculative. But they may have been false signals.
Recently, The Wall Street Journal wrote: “Spurred by the momentum of several successful sale seasons and an influx of newly wealthy global bidders, the major auction houses…say demand for status art is at historic levels and shows no signs of tapering off.”
But why?
In an April 17 article, the global news website Worldcrunch asked Financial Times journalist Georgina Adam, who wrote the 2014 book Big Bucks—The Explosion of the Art Market in the 21st Century, why so much money is rolling around the art market and driving up prices.
“Rich people used to be rich in terms of estate or assets, but not so much in terms of cash, like they are today,” she said.
“This growing billionaire population from developed or developing economies has money to spend and invest,” said the Worldcrunch article by Catherine Cochard. “For many of them, art — in the same way as luxury cars or prêt-à-porter — is an entry pass to a globalized way of life accessible through their wealth.”
That is a development that the keen eyes at the auction houses haven’t missed.
It’s Official: No Government Shutdown – for Now
President Trump signed a short-term continuing resolution today to fund the federal government through Friday, December 22.
Bloomberg called the maneuver “a monumental piece of can kicking,” which is no doubt the case, but at least you’ll be able to visit your favorite national park over the weekend.
Here's to small victories!
Greenspan Has a Warning About the GOP Tax Plan
The Republican tax cuts won’t do much for economic growth, former Federal Reserve Chair Alan Greenspan told CNBC Wednesday, but they will damage the country’s fiscal situation while creating the threat of stagflation. "This is a terrible fiscal situation we've got ourselves into," Greenspan said. "The administration is doing tax cuts and a spending decrease, but he's doing them in the wrong order. What we need right now is to focus totally on reducing the debt."
The US Economy Hits a Sweet Spot
“The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year,” The Wall Street Journal reports. But the milestone was reached, in part, because the Congressional Budget Office has, over the last 10 years, downgraded its estimate of the economy’s potential output. “Some economists think more slack remains in the job market than October’s 4.1% unemployment rate would suggest. Also, economic output is still well below its potential level based on estimates produced a decade ago by the CBO.”
The New York Times Drums Up Opposition to the Tax Bill
The New York Times editorial board took to Twitter Wednesday “to urge the Senate to reject a tax bill that hurts the middle class & the nation's fiscal health.”
Using the hashtag #thetaxbillshurts, the NYT Opinion account posted phone numbers for Sens. Susan Collins, Bob Corker, Jeff Flake, James Lankford, John McCain, Lisa Murkowski and Jerry Moran. It urged readers to call the senators and encourage them to oppose the bill.
In an editorial published Tuesday night, the Times wrote that “Republican senators have a choice. They can follow the will of their donors and vote to take money from the middle class and give it to the wealthiest people in the world. Or they can vote no, to protect the public and the financial health of the government.”
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Can Trump Succeed Where Mnuchin and Cohn Have Flopped?
President Trump met with members of the Senate Finance Committee Monday and is scheduled to attend Senate Republicans’ weekly policy lunch and make a personal push for the tax plan on Tuesday. Will he be a more effective salesman than surrogates in his administration?
Politico’s Annie Karni and Eliana Johnson report that both Democrats and Republicans say Mnuchin and chief economic adviser Gary Cohn have repeatedly botched their tax pitches, “in part due to their own backgrounds” as wealthy Goldman Sachs alums. “House Speaker Paul Ryan earlier this month asked the White House not to send Mnuchin to the Hill to talk with Republican lawmakers about the bill, according to two people familiar with the discussions — though Ryan has praised the Treasury secretary’s ability to improve the legislation itself,” Karni and Johnson write.