Tuesday, April 04, 2006

"Crash" Talk Open Thread

So two collectors of ours who always have interesting insight into the art market came in over the weekend and noted that they were surprised I hadn't yet blogged about Marc Spiegler's provocative New York Magazine article on the supposedly inevitable crash of the market (actually only the title seems to imply a "crash" is inevitable, but...). The truth of the matter is most of the articles I've read and many of the blog comments I've seen have hinged on an illogical dichotomy of extremes in my opinion, and I've been waiting for the dust to clear, thinking someone would eventually start offering analysis that matched what I see in the gallery. Also, as much as I love to participate in talks about the art market, I'm actually somewhat clueless about the finer points of the stock market and other bellwethers, so I tend to listen a lot before jumping in.

So fortunately, these collectors and I spent some time hashing out our thoughts on the subject, which helped me identify the source of my hesitancy to weigh in on the debate. In short, IMO, despite the chicken little chatter prevalent across the art press, the alternative to the market continuing to rise indefinitely (which no thinking person assumes can happen) is not limited to a devastating "crash." There are many other possible futures. Spiegler stated as much in his article, but, again, that alarmist headline overshadowed his balanced take.

Then I found the very informative overview of the issues at hand by George of
FutureModern. George gently walks his readers through the vocabulary (crash, contraction, froth, topping phase, etc.), outlines the "crucial factors affecting recent art pricing," and explains the warning signs that some downward turn are coming, including, froth, auction psychology shifts and a stock market decline (or bear market). It's a great read you shouldn't miss.

Finally, yesterday,
artinfo.com reported on a lecture Tobias Meyer gave where he offered a very optimistic prediction:

Meyer said the boom can be attributed to “a small supply and an enormous demand” for contemporary art. The supply/demand imbalance is such that “I hardly know what things are worth. It has nothing to do with the market anymore. It just depends how much a collector wants it,” Meyer said.

The heightened demand is coming from a new generation of young collectors “who have made their money by intelligence," said Meyer. "They’re not interested in living a pseudo-aristocratic lifestyle. They want to be part of a living culture.” Big money is also coming from new collectors in Russia, China and India, all of whom love their Warhols, and some of whom will pay anything to get one. Meyer called these “the ‘I-don’t-care collectors.’”

“I think it hasn’t even started yet,” Meyer said of the boom, looking happily bewildered.

Of course, Meyer's argument is virtually verbatim what Spiegler suggests we'll hear from those invested in sustaining the frenzy for as long as possible:

Because if art itself is built on the image, the idea, and the object, the art business hinges on words—the spoken and written seductions that persuade buyers to pay ever-higher sums.
What emerges, the more you read, is the clear sense that no one really knows when the art market may cool or crash or may just soar even more, and the smart people are prepared for either to happen. What's perhaps most important for anyone looking for a healthy long-termed relationship with contemporary art (as either collector or artist or consultant or whatever) is to align yourself with the folks who are in it for the long haul...folks who will weather any coming bear-market-storms because it's in their blood. Indeed, Marc relates one anecdote that serves as both comic relief and cautionary tale:
Even [Marc] Glimcher [president of PaceWildenstein gallery], a seller in this seller’s market, is a little tired of [the seller’s market]. “In the VIP room at Art Basel last summer, I overheard these young dealers, people who had booths in the fair, talking about what they’d do when the market crashed—Hollywood producer, agent, etc.,” Glimcher recalls, his voice a mix of outrage and amusement. “I turned around and said, ‘Good riddance. Get out now!’ ”
So essentially, I combine all this and to me it seems to form a license to put my nose to the grind stone and simply do what it is I love to do as well as I can do it...being essentially prepared for the worst but ready for ever better things to happen.

The thread is open...

UPDATE: Marc Spiegler, who I've met before, was kind enough to email me about this post and upon reading his response I realize I mischaracterized what I had hoped to convey about his article. My only issue with it at all (overall I thought it was excellent) was the title, which I know journalists rarely write themselves and should have emphasized above. Marc also questioned my admittedly glib line about the "the chicken little chatter prevalent across the art press":

About "the chicken little chatter prevalent across the art press": Generally speaking, I think actually there's very upbeat coverage of the market. Pessimistic pieces are handily outpaced by those filled with frothy positivist chatter from dealers and auctioneers, all of whom are vested in a strong market's persistence. Look at all the Chinese Contemporary art-market Eldorado stories lately, for example, with rare mention of the rampant speculation and frequently cowboy behavior of the scene's artists and collectors.
I told him I should have clarified that as well. To me the "art press" is increasingly predominantly blogs, and many blogs by artists, who are perhaps at the forefront of discussing more openly the good that could come from a "crash" (i.e., a new-found emphasis on less commercial work). I would agree that the printed art press remains predominantly upbeat. ("Thank God!!" says the dealer who just moved to Chelsea.)


Blogger Mark said...

Real estate will adjust, raw land will continue to value. Lesser known artists work will adjust/weed out, established name art will continue to increase in value. There is only so much land, especially water front, and only so many Warhols. That's as sure as it can get, with out adding the terrorism factor in to the mix.

4/04/2006 09:49:00 AM  
Anonymous Anonymous said...

So what is your analysis of what you see in the gallery???

4/04/2006 12:05:00 PM  
Blogger George said...

Ed, Thanks for the nice comment.
I would take Tobias Meyer with a grain of salt, after all selling via emotion is his job.

I like Marc Glimcher remark "Good riddance. Get out now!" It is inevitable the art market has a contraction. The most dangerous thing that could happen is what Meyer describes: "I hardly know what things are worth. It has nothing to do with the market anymore. It just depends how much a collector wants it" Over the short term, 1-2 years, this emotional state and resulting financial ramifications are unsustainable and will end. The longer the feeding frenzy lasts, the worse the correction will be.

In super prosperous times like these, I believe that money has a distorting influence on the art market. Heightened demand places an undo emphasis on art as a product over art as an investigation or... To my eye at least, the "crank it out" mentality is resulting in less than great work. Gallerists with a true love for art, those who "simply do what it is I love to do as well as I can do it" are the foundation of the art market for they function, at least in part, near the start of an artists career. A gallerist with a love for art, is engaged with the artworks as much as the business and becomes a primary and positive interface for introducing new work to collectors.

4/04/2006 12:54:00 PM  
Blogger Mark said...

oops, never mind.

4/04/2006 03:41:00 PM  
Blogger Bill Gusky said...

I agree with George: I believe that money has a distorting influence on the art market. Heightened demand places an undo emphasis on art as a product over art as an investigation or... To my eye at least, the "crank it out" mentality is resulting in less than great work.

I'd add that, while there's a perverse appeal to apocalyptic pronouncement, reality consists much more of lulls, cooling-offs, corrections.

Of greater interest to me are the ways an artist's career arc effects his valuations over time in those cases (many?) where the arc is short and acute. You get the sense that someone gets caught holding the bag in many of these cases.

4/04/2006 08:50:00 PM  
Blogger George said...


Following along your thoughts. I have an observation, a theory, that changes in styles, art movements or the general focus of a period tend to occur during economic recessions. I haven't done any hard and fast research, it is more of an anecdotal observation. My theory is that in hard times or periods of slower market activity, there is less pressure to produce "product" since the demand has decreased. This enables artists to experiment more.

Conversely, during strong periods in the marketplace there occurs a capitalization on the dominant style. Brisk sales for visible artists spawn similar work from other artists. This "stylistic filling out" is pre-validated and therefore marketable. It receives preferential treatment precisely because it is marketable, and experimentation becomes artificially restricted. In more quiet periods, there is less pressure to find something "already validated" to sell, since it is harder to sell almost everything. More experimentation occurs, artists attempt to differentiate themselves from the previous style and new stuff happens.

4/04/2006 10:01:00 PM  
Blogger Bill Gusky said...

George, that sounds like it makes a lot of sense.

When you talk of dominant styles, I see few truly dominant styles nowadays, and dominance seems not to be terribly strong. Examples: the Pettibon style, cartoons with text -- the new mannerist style, Currin / Yuskasavage et al.

And their dominance can now be timed in terms of weeks or months, rather than years.

Does that sound right to you?

4/05/2006 11:36:00 AM  
Blogger George said...

I hated using the word "style" but I didn't know what else to use. As I see it, there becomes a ubiquitous set of conventions which start to permeate a medium, like painting for example. One reason I was reticent about using "style" is your observation on its ephemerality, here today gone tomorrow. In any case, I do suspect, apparent success causes imitation at both the production and marketing end of the business. It's nothing new, just amplified by the amount of money flowing through the system.

4/05/2006 02:00:00 PM  

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