L.A. Times’ Christopher Knight reflects on the market as 2012 draws to an end, with a certain inconsistency in the art market as a whole: demand for high-quality modern and contemporary work, with soaring prices for young artists is coupled with the failing economic health of many nonprofits, (LACMA certainly among the most well-known examples). “Obscene private wealth and gross income inequality are global phenomena; the economic system is rigged and surplus cash must go somewhere”.  (more…)

With soaring prices for certain contemporary and modern artists, some say there are signs of a bubble that is about to burst, such as the fact that people are attracted to high prices and “trophy” art. Some say it is similar to “tulipomania” in 17th century Holland, whereby the insiders have already purchased, so the market expands to newer, international audiences to continue growth. One [anonymous] advisor put it like this:  “The market has to come down—because it has to. They don’t call it a market because it only goes up. You call that ‘magic.’” Others such as Mary Boone and Sean Kelly, question whether the frenzy at the top of the market is truly an indicator of a bubble. Kelly says, “Every time you thought the world was ending, this market has confounded that prediction.”  (more…)

Rachel Cohen, author of “A Chance Meeting”, and of the forthcoming “Bernard Berenson: A Life in the Picture Trade”, writes about the dual history of art and investment banking over recent centuries: “There is more than a shadow of resemblance between the purchase of the Hirst skull in 2007 and the mortgage-backed-securities debacle that made of Lehman Brothers in the following year one of the great public pictures of vanitas we’ve had. And, when you look further into these intersections, you often find that what is really at stake is a change in the way we feel and understand time.”  (more…)

According to Artnet data, Businessweek reports that Damien Hirst works that were purchased during the artist’s commercial peak, between 2005 and 2008, have seen an average negative return of 30% when resold, particularly notable in a year of record auction results.  Sergey Skaterschikov, a Russian investor and business strategist, said that Hirst “degraded his market, almost cannibalized it, by developing this mass production of well-recognized images.” James Kelly, Hirst’s business manager, asserts that auction prices are a “totally misleading” indicator and don’t reflect private primary market sales data.  (more…)

The author of Seven Days in the Art World, Sarah Thornton, recently wrote in TAR magazine about why she will no longer write about the art market. Adam Lindemann’s perspective and response to her piece on writing about writing about not writing about the marketing and the market of art appeared in the Observer. (more…)

In a deposition this week, Larry Gagosian stated that he frequently represents both parties – buyer and consignor – in sale transactions that he brokers. The case brought forth by Jan Cowles, who sued Gagosian for selling a work she owned without her consent, involves a painting that sold for below market value at $2 million, and whereby Gagosian earned an unusually high relative fee of $1 million.  Mrs. Cowles’s lawyer, David Baum, claims that representation of both parties without disclosure is “blatantly unlawful under New York agency law.” The gallery asserted that its “practices are fully consistent with both the law and the standards in the art world.” (more…)

The Wall Street Journal provides a comprehensive outlook on the state of the art market, from Old Masters to Contemporary as dealers head into Frieze and auction week in London. There is a certain polarization with multi-million dollar pieces in high demand and emerging work less so. The article discusses how the most speculative sector of the art market is work from 1945-onward, which saw a 66% drop during the recession but has rebounded, especially in the case of artists like Gerhard Richter. (more…)

Ellsworth Kelly, interviewed, describes his taste in art, his creative process and how he chooses to work against the art market rather than give into its pressures. His show, Plant Drawings, will be on display at the Metropolitan Museum of Art until September 3rd.

(more…)

The New York Times describes how, as the price of art continues to increase, more art collectors seek to have the courts rule on cases of authenticity, as witnessed through the three recent cases involving Knoedler & Company; though often the arbiters decide based on their experience in contract law versus any knowledge of the arts.

(more…)

NY Times reports on the theories and paradoxes behind the value of art “Art is often valuable precisely because it isn’t a sensible way to make money.”

(more…)

Newsweek attempts to discern the sociological and psychological factors that drive the high price of art.  “Some people actually prefer to pay more than makes sense.” [AO Newslink]

(more…)