Speculation in young artists is over, and the smaller dealers will be hurt the most

Perhaps the silver lining is a return to the importance of museums and critics

The theory: speculation in art (and young art) is over. When several guaranteed Rudolf Stingel works failed to sell at auction last winter, it signalled the end of a certain kind of buying of art. It wasn’t just the sub-prime crisis—it was a signal of something far more important. A change for what I like to call the professional collector who was buying a work one year for, say, $150,000 (from a primary dealer) and turning it around within a year to resell the same work for, say, $500,000 (either at auction or with a secondary dealer). By now the auction houses seem awake to this change and the evening sales have, and will have, fewer and fewer hot young artists, and especially few guaranteed deals in the $1m-and-under range for artists like Anselm Reyle.

So what happened? Well, first of all the arbitrage possibilities that may have existed with international price anomalies are harder to find—people in Frankfurt know what works in Los Angeles sell for now. After all, everyone travels more and gets more (but not necessarily better) information online. Galleries too have kept track of the shenanigans of their clients and want to cut the speculators out. After all, how do we think Richard Prince (and his dealers) felt (at first) when his “Nurse” paintings that were sold in 2003 for $75,000 were turned into multi-million dollar profits within a few short years? Traditionally that was avoided by selecting buyers who never sold—but now galleries have a new tactic. If you raise the primary prices to the level of the secondary market there is no room for speculation. So, game over.

So what is the effect? I suspect that it will hurt the smaller galleries that sell emerging or non-blue-chip art the most. I suspect, but don’t follow it closely enough to say for sure, that it will also happen sooner or later with Chinese, Indian and Middle Eastern art markets as well. One of the factors driving those markets has been the almost annual price doubling for every artist. So collectors have been buying works they hardly care for, thinking, “this is easy.” It’s been kind of like buying internet stocks—and we know how that ended. With the high prices for younger art “established” by a speculative market where can they go, relative to demand, but down? But galleries never lower their primary prices, so these works will sit in gallery storage racks—with zero revenue-flow for non-brand name dealers. I call this the death spiral for art: sinking prices and sinking demand.

What is the silver lining in all this cloudiness? Perhaps a return to the importance of museums, critics and alternative spaces for validation and the introduction of new art.

The writer is a private dealer and publisher of the Baer Faxt based in New York

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20 Sep 09
14:14 CET


and asking artists what they think.I've never heard a serious discussion about the artists(and other prominent auction favorites) mentioned in this article by other artists young or old.Up until the 80s even if the museums went ga ga for some questionable work(neo-bling) the artists were heard in the market place and critical establishment

20 Sep 09
14:14 CET


Perhaps a return to the importance of museums, critics and alternative spaces for validation and the introduction of new art. Hmmm! Sounds like this critic wants a return to the status quo. I for one was both appalled but envigorated by the hot market. It SAVED us from the quaint old antique ways of old where the strict power structures of art sat set in stone. Why is art always so linked to such 'niceness', such 'old worn comy shoe-ness', such predictablity, such HO HUM. I for one hate this tired, quasi spiritual, soft-left, self-satisfied smug artworld. Bring back the Futurists anyday! Flood the Museums and burn down the libraries. Hang the DJ...and the curator! Back to the good old days...God help us!

20 Sep 09
14:14 CET


We see young stars rising and achieving the prices of seasoned artists in one-fifth the time in the Southeast Asian art market. It is causing artists to re-assess the role of exhibitions and the concept of validation when they can easily use the auction channel - there's more money, more publicity and faster...But these are artists who have not weathered a cycle of downturn and at the end of the day, artists are the most vulnerable when the crunch comes. The Southeast Asian art market is still in the middle of this journey. It will be good for all.

20 Sep 09
14:14 CET


Money or the value of art has become the measure of an individual artist success it would seem. As this article suggest Art has become high profit business, a space full of sharks (no Hirst pun intended) not appreciators. They look for the next bit of fresh meat within the murky waters and you know the how the story ends. What is left is an artist reputation in tatters. Art today is a brand or a product that depends on provocative marketing no longer a personal observation that the rest of us can peek into. I hope the art industry receives a deep correction parallel to the money men’s mess. As a young artist I don’t care how much my creations fetch or what galleries my work might feature in. I merely observe and record what I see, some may like others will hate, I listen to constructive critics but do not always act on there subjective views. I don’t view money as a measure of my success but I do crave time’s respect and attention as payment for my efforts. BobbyMookini

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