Monet, Van Gogh fail to sell

https://www.zerohedge.com/news/2019-02-28/100-million-extremely-rare-intensely-private-artwork-just-hit-block-and-most-didnt

Greater fool fails.

One of the collections most coveted works, Monet’s “Saule pleureur et bassin de nymphéas,” failed to sell after it was estimated that it would fetch about 40 million pounds. Additionally, Van Gogh’s “Portrait de femme: buste, profil gauche,” from the artist’s trip to Antwerp in 1885, estimated to sell for 8 million to 12 million pounds, also failed to sell.

Something’s up with the funny money.

China paints duplicates, that’s why there are no great artists anymore.

Theft and fraud.

Video: Why is modern art so bad?

I’ll interject with a little background since I happen to know something to contribute.

I once heard a thought experiment from a nouveau realist artist. They’re trying to bring back form.

If you were walking around a scrapyard, and you found this work of “art”, a little distressed and muddy, would you know what it was? Would you recognise it? Furthermore, would you feel compelled to ‘save’ it?

I’ve yet to find a better test.

AC has touched on this profound schism between the ancient standard of art (K-selected amygdala) and the postmodern ….excuse.

Historically, the turnaround point could have been at two places. The backlash against The Academy in Victorian times (Pre-Raphaelite Brotherhood’s sexualisation onward) or, it laid the groundwork for the likelier of the two. A backlash against Nazi Germany, itself in contrast to “Degenerate Art” aka what we now laud as Modern, almost a century later. When the Nazis lost, it became a show of Allies’ patriotism to oppose the Nazi standards and anything symbolically on a tangent with them (Hugo Boss suits included) and to fill the vacuum with whatever was disgusting, depraved or shocking (cough Holocaust porn cough), and call that “beautiful” to mirror the implied equality of humans (with mud) versus the racial hierarchy. What a lot of people don’t know is that the Nazis did showcase an exhibit of this inferior artwork…. next to ideal Nazi examples with perfect lighting. The contrast was apparent. Hence, when the Jews opened their own art galleries after the war, which style of art do you think they bought? Art is a market after all, a lot of money in it, and even today, the market is overvalued thanks to billionaire tax breaks. When those stop, the market will collapse, and the New Money from China will be left holding its dick.

Naturally, there are those who disagree with the analysis but the timings and statements about the only true art being ‘political art’ are persuasive ipso facto;

We can easily dismiss demonising talk of ‘the Jews who destroy art in order to break Aryan spirit’.

…Photography is to painting as pornography to real women. Both create an illusion of real thing, but leave a lingering emptiness. In the long run, the ‘real thing’ suffers. Pornography undid many happy unions. Reproduction of art conditioned us to view uninspiring beauty. It is difficult to view a painting of Mona Lisa without instinctively comparing it to its endless reproductions. In a way, the modern art was a botched response to reproductions, for an artist needs to attract attention of blasé viewers.  unz

Yet, if you dare suggest there is an objective standard of beauty, and that art must depict both beauty and technical expertise hard-won from thousands of hours in studio, the sudden shuffling of feet to disassociate with you would create another, firmer impression.

The current line? Personal ‘expression’. Lauding the Self and all it makes (cough period art cough) as God.

Think: Is the issue with the artist or the viewer?

A culture can be readily judged by the superiority or inferiority of their artwork.

Record art sales, no problems here

http://www.unz.com/isteve/billionaires-and-art/

In just two weeks this month in New York, the auction houses Sotheby’s and Christie’s sold over $2 billion in art, a record for major New York fall auctions. …

The lofty sums stunned even longtime art market watchers. “It’s phenomenal,” said Michael Moses, a founder of the Mei Moses Fine Art Index, a widely followed measure of art prices, and a retired professor at the New York University Stern School of Business. “At the Christie’s postmodern and contemporary sale, the average compound return was 20 percent annualized. That’s amazing.” …

This month’s record sales left some dealers and collectors talking about irrational exuberance and a potential bubble, especially in the soaring contemporary-art market. But Evan Beard, who leads Deloitte’s art and finance practice in the United States, said he didn’t agree. “If you were seeing second-rate works selling for huge values, then you’d say there’s dumb money out there,” he said.

lol laughing rdj tony stark heehee haha

“But the works selling for these high multiples are important works that art historians have deemed innovative and have had influence. People want to own original works of genius.”

…He noted that it was contemporary and postwar works that had shown the biggest gains. “The single most surprising change in the art market is the relative increase in the value of recent art,” said David Galenson, a professor of economics at the University of Chicago who has done groundbreaking research into valuations in the art market.

More money than sense. New Money. A fool and his money are soon parted, etc.

While some art historians, curators and dealers bemoan the emergence of fine art as just another economic asset class, “art and money have always been joined by an umbilical cord of gold,” Professor Galenson said. “The Renaissance ideal has gone the way of the dodo bird. I say, Get over it. Steven Cohen doesn’t make any pretense of being an art history major. Maybe he’s the Andy Warhol of collectors.”

I love this suit and everything about this demeanour

In a recent survey of art professionals by Deloitte, 76 percent said collectors viewed art, at least in part, as an investment — up from 53 percent two years ago. And 72 percent said their clients’ primary reason for buying art was related to the “social and networking scene” and the status associated with buying art, compared with 59 percent in 2012.

emotion, great reason behind investment decisions

Given the money involved, it probably shouldn’t be surprising that bankers are treating art like any other asset class, which, in turn, is helping drive up prices and create a more liquid market. More banks are lending against art as collateral. Some are even starting to create collateralized debt obligations with art as the underlying asset — much as bankers packaged subprime mortgages before the financial crisis.

As the commenter says, This will end well.

The soaring prices are being driven by market forces rather than any aesthetic or artistic awakening, Professor Galenson said. “Aesthetics have nothing to do with it.”

No shit.

Commenter: That was the conclusion of Tom Wolfe’s “The Painted Word” in 1975, that the real creative artists weren’t the guys holding the paintbrushes, but the critics holding the pens who explained why you were supposed to care about one guy and not about another guy.

^ And that is why it is doomed. Downward spiral.

“A lot of contemporary art is aggressively ugly,” Professor Galenson said. “That doesn’t matter in terms of its value.”

It bloody will.

Commenter: We live in a world of 7 billion people so there are 7,000 individuals with one-in-a-million artistic talent. There are a lot of very talented artists out there right now making a decent living selling beautiful art to millionaires.

First part is true, second is not. That is the problem.

C: So maybe that helps explain the mystery of why billionaires are so much more enthusiastic about contemporary painting these days than non-billionaires: because the paintings are just embodied metaphors for buying and selling. And billionaires love buying and selling. Buying and selling has been very very good to them.

A product without value.

The Myth of Modern Art Markets

TLDR: The majority of people hate the style. Justly.

http://drawingacademy.com/contemporary-art-bubble?awt_l=9WmjM&awt_m=3vdcDndjTdpSnqq

Until the 15th century, fine art had sacral and utilitarian purpose. No artist was producing paintings for the pure aim of being admired as a subject itself. The church was the main and only client able to afford marvelous masterpieces intended to glorify the commissioner and religious faith. It was a status quo up to the time when Italian bankers and republic rulers came into play. With new money came a new agenda for fine art. No longer was art to be sacral, it was liberated to fulfill another meaning – to become an object of admiration, the measure of status.

Fine artists obliged with readiness. Before that, no artwork was created because an artist wanted to simply express himself, all works were commissioned and the client had his say on what and how to paint.

The Renaissance brought something new to the art marketplace. Sacral art turned into fine art. It became an object that could be valued accordingly to the fine artist’s talent. The value of the artwork stopped being measured by its size, amount of and price of art materials, and time spent by the artist.

The art became a commodity fetishism, it was idolized as the object itself, it was worshiped for the ‘power’ people assigned to it. Art workshops, run by professional fine artists, with the help of numerous apprentices, started to produce artworks that could be purchased not only by kings and church officials, but also by the middle class.

who ruin literally everything pure

The demand of those private citizens shaped the fine art market for the next 500 years. Art styles came and went, fashion was being changed from generation to generation by new consumers, but art managed to stay civilized and fulfill its primary purpose – to be a beautiful object that deserved to be admired, loved and worshiped.

There has been always progress in fine art. New generations of fine artists were coming and competing for the attention of clients. Those who were brave enough to reject old styles and create new ones left many ‘isms’ in the history of modern art: impressionist, cubism, modernism, supermatism, and so on. Seeking awareness by any means and making bold and revolutionary statements, brought many artists into the spotlight of the media. Somehow traditional art skills started to be replaced with creativity.

talent is equal, an overturned chair is equal to the Mona Lisa

After the Second World War, art had entered its contemporary phase. The market ideology was masterminded and financially fueled by those whose intention it was to use contemporary art as Cold War undercover propaganda weapon. Billions of dollars were invested into the promotion of contemporary art. Multiple private foundations became subsidized, funded and ruled by one governor – The Central Intelligence Agency of the United States federal government.

confirmed

These foundations were and still are actively advocating and pushing contemporary art to the public. The main objective of this activity is to destroy traditional ideals of fine art and superimpose new values and morals of life. The main strategy of achieving this goal is brainwashing the public via mass media and cultural events.

If they say long enough that a piece of garbage is art, then gradually people will start believing it. If someone buys that garbage for an insane sum of money, then it becomes officially confirmed as the greatest art ever created.

The price of artwork was no longer linked to the talents or skills an artist displayed. The price was created by inflated demand, fueled by PR and marketing efforts invested in the promotion of a particular artist. The contemporary art marketplace had shifted the focus of attention from a particular masterpiece to an artist’s name. The painting, drawing or sculpture itself becomes less important as the name of its creator….

cultural QE, reducing the value of real art

Contemporary artists in Europe were deprived of conventional fine art education – the vast majority of art students graduate having no classical drawing skills, whatsoever. Today, there is only handful of fine artists around Europe, who’ve developed their skills to the level equal or greater than a mediocre fine artist of the Renaissance.

a single tear michael fassbender crying

In fact, a new saying has developed: “He is not a contemporary artist, he can draw.”

There is a reason why new artists cannot draw. Their teachers have graduated a decade ago; they are not able to teach what they have not learned from their teachers who graduated two decades ago. Instead, they lecture how to be creative.

I cannot cover any more of this wonderful article, it’s too distressing.

The 19th century was the one where art began to run downhill into a pretentious market

Into the abstract abyss.

http://www.spectator.co.uk/books/books-feature/9269031/a-strange-business-by-james-hamilton-review/

There are very many familiar things here, and it is not hard to suggest modern-day equivalents to the hard-nosed dealer, the artist with more of an eye on capitalising his talent than developing his skill, the collector who buys and sells with such rapidity that he could really best be regarded as a species of dealer.

One thing that does differentiate the 19th-century art market from the present day, however, is the greater danger of a crash in value, of the money underpinning an artist’s career simply vanishing. That seems much less likely to happen to an artist now. [DS: cocks an eyebrow] The difficulty is in succeeding in the first place, not in hanging on to an income once success has been attained. It is quite hard to think of a school of art, or an individual artist, that was once considered excellent and valuable whose prices have collapsed utterly. The reason, I guess, is the creation in recent years of art-market indices, which purport to show collector/investors that the price of this artist has gone up and up, and must therefore hold. [faith holds it]

The 19th century, which at a certain point looked at the painting on the gallery wall and thought ‘I just don’t like it any more’ before walking off to buy something more fashionable, was a much more precarious period for an artist to exist within. To a large extent, these artists and dealers were still learning how to rig the market, and were not very good at it.

This is a brilliant account of learning, or failing, to survive in a market of extraordinary brutality. The interesting question is how far this market also succeeded in creating artists of the highest quality and innovative power. [it hasn’t, it failed completely]

FT Article: “Everything is rigged, art edition”

What did I say?

I saw it coming and I still don't care, funny really

article here; in full;

“John Gapper has an excellent column on Thursday about art auctions, focusing on the degree to which they are fixed or obfuscated by insiders and long-standing established practices.

As he notes, the auction market is a duopoly geared towards protecting and serving vested interests through a system of guaranteed bids and sales incentives, which to some degree obscure public price discovery.

Herein lies the similarity with modern market structure more generally. By providing the means to disguise the hands of “informed” players, the duopoly of Sotheby’s and Christie’s behaves like a dark pool system within a wider market which has no public alternative to cross check prices against.

That is to say, it is a public market, but one that’s structured specifically to reduce the impact of the informed players who have most to lose.

As Gapper says:

Art auction houses bring together buyers and sellers in what is at least an approximation of a public market (allowing for tricks of the trade such as “chandelier bids” made up by auctioneers to meet the reserve). Without some transparency at such auctions, the entire market is vulnerable to fraud.

As Gapper also notes, the auction houses will sometimes waive the 10 per cent seller’s fee to secure prestigious works and even offer something of a rebate to the seller for the opportunity to gain his business. Some sellers may demand a guaranteed bid as well, i.e. the promise from the auction house that they will buy their work if a better price doesn’t appear.

Just like in the world of stock market trading the battle is over top quality flow, with auctioneers acting both as the platforms that facilitate exchange as well as market-makers who can internalise order flow and take real risk if and when it suits them.

That market-making side of the business proved risky for Christie’s in 2008. The auction house was left holding up to $50m worth of work it could no longer shift.

But in another parallel with what’s happening with stock markets, the auction houses have learned a valuable lesson. Yes, they still provide guarantees — since those guarantees generate business, flow and help to support prices — but they offset that risk by striking up deals with collectors or dealers.

As Gapper notes:

The latter put up their capital in return for a fee, and a share of takings of a strong auction. Sotheby’s disclosed in April that it had made $279m of guarantees, of which $65m had been laid off to third parties, and the latter figure has since risen.

This, of course, echoes what happens with exchange traded products (ETPs) in regular markets. It’s just that rather than pre-agreeing arrangements in which risk is passed off for a fee, market-makers in regular markets use ETPs as an extremely cheap parking lot for inventory which it doesn’t suit them to budge right away. In fact, it’s better than that. With ETPs institutional money is actually paying the dealers — or the market arbitrageurs — a fee to provide them with the opportunity to absorb flows no-one else wants at that time.

When guarantees are forthcoming (indicated by strong ETP inflows) the dealers can shift ever greater portions of risk off their own books. In the inverse scenario (indicated by strong ETP outflows) the risk passes back to the dealers who are then inclined to dump stock into the market, but with the advantage that they know what’s about to hit the market as a result.

In the art market, Gapper says a sophisticated collector can get a good return form being a guarantor (by sitting on stock). In financial markets, a sophisticated collector of stock, will end up paying the middle man for what is basically the opportunity to liquidate the stock he holds on demand.

Seen from this perspective, the dynamics can to some degree be compared to those of a risk-transferring futures market.

In fact, when it comes to the art market the work of Prof. Rachel Pownall of Maastricht University, argues this point eloquently.

As she notes in a presentation shared with FT Alphaville via John Gapper, the guarantees offered by the business represent formal structures and contracts for transferring risk. This provides the market with the opportunity to introduce further structured products for hedging purposes using an index as the underlying asset if it so desires.

The problem the art market faces, however, is that any such index would suffer feedback loop effects from the products themselves. The more people who invest, the more likely the index goes up in price, irrespective of any physical demand for the underlying products themselves.

But then who needs to enjoy the aesthetic beauty of art if it’s real purpose is providing the world with investment assets that only go up in price?

In that sense modern art is much more Bitcoin than Leonardo.

It also means the more financialised the artworks get, the greater the incentive to have them go dark, ideally by storing and forgetting about them in bonded warehouses in tax efficient jurisdictions.

On that basis we presume a bunch of limit-order, hoard exposing HFT types would not be appreciated in this market either.”‘