[Reader-list] US: New York art market shows evidence of weakness

[Naeem Mohaiemen]

Money shot (or quote):
"The Damien Hirst sale went fine, but you could argue this sale was
the exception and therefore can't be relied upon. I would imagine that
people who have started buying art recently, many of whom work in
financial companies, may pull out now."]

Ain't it grand to be a aging tyro, a YBA forever. Hang on, let me see
if I can find a bachur or gabhi in the Dhaka livestock market that I
can dunk in mummy fat

- N


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Sign of things to come? New York art market shows evidence of weakness
Global stocks crash; buying drops at auctions in US and fairs in Korea
and France

By Melanie Gerlis | From News | Posted: 2.10.08

LONDON. The Asia Week auctions in New York were the first to show a
dramatic fall in revenue and buy-in rates since last year, suggesting
that the art market can no longer withstand the pressure of the
surrounding economic turmoil. In the same week, although nearly all
lots sold at Damien Hirst's solo auction at Sotheby's in London (some
of it to his art dealers), the Korea International Art Fair was hit by
the financial backdrop and buying also dropped at the art and
antiquities biennial in Paris.

In the space of a few days in September, the investment bank Lehman
Brothers filed for bankruptcy protection; the US's biggest insurance
group, AIG, was rescued from collapse by the Federal Reserve; and
financial corporations including Merrill Lynch and Halifax Bank of
Scotland (the UK's largest lender) were pushed into acquisitions by
their competitors. Market commentators were comparing the situation to
the economic gloom of the Great Depression, which began in the US in
1929, and warning that it could be at least five years before
stability returns.

There are still those who profess to believe that there are markets
that can continue to operate in isolation; auctioneers and dealers
have been saying for months that buyers from growing economies such as
China and Russia can make up for the likely retirement of western
buyers. But news of Lehman Brothers' collapse didn't only see the Dow
Jones fall 500-points: Asian stocks nosedived (the benchmark Shanghai
Composite Index closed down 4.5% on 16 September), and on 17 September
trading on Russia's main stock exchange—one of the best performing
indexes in recent years—was suspended following sharp falls in share
prices prompted by the news from Wall Street.

"There will be a tightening of belts," says Philip Hoffman, founder of
the UK's Fine Art Fund. Andreas Gegner, director at Sprüth Magers in
London, says: "September's news was more dramatic than we've seen
before and sent more alarming signals. The Damien Hirst sale went
fine, but you could argue this sale was the exception and therefore
can't be relied upon. I would imagine that people who have started
buying art recently, many of whom work in financial companies, may
pull out now."

Historically there has been a loose correlation between the wider
economy and the art market, which has taken around 18 months to react
to financial downturns. It is now over a year since the sub-prime
mortgage fiasco began to unwind.

October's Frieze Art Fair and the following contemporary sales in
London and New York will once again hope to defy economic gravity.