Sunday, April 30, 2006

Rolling Stone stones Bush

At the risk of preaching to the converted, I would suggest reading "The Worst President in History?" by Sean Wilnetz in the Rolling Stone Wilnetz leads off with the line
"George W. Bush's presidency appears headed for colossal historical disgrace…"
followed by
Now, though, George W. Bush is in serious contention for the title of worst ever. In early 2004, an informal survey of 415 historians conducted by the nonpartisan History News Network found that eighty-one percent considered the Bush administration a "failure."
It just gets worse from there, another tidbit…
"Armed with legal findings by his attorney general (and personal lawyer) Alberto Gonzales, the Bush White House has declared that the president's powers as commander in chief in wartime are limitless. No previous wartime president has come close to making so grandiose a claim. More specifically, this administration has asserted that the president is perfectly free to violate federal laws on such matters as domestic surveillance and the torture of detainees. When Congress has passed legislation to limit those assertions, Bush has resorted to issuing constitutionally dubious "signing statements," which declare, by fiat, how he will interpret and execute the law in question, even when that interpretation flagrantly violates the will of Congress. [emphasis added]

What appalls me is that the voters of this country, allegedly elected him twice.

Late breaking update: Rumor has it that the private fund raising for a George W. Bush "presidential library" has run into difficulties as his NeoCon supporters have decided that a book burning to destroy the evidence would be a better option instead.

Friday, April 28, 2006

Irony I'm home.

Edna has written what I feel is an important observation on the contemporary use of irony in art. What prompted her commentary was Jerry Saltz review in the Village Voice of Amy Sillman's current exhibition at the Sikkema Jenkins Gallery. I took the time to go see this exhibition of paintings this afternoon. Although I will make some personal observations on Ms Stillman's paintings what also interested me were Edna's observations about irony and how it's pervasive use might be distorting our current perceptual approaches towards art.

Lets be pedantic about it, irony:
1. The use of words to express something different from and often opposite to their literal meaning.
2. An expression or utterance marked by a deliberate contrast between apparent and intended meaning.
3. A literary style employing such contrasts for humorous or rhetorical effect.

To her credit Edna doesn't mince words and starts off describing the problem bluntly.

"You're basically doomed because irony has fucked up your sense of what is legitimate investigation and how to communicate it honestly once you find your groove."

This is a poignant observation. If an artist looks to the past, or any other source, for inspiration, for guidance or a place to start an investigation, must this position be viewed as ironic because of its reference? While one may or may not intend such a reference to be read as ironic, certainly one cannot assume that all references are necessarily ironic. Aside from just a point of departure, a reference may also be used, without irony, as a mode of content by addressing the viewers memory or awareness of a particular context. To ascribe irony to these other frameworks strips them of their true meaning and potentiality. It is one possible point of view but not the only point of view.

"The inroad to irony is so internalized that it manifests itself as compulsory abjectness."

Another astute observation. Irony in itself is interesting. Unfortunately, instead of an insightful contrast or dislocation, often wearing the cloak of humor, irony has become an excuse for artworks of questionable quality instead of raising a thoughtful criticism of their potential weakness

It's a mannerism.

Dead on the money.

Jerry Saltz makes the observation that "There are still no memorable images in the eight paintings in her current show..." [Saltz, Village Voice]

Edna counters with several questions.

"Memorable images. Are they really not memorable, or are they just subtle in a way that doesn't register as fresh or clued-in, i.e. pertinent?"

"Is the feeling of something when the thing itself is out of reach, and the images can't present themselves in any totality, really out of date?"

"Isn't it a slower, more in-depth investigation; the opposite of the forced, quotation-like narrative we've come to define as clever?"

I am not sure that "fresh, pertinent or up to date," are qualities necessary for a "memorable image." Certainly they may be qualities possessed by a memorable image but over time these references fade and we are left to deal with the paintings as they are in some future historical moment. In this respect I would agree with Edna's observations. Certainly the application of "irony," regressive or otherwise cannot guarantee a "memorable image." To Saltz defense, he tries to infer what he means by "memorable image" by making comparisons to other paintings. The difficulty here, for the reader, is in the misreading of the inference that one style or another might possess the secret.

The problem is that language is ill equipped to define the requirements for a "memorable image." In particular because the qualities of a "memorable image" are not linguistically defined but experiential. The recent Fra Angelico exhibition at the Met is a case in point. These were terrific paintings, memorable images. In spite of the fact, for most viewers, the linguistic or symbolic meanings are not immediately accessible, the paintings still move us. We have an emotional experience, a positive response, we like it or we don't based solely on what we experience visually. Five hundred years after their creation, we are bringing an entirely new viewing context to these paintings and potentially we still can have a meaningful experience.

"Has irony disabled our ability to build formally on history in an effort to enforce some kind of time stamp for the present?"

I suspect the overuse of "irony" is another passing fad. The "wink wink nod nod insider joke" was a useful marketing tool but when everyone has one, what good is it for distinguishing one brand from another? Ironically, critical analysis should view irony as irony but also directly address other critical issues without allowing "irony" to function as an excuse for weakness in these other areas.

Finally, I want to return to Amy Stillman's paintings and the "memorable image" question as it is directly applied to her recent exhibition. There is a difficult to define quality I would use for a memorable image. The term I use is "presence" An analogy for the experience would be the awareness of a particular person who walks into a room and holds your attention. Marilyn Monroe on the silver screen (yup, I'm over 40)

What gives a painting presence? While any of the intellectual, conceptual or symbolic attributes may be part of the issue, as I described above with Fra Angelico, they are not necessarily a requirement. Neither is color, scale, or technical facility, although any of these may also contribute to the quality.

Presence occurs because the painting exists as an ontological object. It is a self contained definition of itself which does not require outside mediation for completion. Experientially, one feels the painting is insistent of itself. It declares its identity as singular and actively present in the real world of objects. When a painting has presence it holds your attention.

Presence is a quality inherently in the painting, or not. With some radical paintings it may not be perceived by all viewers but if it is there it is there. It cannot be added on by critical discourse after the fact, it has it or it doesn't. To confuse the issue I would accept that there are varying degrees of presence but what I am most interested in is "insistent presence," the case where you know you are in the "presence of."

In the case of Amy Sillman's new paintings, I somewhat agree with Jerry Saltz. I am a fairly generous observer and I thought she had a good exhibition. I liked the paintings. From my point of view, I don't think the issue of "irony" is applicable to her work at all. Sillman's paintings seem like they are an honest personal investigation of how one can make a painting. Where I think some of the paintings might be problematic is that they did not seem to have a sufficient enough presence to overcome just looking like good paintings. What I mean by this is that there is a disjunct between the image of the painting and the painting itself. By image, I mean how the whole painting appears, the "picture of itself." This may sound contradictory but "the picture" is like what you see in a jpeg, the image of the painting. This must be coincident with the experience of the physical painting itself. More attention paid to edges might be a potential solution to this issue.

Of the group, the painting in the front named "The Plumbing" was the most memorable for me.

Friday, April 07, 2006

Allan Kaprow 1927-2006

Allan Kaprow. "Yard" View of tires in court of Martha Jackson Gallery, New York 1961.

I still have a vivid memory of this work which I saw at the Pasadena Art Museum in 1967. RIP

Saturday, April 01, 2006

The Art Market on Wall Street

One of the major auction houses, Sothebys, is a publicly traded company. Its stock is listed on the NYSE with the ticker symbol BID. Without going into a lengthy discussion of what makes stock prices go up and down, I will just suggest it is the perceived prospect for future earnings and investor enthusiasm. If this is the case, I thought the stock of Sothebys Holdings might be an interesting proxy for the art market.

If Sothebys earnings are good or improving we could infer that the art market is strong as well. Is this the case? Here is a chart from for Sothebys, NYSE:BID

I have marked in with red and green my observation that there is a potential symmetry in the price movement. Curiously, on the right side of the chart, it suggests a potential peak in Sothebys stock in mid 2007. If auction results continue to be strong, we could expect Sothebys earnings to increase from the current $1.00 per share (this is the trailing 12 months number) and for the stock price to follow.

The prospect for future earnings is one part of the equation, the second is investor enthusiasm. What causes investor enthusiasm? Investor enthusiasm is the result of seeing the obvious, good earnings and a strong interest in the art market. Unfortunately this often cumulates right near the peak in the stock price, all the good news is factored into the stock price and the uninitiated are projecting similar increases into the future. Sometimes this is the case, more often not, the stock price peaks and begins its decline right when earnings and news look good.

For most, it is difficult to correctly analyze the companies prospects, so is there another way to look at the situation for warning signs that things may not be as good as they look?

Yes. In the Sothebys chart, the periods 1989 and 1999 saw a sharp upward spike in the Sothebys stock price. These sharp spikes are an indicator that investors are enthusiastic, have finally recognized how strong Sothebys markets are and they bid up the stock price. Unfortunately, the art market is cyclical and these spikes will tend to also occur near peak periods in the art market. On the other hand, if the stock price rises in a more orderly fashion, without the three month price spike, it would indicate the strength in the art market might be growing but at a more moderated and therefore sustainable rate. Unfortunately I do not think this is the case.

Looking at the current chart, it appears that Sothebys has started an accelerated move higher. The bars on this chart are monthly, so this can continue for awhile with the stock price moving into the $40 or $50 range. This is not a done deal but if a spike to $40, $50 or $60 does occur, it will probably be a very good sign that a decline in the art market is just around the corner.

Although there is not much historical data available, the price action of Sothebys may also be a good indicator of the overall art market. I will continue to keep an eye on this and update my observations as we go along.

Legal disclaimer: This comment should not be construed as investment advice, consult your financial advisor.

Has the Art Market Peaked?

New York Magazine has a recent article titled Five Theories On Why the Art Market Can't Crash, and why it will.

I have written two previous posts on related topics Art Money and Fashion and Looking at the Art Market at the Start of the 21st Century which deal with money and the art market.

I am just an artist but I have spent twenty years studying the psychology of the financial markets and have more than an passing understanding of market psychology. I have traded financial instruments through two major crashes, 1987 and 2000, and understand a bit about the psychology of the participants.

I want to begin by redefining some terms. The word "crash" is generally used in a couple of ways. The best definition is a "panic" in the market, emotional or forced selling at any cost, "just get me out". In the US stock markets, the Crash of 1987 was a panic which saw very rapid price depreciation in a very short time. In contrast, the Millennium Crash in the us markets, during the years 2000 to 2003 was an extreme price devaluation, many issues losing 95% of their value during this period, I would liken this to a slow motion crash.

The other, more applicable, financial term which could be applied is called a "Bear Market". In a Bear Market prices decline in a zig zag fashion for the duration of the "Bear" typically 1 to 3 years.

I am not going to use the term Crash for the sake of this discussion, it is a loaded word which does not adequately apply to the current situation. In past periods, the closest thing to a crash probably occurred in the late 70's during the first oil price crisis. I do not have any accurate data for the period, but my recollection was that the art market just shut down. Yes, artworks continued to be bought and sold but there was great financial stress on the US economy and it had a severe affect on the art market.

The art market slowdown in the 1990's, I would characterize as a bear market. Again, my opinion is only based upon observation, but it did not appear to me that this contraction had anywhere near the same impact as the 1975-1982 decline.

Of course if one runs a gallery and sales decline by 50%, you will be apt to correctly call it a crash. What becomes important in this situation is how long the sales decline lasts, a year or maybe two I would call a contraction or bear market. Five years is a prolonged crash.

Can this happen in the art market at the current time? What might be the warning signs leading to a bear market? What other factors could initiate or accelerate the process?

In my opinion the art market is peaking
In the financial world, this is called the topping phase, prices become more resistant to upward pressure as the insiders distribute or sell their artworks to other collectors. The psychological error, made by the new buyers, is that prices will continue to rise at the same rate as before. This increase is exponential and rapidly becomes unsustainable because there is just not enough capital available to support any further rise. I will agree that selected artworks may achieve new record high prices, this is a function of their uniqueness, but overall prices as a whole begin to resist upward pressure.

Another worrisome characteristic of the current art market is it's frothiness. This is a psychological description for the "over excitement" of the players, the fear of "missing out", the "$1000 a pop events", splashy articles on artists in Vogue, you get the idea. Frothiness is a sign that a market is in the process of topping because the participants have become overconfident.

Also, the art markets do seem to track the US stock market and a decline in the stock market will have an adverse affect on the art market. At the moment, my best projection for the US stock market is that it will peak in the first quarter of 2007 and then steadily decline in stairstep fashion for 12 to 18 months.

Finally, inflation is a factor. I expect inflation to increase steadily but not exponentially for the next several years. While this should help the art market I suspect that many artworks have inflation priced into them. This means that the price increases have risen at a rate greater than one would anticipate due to inflation alone and leaves their pricing vulnerable to other factors.

Crucial factors affecting recent art pricing
The first one is obvious, supply and demand. It is my theory that the accelerated prices achieved for the work of "emerging artists" was driven by the lack of supply. There was a lot of new capital flowing into the art market and not enough goods to fill the demand especially in the lower price tiers (under $50k). The demand was filled by promoting "emerging artists" to a degree which was unusual, to say the least. I commented on the mechanics and reasons behind this condition in my two earlier posts linked at the start of this article.

With the increased number of galleries and new artists, I believe that the supply has caught up with the demand. The danger in such rapid price acceleration for emerging artists is that the pricing eventually collides with the prices of artworks by more established artists. At the current time it would be rational to expect a more moderated approach to the pricing of these artworks and more emphasis to be placed on the actual quality of the works offered for sale.

Another, and more onerous factor which could initiate selling pressure in the art market is the recent rise and number of "speculative buyers". Speculators buy something because they feel the price will rise, quality and value are secondary factors. To the speculator it is a game, where winning is everything and the true speculator will cut his losses and run if he feels he is going to lose. This group of art buyers are dangerous to the health of the art market. They act like daytraders and help drive the swings in fashion but have less of a long term commitment to the art they buy and sell. They become new supply in the marketplace and put downward pressure on prices.

Finally, the there are the "investors in art" This would include the various art hedge funds and other wealthy collectors who now consider art as an "alternative investment" While this group may have a financial motive for collecting art, my sense is that they are making longer term investments or buying art because they love it as well. This group will tend to buy higher priced artworks with established validation, perceived quality and liquidity. In a price decline artworks may be bought or sold depending, more on personal or fiduciary circumstances, than emotion and provide some degree of stability in the market. I must note, that this does not keep prices from declining but it does mean that these artworks will have some liquidity if they need to be sold.

Specific warning signs I would watch for.

Froth in the marketplace, covered above.

Last week I took a look at the recent auction results at Sothebys. The auction was a mixed collection of larger and smaller works covering a fairly broad spectrum in time and quality. I started off paying attention to the "bought ins" especially by better known artists as well as where prices fell in the estimated range. Then I noticed something I found curious, a number of lots went off at odd prices, like $6215. Now I am not sure if this is a result of tacking on the commission or whether the bidders were nickel and dimeing each other. Pricing psychology fixates on round numbers, particularly the numbers divisible by 2, 5 and 10, so I wouldn't be surprised at a $10,000 or $8,000 price but a number like $8,230 would indicate some reluctance on the part of the bidders to bite at "make it $8,500 or $9,000"

In the May, the Blake drawings are being auctioned separately by Sothebys. I commented on this decision harshly in a previous post and I feel that if the total for the whole set does not meet or exceed the high estimate (the greed number) it's a bust and a warning sign. Regardless of the press spin, things are not as good as advertised.

Finally, I would watch the fall auctions. Odds favor some sort of initial stock market decline in the fall before the final peak in the first quarter of 2007. If the auction market shrugs off the fall stock market decline (if it happens of course) that would be favorable.

In the past hard assets usually are in favor during the initial phases of a stock market decline. This would lead me to suspect that the peak of this cycle of the art market won't actually occur for another year.

Will the art market "crash"

This depends on what you want to call a crash. I have stated previously that I believe some of the increase in the size of the art market is structural and caused by the unprecedented generation of wealth during the last part of the twentieth century. This is not to say that the art market could not suffer a contraction, a bear market.

I strongly suspect a bear market in the art market will occur starting in 2007 at the very latest and last at least a year possibly two. I cannot predict the degree of the contraction but I would suggest some of the artworks sold at what many perceive as inflated prices will fail to find new buyers. Unfortunately, for artists, I suspect gallery sales will contract and become more competitive based more upon quality than fashion.

Consider this an open thread.