China Syndrome

Or how I learned to love the bomb.

Where to start? I was out on the town last night. The Saint Clair Cemin's exhibition was opening at Sikkema Jenkins and I wanted to say hello.

Saint Clair Cemin
Apollo, 2008
Bronze
72.05 x 39.37 x 19.69 inches
183 x 100 x 50 cm

It was a lovely spring evening, and there were a lot of openings, so I took the time a walk around. I made it as far as Pace on 25th Street where I was arrested by the crowd. (Well not exactly arrested, that happened on a previous occasion when I was ticketed for "possession of an open container..." but that's another story.) So Pace, what can I say?

The data transmission must have gone something like this.
?? ??,????
????? ?? ????? ????
Please to send 12 gross large teddy bear in brown color, item ????,???
???? ??????

So they did, but things got a little mixed up in the translation.

Zhang Huan
Giant No. 3, 2008

Ok, I'm sure I don't get it, but this teddy bear is the white elephant of the 2008 season, out-gauching even Piotr Uklańsk's recent effort at Gagosian It's BIG, as BIG as the gallery, HUGE, right up to the ceiling sprawled out in a corner, giving me visions of Josef Virek, as slumped jelly floating in his vat in Stockholm, only fuzzier. [1]

Did I say it was BIG? Well it was, a BIG lumpy form covered in a patchwork of hides, attached with nasty looking 3 inch fasteners that looked like staples. But it was BIG, looking like a teddy bear with a patchwork-leather-ghetto-pimp-disco outfit. Ok, so it was BIG. What's next?

In the adjacent room, Pace and Huan get down to business, after all, this extravaganza of excess must be paid for, right? After all, art is not leisure, right? [2] Anyhow, in the next room, there were several examples from Huan's series "Memory Doors" These pieces are exquisitely crafted, representational relief carvings made on old door slabs. When I say exquisitely crafted, I mean just that, the carving is amazing, grass or a tangle of branches reproduced in exquisite detail. These objects are visual puns, with deep perspective space and maintain ancient traditions of carved furniture. I missed the smell of aromatic cedar which was one of my fondest memories from childhood visits to the Chinese Antique stores in LA. While I found these pieces fascinating to look at, they were not satisfying after my initial viewing, I'm sure there is a joke in there somewhere, I'll let it pass.

Ok, so that's it, right? head out the door for the next gallery? Oh nooo, I hadn't noticed on the way in, maybe I was too early, but when I walked out the door, the whole fleet of Manhattan Pedicabs, replete with "Zhang Huan at Pace" advertising, were lined up out front like rickshaws in Shanghai, ready to ferry us to the 22nd street gallery. Whee! I walked, taking the time to let my stomach settle and for the painkillers to kick in. Off to 22nd street to see Saint Clair Cemin's exhibit, and the rest of what I was now realizing was the Chinese full court press of Zhang Huan and Pace.

Walking west, towards the setting sun on 22nd street, from a distance I spot two green and white striped circus tents, covering the whole sidewalk the entire width of the Pace space. In retrospect this may have been nothing more than a rain defense but it certainly added to the festivity, I was positively giddy by the time I was within striking distance. I noticed they were serving bottled water, lots of it, from the Yangtze river? No, but there was lots of it, rows and rows and rows of plastic bottles.

As I approached the gallery entrance, I had to wind my way between the poles supporting the tent, and the stanchions holding the black velvet rope which funneled an endless queue of visitors into the gallery. People undressed and left their coats with a coat check person, and entered the gallery queue to climb up onto the viewing ramp 20 feet above the gallery floor. I didn't, I'm afraid of heights, the painkillers hadn't kicked in and my knees hurt, so I just took in the ground floor tour. You couldn't see much, what felt like a metaphoric version of the great wall of China hiding everything, mondo scaffolding supporting the viewing platform, and a very elaborate rolling bridge which allowed the beautiful assistant to work on whatever it was I couldn't see behind the wall.

If I may digress for a moment and compare this installation extravaganza to the mechanics of an ink jet printer. An ink jet printer has three primary parts, a printhead, a carriage for moving the printhead, and a method of moving the paper. Huan's installation consisted of three parts as well. A long track, on both sides of the wall which allowed the gantry to move along the lengthwise dimension instead of the paper (well whatever it was down there, hidden from me) A gantry, which is like a bridge which allowed the print head to move back and forth across the width of the paper. Seated on the moving platform on the gantry was the printhead, the beautiful assistant who was consulting a photograpn, selecting the proper shade of temple incense ash with a delicate looking scoop, precisely dropping the spray of ash onto the image, forming one more of the thousands of fuzzy tonal dots which visually coalesce into the image. There were two examples, around the corner a skull which I liked and some MIG 15's on multiple panels which I thought were less successful.

With all the ash around, the fire department eventually came rolling down 22nd streets, flashing lights ablaze, and sirens blaring, I think it was a false alarm but by then, after having looked at Saint Clair's surrealist sculptures and talking with a few people in the gallery, I was out in front of Sikkema Jenkins not smoking a cigarette after sex, but wishing I was. I didn't bother to go see what really happened.

The sun went down, and I started walking east towards the 23 street E train. Waiting with me on the platform was a gentleman I had seen in the gallery and we spoke a bit until the train came. Sitting on the plastic bench seat of the E train we continued our conversation and eventually I asked him his name, "David Diao" he replied. To understand the serendipity in all this Catherine Spaeth's blog has a nice piece on David's paintings which I commented on. We looked at each other in surprise and thought "it's a small world"

Finally, to leave you, the reader with an image which sums up the last few years in the art world. Recall a few auctions ago, the swarthy "mystery man," frantically waving his paddle from the back of the auction room, indicating he was willing to spend over one hundred million dollars for a Picasso. Something changed that day in the art world, greed took on a new dimension.

[1] See, William Gibson, "Count Zero"
[2] Julian Schnabel, "Art is not leisure; art is a utilitarian thing that people can use to find a way into their interior life." :-)

Thomas Nozkowski at Pace

Recent Work - April 4, 2008 - May 3, 2008

Awhile back I stumbled upon a small group of Thomas Nozkowski's paintings on paper and was impressed by their inventiveness and visual variety. His current exhibition of paintings on canvas and paper at Pace continues the investigation I saw in the earlier works.

Nozkowski's paintings are abstractions in the classical meaning of the word. They appear to have come into being through a process of idiosyncratic observation. The key word is 'observation,' Nozkowski pays attention to how things appear in the world, not just their raw appearance or linguistic identity but how the bits and pieces, the visual clues, give shape to form and imbue it with identity, hence meaning.

Thomas Nozkowski
Untitled (8-108), 2008
oil on linen on panel
22" x 28" (55.9 cm x 71.1 cm)

How something looks, how a painting appears, is a result of a number of visual clues which the viewer attempts to identify as an understandable image. An understandable image can mimic the appearance of something in the outside world or be totally self contained. Thomas Nozkowski's paintings do both, they elicit associations within the real world of objects at a symbolic level. They also reveal the internal logic of their own making.

Thomas Nozkowski
Untitled (8-93), 2007
oil on linen on panel
22" x 28" (55.9 cm x 71.1 cm)

In the Untitled work above, there is a loopy brownish-red line which anchors the painting. This simple form, or trajectory, creates the picture, other pictorial elements are attached to it, contained by it, or generated by it through repetition or mirroring. It controls the space, as inside or outside, figure or ground, or just as a mark on the surface. The little geometric bits and pieces, can allude to decoration on a surface, creating a fleeting focus or identity as 'something,' the edge of a piece of crockery or plate, or not, depending on the viewer.

Thomas Nozkowski
Untitled (8-103), 2008
oil on linen on panel
22" x 28" (55.9 cm x 71.1 cm)

One of the qualities that impressed ma about Nozkowski's paintings is the broad vocabulary of pictorial methods he employs. As a group, his paintings have an identity but this identity is generated by a personal vision and not the result of a pictorial strategy or program. Within the body of work exhibited there is considerable variation form one painting to another in how they are executed, stylistic decisions serve to enforce and enhance the paintings content rather than just serve to establish a brand identity.

Thomas Nozkowski
Untitled (P38), 2008
oil on paper
22" x 30" (55.9 cm x 76.2 cm)

Looka like a cow to me, maybe a quilt...

I saw Tom's show a couple of weeks ago with a friend who is also a painter, we both thought it was the most memorable exhibition we had seen that day.

More images: Thomas Nozkowski - Pace

Tingley

Jean Tingley
Unknown Title, 1960's?

I was just wandering through the Met and this Tingley sculpture caught my eye. I didn't write down any of the details and strangely, the Metropolitan doesn't give any via the web search. Odd. Whatever, it's a really nice piece, the precursor of a lot of later explorations in this direction.

My first studio was across the street from a mom and pop junk store. This owners were really a couple of dyed in the wool packrats, their 'lot' was roughly 100 x100 feet and packed ten feet high with every sort of imaginable (and unimaginable) junk, old bedposts, broken furniture, car parts, you name it they had it, somewhere back there, pointing. Tingley would have had a field day.

The Persistence of Johns

Note: the exhibition, Jasper Johns: Gray at the Metropolitan Museum of Art closes this Sunday May 4th.

"The exhibition examines the use of the color gray by the American artist Jasper Johns (b. 1930) between the mid-1950s and the present. It brings together more than 120 paintings, reliefs, drawings, prints, and sculptures from American and international collections." [Met PR]

Two exhibitions I've seen recently, the De Kooning's at the Larry Gagosian Gallery and the Jasper Johns, "Gray" exhibition currently at the Met, have impressed upon me a sense of the personal core of these two artists work.

With DeKooning it was an appreciation of his personal sense of line, a line which flows through the arm to the tip of the brush, a fluid response to muscle decision, a broad sweep from the shoulder, or just a whip from the wrist. The works in the exhibition covered a period from the mid forties to the end of his career. What I came to appreciate was how this sense of line was the backbone of the work throughout his career, not just in the high period of the fifties but in the periods which followed as well. Regardless of the stylistic changes that occurred as his career progressed, this sense of line held it together. I ended up feeling that his later paintings hold up better than many would suggest.

I have always been receptive to the physicalness of Jasper Johns works, the objectness of his paintings and density of marking in his drawings. Iconographically his paintings are generally based upon the simplest of assumptions, a flag, a map, a word, letters or numbers, all taken somewhat literally and put into the service of a painting. One can approach his works from a conceptual viewpoint, but while this is somewhat interesting, there is not really much there. His basic motifs are easy to grasp and I would suggest they are not at the core of what makes his works so important.

After walking through the exhibition a couple of times what truly struck me was the persistence of Johns. This is a quality which underlies all his works over the last fifty years. It is a persistence of will, of the intention to make the painting or drawing physically present in the world.

It has been awhile since I have seen the small painting on paper, "Liar." It has a simple motif, a gray square with the word 'LIAR' centered at the top, flipped up above it is the word LIAR in reverse, as a printing block or stamp. It's all very simple, a nice play on words, liar, lair, and rail. (upside-down and backwards) I could run off a stream of associations ending in caboose, but none of them would make this work as convincing as I feel it is. I picked this particular piece to start because I feel it reveals the conundrum in Johns' work, that the conceptual is the lair for the work, the scaffolding or foundation which Jasper Johns utilizes as a structure for his persistence of vision which ultimately allows him to manifest and see the work for what it is, itself and nothing else.

Everything in "Liar," from the choice of paper, the stains, pencil marks, relief and gray encaustic, build up to a finality which is "Liar," the physical result of the vision and activity of Jasper Johns at a particular place and moment in time. Now I realize that one might say I could say the same thing about any artwork, but this is not the case. There is something else which comes across to us in Johns' work and I think it is our ability to sense his 'persistence,' a desire to take the work to an ontological state, it exists as what it is and is complete. Wholeness. This is particularly difficult to do, for it is not always clear what the final state should be in order to transmit this sense of completeness, Johns works persistently towards this point, successfully or not. It is the sense of this persistence of the quest, which I feel is the true content of his works.

Jasper Johns
Liar, 1961
Encaustic, Sculp-metal, and graphite on cream wove paper;
21 1/4 x 17 in. (54 x 43.2 cm)
Collection Gail and Tony Ganz, Los Angeles

I had not seen the painting "Within" before, I snapped the photo of it shown below. At first I took it to be another variation on the flagstone motif paintings until I noticed it was painted over a cross hatch motif form an earlier period. After the fact I discovered the painting is dated 1983-2005 and I assume it sat around in his studio unfinished for several years, its final state morphing with age, drawn by a fleeting but persistent pressure towards what is finalized here.

Jasper Johns
Within, 1983 & 2005
Oil on canvas and wood with objects
101 1/2 x 72 x 3 in.
Collection of the artist

While the premise of this exhibition is 'Gray,' most of the included works are executed in primarily gray, I have never thought of Jasper Johns' works as colorless, even the gray ones. The gray colors, hues which are desaturated revealing themselves only by close proximity comparison, allow other aspects of the works to come forward, the drawing, elaborate surfaces, brush marks and a sense of luminosity or, as the case may be, the sense looking into lightsink of darkness. "Between the clock and the bed" is one of the paintings from a series based upon a crosshatch motif. The physical presence of these paintings varies based upon the approach taken. In some of the paintings utilizing this motif, the image sits on the surface, as a pattern of marks, as they do in "Corpse and Mirror".

Jasper Johns
Corpse and Mirror, 1974
oil and mixed media on canvas
50 x 68 in.

In others, like "Between the Clock and the Bed" the tonalities of the grays become luminous, as if the painting was illuminated from behind, and glowing through the patchwork of map makers marks. These are not paintings which occurred from an idea, a conceptualization or impulse which lasted for much longer than deciding where to start. Ultimately Jasper Johns' work is about the persistence of vision, about looking, seeing, responding, painting, and looking some more until what he sees is, what is.

Jasper Johns
Between the Clock and the Bed, 1982-83
Encaustic on canvas (three panels
72 x 126 1/4 in.
Virginia Museum of Fine Arts, Richmond

An absolutely great exhibition.

Links:
Roberta Smith at the NY Times

Whois George Rodart?

It’s the game show answer to the question, "who writes FutureModern?" As an artist working in relative solitude I started writing FutureModern two years ago as a way of interacting with a larger audience.

On a hot day in the summer before last, I was walking through the cool dim room in the Met where the Christmas tree is now. It’s a gallery filled with artworks from centuries ago, artworks that I suspect not many people pay much attention to anymore. It happened to be a day when the news from Iraq was an order of magnitude worse than normal. It was an unbearable weight to consider, contemplating the viciousness of mankind as no better than the rest of the animal kingdom.

Yet, as I was walking through the cool dim room in the Met, the one where the Christmas tree is now, I experienced the opposite side to my despair, with an overwhelming sense of the potential goodness in mankind. These artworks from centuries past stand witness to the higher aspirations of mankind, it gave me a moment of peace. It was a profound moment, it is what art should be. It is why I paint and write about art.

For the past several years I’ve been working quietly in relative seclusion. In an effort to expand my audience, I decided I should change that.
This is my website www.georgerodart.com.   This is what I do.

George Rodart, "Vertigo"
2007, Oil on canvas, 28 x 36 in. / 71 x 91 cm.

The Guennol Lioness, oh my.

Tiny Sculpture Brings $57 Million, that's the AP headline on Dec. 5, 2007. Funny how money grabs all the attention.

Take a look at this small miracle of hand fashioned stone.
Forget about the money. Just look at this swirling form, human and lion merged, poses intertwined, what was this magician thinking? This mythic woman-lioness is facing us down with a penetrating sideways stare, her arms flexed, rippling in a muscular display befitting the alpha female. Five thousand years ago, some ancient tribe faced down and defeated a lioness, sowing the seeds of a mythology which was fertile for the next four thousand years. Looking at the face of the lioness, it should be clear that this carving was the result of close observation and that five thousand years ago, close observation of a big cat meant either victory or death. This small edifice became a fitting way to celebrate the victory, one which has entered into the collective memory of mankind. This seems like a good definition for art. It’s just a small piece of carved and incised stone, but what a piece of stone. WOW!

Guennol Lioness
A Magnesite or Crystalline Limestone Figure of a Lioness.
Elam circa 3000-2800 B.C.
Height 3 1/4 in. 8.26 cm.
Location: Sotheby's New York, 12/5/2007-Lot 30
Pre-Sale Estimate. 14,000,000—18,000,000 USD
Lot Sold.    57,161,000 USD (inc. Buyers premium)

Guennol Lioness - circa 3000-2800 B.C

Guennol Lioness - circa 3000-2800 B.C
Photos: © Sotheby's

The price is a record for a sculpture, etc... Link to Sothebys lot details, (requires registration.)

The State of the Art Market – An Analysis

One has to imagine the players were sweating bullets after the November 7th evening sale of Impressionist & Modern Art at Sotheby's failed to make the low end of the pre-sale estimates. What a difference a week made, the Post War and Contemporary Art sales came in strong, and everyone seemed to be breathing a sigh of relief.

This feeling of well being may be premature, as the auction markets are indicating that a topping process has begun. The rate of price appreciation peaked in 2006 and is showing signs of slowing, indicating increasing resistance on the parts of the new buyers to pay "any price" in order to participate. This is not to say there were no new price records set, to the contrary this was the case, but at a market peak, price records are the norm not the exception.

All this talk of money is enough to make one dizzy, it is confusing to say the least. It has less to do with the art being sold and more to do with speculation on a volatile commodity in a bullish price environment. So, I am going to take off my beret and have a look at the art market as an investment vehicle, as a commodity, a pound of flesh to be bought and sold.

"Capitalism I & II," 2006, Oil on Aluminum,
24 in x 37 in / 61 cm x 94 cm overall, 2 panels

Follow the money. Last year we saw several paintings change hands at prices which would have been unimaginable only a dozen years ago. Who would have thought paintings, and not just one painting, several, would sell in excess of $100 million dollars? What is happening?

In my previous musings on the art market I have mentioned the notion that we are living in an unique era, one that has seen an unprecedented creation of wealth world wide. The internet boom, the revolution in information technology, had an effect on the US economy unlike anything since the build out of the railroads at the turn of the last century.

In the developing countries, especially since the collapse of Communism, rapid economic growth has occurred in both the industrial and technological sectors. Without breaking down the details, it is apparent that personal wealth rapidly expanded at the end of the twentieth century.

The last bear market in art occurred in the early 1990’s and the auction markets that followed it into the turn of the century were not making headlines, prices were behaving more or less normally. Around 2002, a change seem to take place. After the bursting of the internet bubble, art was promoted as alternative investment, one that could perform on a par with the stock indexes. Whether or not this was true didn’t matter, it became fashionable to collect art. The result was an influx of capital into the art markets, it appeared to pick up steam around 2003 or 2004 and prices jumped.

The Range Shift. This is an important concept which may help explain some of the behavior in the art market. Markets may trade in an orderly fashion, typically range bound, for a number of years and then suddenly move higher, a lot higher. Typically, the participants who understood the previous range bound pricing, are caught flat footed, betting that the new market move is unsustainable, and that prices are "too high."

A good example would be the Dow Jones Index which made the breakout from the old sub 1000 range and made the sprint to 10,000. This move was accompanied by the doubters who perpetually suggested the indexes ‘had’ to return to the 1000 level, next week, or next month, whatever, they were wrong. This type of price change is what I call ‘range shifting,’ and it can occur without any apparent fundamental reason at the start.

This is what I believe occurred in the art market over the last five years. Prices increased suddenly, across the board, and rising prices draws in new buyers. New buyers push the prices higher, and the speculators join the game.

I believe art market prices have experienced a range shift, a ratcheting higher in prices, which is much greater than what we would consider normal price appreciation for artworks.

This is a once in a generation occurrence, the range shift is over, at best some market sectors are playing catch up but the rapid expansion in prices cannot continue going forward.

For example, let us look at Hugh Grant’s sale of Andy Warhol portrait of Elizabeth Taylor, "Liz," for $23.5 million. In the previous post I inferred that I thought this was an astute move. (For the record, I used publicly available prices, didn’t subtract the commissions, etc. It doesn’t matter, this is just a rough example.)


The Buy and Sell Reportedly, in 2003 Mr. Grant paid $3.5M (million) for the Warhol "Liz." This is just about the time I am suggesting the price range shift began. At the Christie’s auction last week it was sold for $23.5M, or roughly five times what he paid only 4 years earlier.

What’s it worth? A reasonable expectation for the rate of appreciation of an asset class like art works might be close to expectations for equities. The compound annual price appreciation for the Dow Jones Industrials, from the 19332 low to the 2007 high, is approximately 8% per annum. Since the bull market began in 1982, this figure is a bit higher at 11.4%.

Using stock returns as a benchmark, "Liz" should have been worth in the vicinity of $5M to $6M today, this range is calculated using 12% [DJIA] and 20% [NASDAQ] as a growth rate. Since $23.5 million is substantially above the expected price range of $5M to $6M we can either conclude their was a bidding war or that some other event is affecting pricing. If this sale was an isolated incident, then we could ignore the results as a statistical outlier. "Liz" was not an outlier, a number of paintings, across the board have been trading at significantly higher prices than normally would be expected.

This is the range shift, it appears that art prices got an additional zero as a millennium present. The new ten thousand is a hundred thousand, but not a "million" as some wag offered up.

Range Shift Confusion One of the interesting characteristics of the equity markets is that whenever there is an abundance of the participants in agreement, they tend to be wrong. If 65% of the participants think the markets are headed higher, it is usually a good indicator that a top is near. In other words the consensus is usually wrong. By the time everyone is in agreement, has read all the ‘news’ and understands ‘why’ prices should move higher, their is no one else left to sell to, poof!

I suspect many readers would like to think the art market is different, it is not. The art market behaves in the same way as other markets which are subject to the psychology of ‘group thinking.'

Participants tend to doubt the initial price increases. They tend to recognize when the market is hot. They tend to make straight line assumptions, tomorrows prices will behave approximately like today’s. They tend to increase in numbers near the market peak. There has to be someone to sell to, someone who is more optomistic than you, maybe they will be right, usually not.

It is the point about making straight line assumptionsabout price behaviour which is about to cause severe problems for the participants who are buying and selling art as a speculation. In particular for those new to the game of speculating on artworks may discover when it is time to "flip" they flop.

Buying at the top My stock player friends have a word for traders who buy at the top, they call them "investors." We might call failed speculators in the art market, "collectors."

Looking at the "Liz" price. From purchase to sale, the price of this painting appreciated at a compound rate of 61% per year.

This is a phenomenal rate of return. There is no way the buyer of this painting could ever experience the same rate of return, by 2015, at 61% per annum, the selling price would be $1,000,000,000 (a trillion bucks).

Suppose the buyer is only hoping to double his money. The buyer will calculate that if prices continue firm and the average return is about 8% per year, it will take seven or eight years for the painting to double in price to $47M.

While this may seem like a reasonable investment decision, it is based upon a faulty assumption which ignores the range shift principle. The range shift principle only implies that prices can move abruptly into a higher price range. Barring hyper-inflation prices will tend to revert to the mean, the normal expected price over time. Current prices are well above the mean, either they collapse or move sideways in order to normalize.

The green line in "Liz" chart above is the normalized 8% price growth curve, starting from $3.5M. Over long periods of time one would expect the price of "Liz" to approach this value. This means the new buyer should expect to hold the painting for at least 20 years in order to realize a 100% return on his initial investment. On an annualized basis, ignoring ownership expenses, the real return would be only 2.88% per annum. It is a lousy investment.


The Basquiat painting, "Black Figure" This work sold at Christie’s for $9.87M. I made an unfounded assumption that one might have been able to buy this painting in 1982 for $50,000. I’ve normalized all the curves to this price.

Based upon my hypothetical purchase price of $50K, the annualized price growth is 23.5% per annum. This is high but surprisingly close to the NASDAQ growth rate from 1992 to 2000, which was about 20% per annum.

While I believe a $10 million tag is a bit steep for any painting, I suspect the Basquiat was a better investment because the range shift was smaller, closer to $2M to $3M, rather than $18M for "Liz". Since the range shift is a potential price risk and definitely a potential extension of the holding time risk, a smaller value is more desirable.

Drawing Conclusions The Van Gogh buy-in is probably a good indication that the market has peaked in the historical sector. I believe that artworks over one hundred years old have been more thoroughly analyzed, that conniseurship and the quality of the work are more important considerations.

Vincent van Gogh, "The fields" (Wheat fields), 1890
Oil on canvas, 19.7 x 25.6 in. / 50 x 65 cm.
Sale Of: Sotheby’s New York: 11/7/07 [Lot 9]
Estimate 28,000,000 - 35,000,000 US$
Sold For BOUGHT IN

If we consider the psychology behind the failure of the Van Gogh offering, what can we conclude? First we can suggest that the pre-sale estimates were set to high and as a result the initial bidding momentum stalled, then stopped entirely. The obvious solution to this problem would be to lower the pre-sale estimate. This has the implication that prices are "soft" and that for the next auction the pre-sale estimates will probably be more conservative.

It is better to risk a slightly lower sales price, betting on good bidding momentum, than take the chance a greater number of artworks will be bought-in. If the participants see an increasing number of artworks failing to sell, they will become tighter with their bids, and prices will decline.

The damage has already been done with the resultd from recent Sotheby's sale of Impressionist & Modern Art. In spite of the very positive results for the following sales, the seed of doubt has been sown and both auction houses will think twice when making the pre-sale estimates. This is a psychological negative for prices and I believe it is also a leading indicator for the future.

The final factor, the major factor, is still the US economy. The current credit problems have the potential of become more difficult to correct. This may drag the economy into more than just a shallow recession I initially expected. So far the FED has cut interest rates another 1/4 point, but I think it will take more than that to solve the problem. It’s dicey at the moment.

Next, How is all this money stuff affecting art? Do we care?