Monday, August 01, 2016

If You Thought NAGPRA was Bad - Read This Spring/Summer 2016

Kate Fitz Gibbon and The Committee for Cultural Policy ( will soon publish a statement on HR1327 sponsored by Flake, McCain, and Udall. From everything we can see to date this will be a further incursion of the government into areas that they really don't understand. If you thought as a citizen under the U.S. Constitution that you would be protected from seizure of property acquired legally then maybe you thought wrong and that's the happy hunting ground we are moving towards now. Any reputable dealer, collector, or curator wants to avoid stolen property; however, we all who have experience with Pre-Columbian understand that the issue has been , is and will always be who defines the word stolen. We will keep you posted on what Kate says and we recommend you read her newsletter. JB

Washington, D.C - .Jul 19, 2016  — U.S. Sen. Jeff Flake (R-Ariz.) today joined U.S. Sens. Martin Heinrich (D-N.M.) and Tom Udall (D-N.M.) to announce the growing bipartisan support for the Safeguard Tribal Objects of Patrimony (STOP) Act, a bill they introduced earlier this month to prohibit the exporting of sacred Native American items and increase penalties for stealing and illegally trafficking tribal cultural patrimony. U.S. Sens. John McCain (R-Ariz.), Jon Tester (D-Mont.), Lisa Murkowski (R-Alaska), and Steve Daines (R-Mont.) have since signed on as cosponsors of the bill.
"I am pleased to join my colleagues in this bipartisan effort to stop the illegal trafficking of sacred Native American artifacts," said Flake. "These culturally significant and historical objects belong with the tribes, not the highest bidder."
"I'm proud to welcome the growing bipartisan support for my legislation to safeguard sacred Native American artifacts," said Heinrich. "The STOP Act will increase penalties for stealing and illegally trafficking tribal cultural patrimony. And it will prohibit exporting these objects and create a tribal working group to help federal agencies better understand the scope of the problem and how to solve it. The United States must do everything in its power to ensure that priceless Native American cultural items are returned to their rightful homes instead of being sold off to the highest bidder. I will continue working with my colleagues and tribal communities to ensure we build on this momentum so we can help repatriate stolen culturally significant artifacts back to Indian Country."
"I'm very pleased that this is a growing bipartisan effort. Cultural objects play fundamental role in connecting Tribal members to their culture and their personal identity, and this connection should be recognized and respected at all levels of government in the United States and abroad," said Udall. "These aren't items to be collected and exploited, and I will keep working with this bipartisan group--and alongside New Mexico's Tribal leaders--to ensure the penalties for stealing and illegally trafficking sacred Native American cultural objects match the significance of the crimes."
"Many of the cultural artifacts that this bill would protect have a special, sacred connection to Native American people, as well as their history and heritage," said McCain. "I have worked for many years to help protect these objects and keep them within the Native American community. I'm proud to see growing support in Congress of our legislation to impose stiffer penalties to stop these sacred items from being lost forever."
"Sacred items connect Native Americans with their vibrant tribal heritages and cultures," said Tester, Vice Chairman of the Indian Affairs Committee. "This bill will help put a stop to the illegal sale of cultural objects, and ensure that communities in Indian Country are able to preserve sacred items for generations to come."
"Through the Native American Graves Protection and Repatriation Act, Congress set national policy that cultural items and remains sacred to our Native families belong to the community--not museums, not collectors," said Murkowski. "But some of these items have managed to leave the country and find their way into the hands of collectors abroad. Through the STOP Act, we are taking a stand to put an end to this practice and taking a major step forward in repatriating those that have ended up in foreign hands back to the United States."
"It's critical that we treat Native American artifacts with the respect and protection they deserve," said Daines. "That's why I'm supporting legislation that will help protect objects of  tribal heritage and ensure they are preserved for generations to come."
The Navajo Nation passed a resolution supporting the STOP Act, and the bill has been endorsed by the Jicarilla Apache Nation, the Pueblos of Acoma, Santa Ana, Isleta, Zuni, Laguna, Nambé, Jemez, and Ohkay Owingeh as well as the All Pueblo Council of Governors, the National Congress of American Indians, and the United South and Eastern Tribes Sovereignty Protection Fund.
Specifically, the STOP Act would:
•Increase penalties (from a maximum of five years to a maximum of 10 years) for NAGPRA criminal violations to more closely match the National Stolen Property Act and other similar statutes.
•Explicitly prohibit the export of items obtained in violation of NAGPRA, the Archaeological Resources Protection Act, or the Antiquities Act. The French government has cited the lack of an explicit export prohibition as an impediment to enforcement of NAGPRA and related laws overseas.
•Establish a two-year amnesty period for individuals who voluntarily return all of their illegally possessed cultural objects to the appropriate tribes.
•Direct U.S. Government Accountability Office (GAO) to complete a report on the number of cultural objects illegally trafficked, both domestically and internationally; the extent to which the U.S. Department of Justice (DOJ) has prosecuted cases of trafficking in cultural objects or human remains; and recommendations for DOJ, U.S. Department of State, and U.S. Department of the Interior to eliminate illegal commerce in cultural objects and secure repatriation of such objects.
•Direct the formation of a tribal working group to work with the agencies in preparing information for the report and advise on implementation of the report's recommendations.
•On May 21, 2015, Flake and the Arizona Congressional Delegation sent a letter to Attorney General Loretta Lynch and Federal Bureau of Investigation Director James Comey asking for their assistance in helping the Hopi Tribe to recover and repatriate cultural artifacts from the Estimations Ventes aux Encheres auction house in Paris, France. The signed letter can be viewed here.
•On Dec. 12, 2014, Flake and the Arizona Congressional Delegation sent a letter to Department of State Bureau of Legislative Affairs Assistant Secretary Julia Frifield asking how the federal government can help the Hopi Tribe halt the sale of Hopi cultural artifacts at a December 2014 auction in Paris, France. The signed letter can be viewed here.

Thursday, July 28, 2016

Simpson Estate Auction to be Held in October

Indiana University Museum Fails Again Spring/Summer 2016

Editor's Note: Noted collector, scholar, and artist Ray Wielgus passed away in 2010 leaving his world class ethnographic collection and a large cash bequest to the Indiana University Museum at Bloomington.  Ray's bond with the University started in 1957 when he lent objects to noted African scholar Roy Sieber who went on to create more successful post graduates than anyone before or since. In short they were both immensely talented and very close friends. Ray committed his collection to Bloomington before Roy passed away. In the years following Sieber's death Wielgus continued his association with IU and his promised gift. During this time certainly from 2006 onward assurances were made by both Heidi Gealt and Diane Perine that a new installation was in the works. A number of Ray's friends including me pleaded with Ray to impose some sort of controls on his bequest to ensure that the collection would be reinstalled properly. Ray believed Heidi and Diane and rejected these oversight suggestions whenever it came up before his death in 2010. Almost immediately Ray's closest friends and his executor knew the bequest was not going to go as planned. Many of you reading this already know that I have already covered this failure to respect Ray's wishes in previous issues of the Newsletter. You can search on Bloomington and see the report of my trip in 2012 to the IU Museum. I did get some criticism from Bloomington for this negative piece on their museum.
Before releasing the final sum of money Tom Senkerik (Wielgus executor) and I agreed to meet with Heidi Gealt, Diane Pelrine, and University lawyers at the museum in April 2013. We were given assurances that the collection was to be reinstalled. Remember Ray's bequest included almost 2.5 million dollars in cash plus a collection worth millions, which I can personally confirm because I did the appraisal. In a letter to Jane Katcher in 2011 the University confirmed that they would need 1.5 million for the new installation. Obviously either the number crunchers can't count or the University's priorities are elsewhere. In light of the huge bequest from the Eskenazi's  and new director, David A. Brenneman, I decided to make another visit to the museum to see if IU President Michael A. McRobbie had kept any of the promises made by the University.  He didn't. As of July 2016 they updated the lights and move the pieces around a bit.. no new installation. As you can see below from the Kiwai piece, it didn't move. The standing figure from Angoram which we call "Big Red" moved from the edge of one wall to a corner. Both objects are easily accessible to anyone.

Kiwai figure 2012
Kiwai figure 2016

Angoram fig 2012
Angoram fig 2016

Obviously for the many the friends of Ray Wielgus and the  passionate supporters of ethnographic art there is little we can do now to move a 10,000 pound gorilla like Indiana University. Obviously, the leadership of the University counted on that. But for those of us that are still vertical we can certainly be more careful with our last wishes and we can certainly hold those in contempt that will do or say anything to further their goals. Just maybe as evidenced by both our political left and political right possibly we are ready now to confront and challenge leadership. I wonder how many years after Sidney and Lois Eskenaki leave this planet will Indiana University forget their generous gift. I am betting that will be a factor of how much money is on the line and how many in the Eskenazi family want to fight. I hope they do better for their patrons than we did for Ray Wielgus.

  1. BLOOMINGTON - Indiana University Art Museum receives $15 mil to renovate its IM Pei building
Sidney and Lois Eskenazi.
BLOOMINGTON, IN.- Indiana University Art Museum has announced a landmark gift of $15 million from Indianapolis-based philanthropists Sidney and Lois Eskenazi. This is the largest cash gift in the museum's history and a lead gift toward renovation of its I.M. Pei-designed building, which opened in 1982.
The museum will be renamed the Sidney and Lois Eskenazi Museum of Art in recognition of the couple's generosity, effective immediately.
In addition, thanks to the gift-matching program and other generous philanthropy of the "For All: The Indiana University Bicentennial Campaign," another $20 million will be invested by the university to be used for renovation and gallery enhancements at the museum. These improvements will be designed by Susan T. Rodriguez of Ennead Architects of New York City and Browning Day Mullins Dierdorf of Indianapolis, and are anticipated to be completed by 2020.
The Eskenazis are also donating their collection of nearly 100 works of art, composed primarily of prints by 20th-century European and American masters. The collection includes a significant group of 34 etchings, lithographs and drawings by Spanish master Joan Miró from later in his career (1960s-1970s), complementing the museum's existing collection of 35 earlier Miró works from the 1930s to 1950s.
Other artists represented in the Eskenazi collection include Marc Chagall, Alexander Calder, Pablo Picasso, Sam Francis, Tom Wesselmann, Jean Dubuffet, Salvador Dali and Pierre-Auguste Renoir. This gift also marks the first works by Keith Haring and Paul Jenkins to enter the museum's collection.
One of the foremost university art museum collections in the country, the Eskenazi Museum of Art's encyclopedic collection contains more than 45,000 objects from ancient to modern times, including one of the country's leading holdings of art from Africa, the South Pacific and the Americas, as well as an extraordinary collection of modern and contemporary art.
"For 75 years, the Indiana University Art Museum in Bloomington has been one of the premier university art museums in the world and home to an acclaimed collection of works of art and other important artifacts from nearly every culture throughout history that has produced art," IU President Michael A. McRobbie said. "The museum has been a superb complement to IU's internationally renowned programs in the arts and humanities and has enabled IU to share these riches with the world.
"This is a tremendous moment for the art museum, and we couldn't be more grateful to Sidney and Lois for this incredible leadership gift toward the renovation," said David A. Brenneman, the museum's Wilma E. Kelley Director. "It seems only fitting that we are embarking on this exciting new chapter with the renaming and renovation as we celebrate the museum's 75th anniversary this year.
"The Eskenazi Museum is an incredible resource for the students, faculty, the Bloomington community and the entire state of Indiana, and we will continue to look for ways to engage new audiences and foster the interdisciplinary collaborations made possible by being a part of Indiana University. We look forward to sharing more details about this exciting project later this year."
"With this gift we are combining two of our greatest passions: Indiana University and art," Sidney and Lois Eskenazi said in a statement. "We are delighted that our collection, which we have loved building and living with, will find a home at the museum. We are excited to be a part of such a transformative project for the museum and the university, and we know that the newly renovated museum will be a go-to destination on campus and for the entire Bloomington community."
Sidney and Lois Eskenazi are recognized philanthropic leaders in central Indiana. Sidney Eskenazi grew up in Indianapolis, and both he and Lois Eskenazi are Indiana University graduates. Lois Eskenazi earned a bachelor's degree that enabled her to work as a medical and lab technician, and Sidney earned a Bachelor of Science as well as a Doctor of
Jurisprudence. Sidney established a successful real estate development company, Sandor Development Co., in 1963 and has built it into one of the nation's leaders, with 129 properties under management in 23 states. In addition to real estate development, Sidney has been a member of both the Indiana and the Illinois bar associations for more than 50 years.
The Eskenazis are longtime donors to Indiana University, starting in 1970 when Sidney established a scholarship fund. They have also supported the arts and art students by giving to the Herron School of Art and Design on the Indiana University-Purdue University Indianapolis campus, where Eskenazi Hall bears their name.
In 2011, the Eskenazis contributed $40 million for a new hospital and medical campus in Indianapolis now known as the Sidney & Lois Eskenazi Hospital and Eskenazi Health, which at the time was one of the largest gifts to a public hospital in the United States.

Monday, July 25, 2016

Auction Houses 2016

1. LONDON - The folks at Paddle 8 and Auctionata are very excited to announce that the two platforms—one with strength in Europe and the other with a base in the UK and US—are merging. The announcement comes with a raft of slick publicity materials, including portraits of the founders and the management teams all sharing a satisfied moment. There’s also a video (click through the image above to view) extolling the merger with movie-trailer self-confidence.
ArtNews whose parent company (update: turns out the Paddle8 stake held by ArtNews’s parent company was not acquired with the site) owns shares in Paddle 8 puts the figures more precisely than the company press release:
The deal between the two online auctioneers creates a newly formed company that will lay claim to 793,000 registered users in 200 countries and more than $150 million in joint annual sales, making it, according to a news release announcing the deal, one of the top ten auction houses in the world outside of China.

2. NEW YORK - The BBC does a quick limning of the week’s big buyer, Yusaku Maezawa who took
two days to acquire seven works worth nearly $100m and, in the process, pretty much saved the Spring New York auction cycle.
It is no secret that the art market follows influential collectors in whatever category they are passionate about. It is rare, though, for a buyer to emerge in this way, making seemingly random purchases of what happens to be on offer. It remains to be seen whether a buyer like Maezawa can shore up confidence and provoke more buyers to follow him.
In the meantime, the BBC offers some background information on the man:
Yusaku Maezawa made his money setting up the Start Today company in 1998 and online fashion retailer Zozotown in 2004.
The companies made him a billionaire by his mid-30s, and at the age of 40, Forbes magazine listed him as the 17th richest man in Japan with a personal wealth of $2.7bn. […]
Mr Maezawa is also the founder of the Contemporary Art Foundation in Tokyo, which he says puts on public shows twice a year.
He said in a statement he also plans to open a private gallery in his hometown of Chiba.

3. NEW YORK Heritage Auctions - Art Market Monitor
Global Coverage ~ Unique Analysis
Artelligence Podcast: Heritage Auctions’s Leon Benrimon
April 27, 2016 by Marion Maneker
Leon Benrimon is spearheading Heritage Auction’s expansion into Modern and Contemporary art and sales in New York. He speaks here about his focus on the middle market of works ranging in value from $10,000 to $1m, why he thinks that market is going to expand dramatically and Heritage’s unique use of the web for bidding and selling.
Leon Benrimon to lead Modern and Contemporary Art in New York at Heritage Auctions
Heritage continues to expand Modern and Contemporary in New York
Leon Benrimon
NEW YORK — Leon Benrimon has joined Heritage Auctions as Director of Modern and Contemporary Art for its New York office, continuing the company's expansion into the market. This follows Heritage's April 2015 announcement that it is effectively doubling the size of its Park Avenue space.
"Leon is an incredibly bright talent with a great eye and the drive to grow the category," said Greg
Rohan, President of Heritage Auctions. "As a company we anticipate great things from him as we continue competing for and auctioning the best available material in New York."
Prior to joining Heritage, Benrimon owned Benrimon Contemporary in New York, where he sold blue chip artworks on the secondary market in association with historical exhibitions, while dedicating himself to representing and supporting emerging, established and mid-career Contemporary artists working in a variety of mediums.
Leon grew up immersed in the art world, with parents who both own art galleries, and three siblings, all of whom also currently work in the art world. He received his Master's Degree at Christie's Education in New York and worked at family owned galleries on Fifth and Madison Avenues at David Benrimon Fine Art.
"I look forward to getting to work with the Heritage team in New York curating auctions and corresponding exhibitions that present collectors with innovative ways to explain the continuum of Modern and Contemporary art," he said. "I want my work to foster growth for the collectors, for institutions, for Heritage and for its staff."
His specialty will be working with new collectors and post-war artists — such as Warhol, Lichtenstein, Prince, Basquiat, Longo, Kusama Haring, Murakami and Hirst, among others.

Art Economy Spring/Summer 2016

1. NEW YORK - Gigaweek Closes As Christie’s Imp-Mod Is Managed to a Soft Landing
May 13, 2016 by Marion Maneker
Rumbler in the Box
Even in its reduced state, the current week of auctions in New York has resulted in slightly more than $1bn in sales. This season’s gigaweek was accomplished not by the addition of special sale but by the combination of Impressionist, Modern and Contemporary markets into a single weeks of sales.
Will the outcome be sales line-ups that merge the categories and featured evening sales that set the tone across categories and day sales focused on specific sub-markets? Possibly. Or this week’s sales could be a reflection of a broader cautiousness in global markets for real estate, financial products and commodities.
“The volumes are down hugely,” said Philip Hoffman, chief executive officer of Fine Art Fund Group in London. “People were not prepared to consign major works after the January collapse of the stock market. Everyone was worried if they would be able to sell.”
Comparing art markets against equity markets is rarely productive. In this case, the January stock swoon might have affected consignments but the current market strength ought to have brought out the buyers. Kazakina also heard another variation on the idea that demand remains but supply has been truncated:
“There’s money and there’s willingness,” said Michaela de Pury, a private art dealer based in London, who bought a $15.4 million painting by Cy Twombly for a client at Sotheby’s on Wednesday. Auction houses “need to focus on getting in triple-A works at good prices. Then the market would do very well.”
Finally, Bloomberg’s reporter spoke to a dealer and former auction house employee who was just not impressed:
“There was not much to get excited about in this sale,” said Emmanuel Di Donna, whose New York gallery specializes in modern and postwar art. “They’ve covered their base and often sold on one bid. Feels selective.”
The natural question is whether this fresh face is bidding for the now sought-after Asian clientele. Here’s Duray on the matter:
Asian bidding seemed strong on the phones, especially for the Hepworth and another Monet. At the press conference after the sale Jussi Pylkkanen, Christie’s global president, put Asian buying at around “20% by lot”, the same as the auction house’s earlier sales in the week.
After a rough go at Sotheby’s on Monday evening, when four of the eight Pablo Picasso works failed to sell, the atmosphere changed for the better on Thursday, with all nine at Christie’s selling, including “Homme assis” from 1969, a late and richly colored Mousqetaire swordsman outfitted in a yellow doublet, which sold to international dealer David Nahmad for $8,005,000 (est. $8-12 million).
Christie’s Imp-Mod Auction Totals $141.5 M., Secures Record With $8 M. Frida Kahlo  (ARTnews)
In Gun-Shy Art Market, Bellwether Auctions Decline More Than 50%  (Bloomberg)
Impressionist and Modern Works at Christie’s Stir Little Excitement  (The New York Times)
Tepid Impressionist and Modern sale at Christie’s concludes New York auction week (The Art Newspaper)
Christie’s Mild-Mannered Imp/Mod Closer  (BLOUIN ARTINFO)

2. NEW YORK n all of the talk about the Spring Contemporary art sales where many commentators focused on the 90% drop in Christie’s curated evening sale or the weakness in the Impressionist and Modern art market, not much has been said about the drop in sales volume for the three major houses Contemporary art day sales.
These sales are the live blood of the art trade where dealers, advisors and collectors buy stock, spot trends and the auction houses make the majority of their profit because the works in these sales aren’t as competed for. So here’s where an auction house will fatten its margin or just make its operating costs.
The big news of the weeks was that Sotheby’s day sale was down substantially to $54m. The New York Contemporary art day sale at Sotheby’s hasn’t been at that level since 2010. With such a striking pullback, what does the sale mean? And where did Christie’s and Phillips come out?
Instead of looking at historical charts of the sales, we have some detailed analysis of each sale from Lisa Prosser who is the data guru at Athena Art Finance. Prosser’s infographics show some very interesting details about each of the sales.
Take Sotheby’s, which saw the bigger drop, where the hammer price on the sale came in below the low estimate by 5%. That tells us demand was weak and estimates were too high. Nonetheless, only
Sotheby’s day sale was never going to reach the levels of previous years. Whether that is because Sotheby’s made a strategic decision to focus on greater visibility for its Evening sale lots or the lack of manpower from recent staff loses made it harder to shepherd a substantial day sale, hitting the high end of the estimate range would still have given Sotheby’s a shortfall from the previous year.
Sotheby’s also guaranteed seven of the day sale lots, an unusual practice borne out by the fact that three of those guaranteed lots sold below the low estimates. There was some good news in the day sale when a Calder mobile made a strong price almost twice the high estimate at $2.17m.
16% of the works were sold below the low estimates and a healthy 77% of the works found buyers. That suggests consignors were more than willing to stand their ground and try to get their minimum price privately.

3. NEW YORK - Sotheby’s bounces back with steady contemporary art sale
Auction exceeded expectations after disappointing results for Impressionist and Modern art on Monday
by Dan Duray  |  12 May 2016
Sotheby’s bounces back with steady contemporary art sale
Last night, Sotheby’s made up for Monday’s dismal Impressionist and Modern evening sale (where 21 of the 62 lots went unsold) with a solid contemporary art sale that saw just two of the 44 lots fail to find buyers for a hammer total of $209.6m, squarely within the estimates of $201.4m and $257.5m.
The sale’s total with premiums, $242.2m, was a far cry from last May’s total of $379.6m but these are different times. The evening saw no new records for artists and was led by a blue Cy Twombly blackboard work from 1968 that hammered for $32.5m with just one bid. The work carried no guarantee but seven of the other top ten lots did.
"There's still plenty of money out there," said the dealer Emmanuel Di Donna, formerly worldwide vice-chairman of Impressionist and Modern art at Sotheby's. "It's just a matter of a readjustment." The top lots, he said, were not as strong, but the house had managed to smooth that out with guarantees, and put together a good sale with middle market lots.
Matthew Paris of White Cube gallery, said that he too was impressed with the sale that Sotheby's had managed to put together in this market. "Both them and Christie's last night," he said, "really went to war for these lots."
One bright spot in a series of auctions that showed much reduced market activity was a seemingly-new Japanese buyer on the international art scene. Yusaku Maezawa, the billionaire founder of the online fashion mall Zozotown, who last night bought Adrian Ghenie's Self Portrait as Vincent van Gogh (2012) for $2.6m and Christopher Wool's Untitled (1990) for $13.9m. Maezawa also revealed that he was the buyer of Jean-Michel Basquiat's 1982 canvas that sold for the top price at Christie's on Tuesday evening for $57.3m, as well as of Richard Prince's Runaway Nurse (2007) for $9.7m, both artists' records at auction. Maezawa runs the Contemporary Art Foundation in Tokyo.

4. NEW YORK Luxury Tower Inventory in Manhattan Grows, Cooling Once Red Hot Market
May 2, 2016 by Marion Maneker
The highest value end of the real estate market has been a good measure of health of the art market for some time. Does that mean recent reports of excess inventory among New York’s new developments is a sign of lowering demand?
The Real Deal has this observation about delayed sales for New York’s newest towers:
Despite off-the-charts construction activity in New York City’s residential sector, new development inventory plummeted a whopping 44 percent during the first quarter of 2016, according to a report from Douglas Elliman and appraisal firm Miller Samuel. According to the report, there were 753 new condos for sale at the start of 2016, compared with 1,345 units a year prior. By comparison, Manhattan’s overall inventory level inched 5 percent higher during the first quarter, with 5,506 properties for sale during that time. “Developers continued to either pull units from the market or were slow to replenish them in order to keep marketing [time frames] at lower levels,” wrote Miller Samuel President Jonathan Miller. “The pace of contract absorption remained well below years-ago levels, as the weak U.S. dollar and increasing competition reset demand to a lower level.”
Miller said new development inventory has dropped for three consecutive quarters. “That’s a tangible indication of when contract volume cooled off and when the market changed,” he said, adding that the cooldown coincided with a weakening U.S. dollar and more inventory in the high-end condo market (at least initially).

5. NEW YORK How Correlated Are Art Returns to Other Assets ?
April 28, 2016 by Marion Maneker
Deloitte SC 10 years
Buried in a US News story on art as an investment is some pretty astonishing stuff from Michael Moses of the Mei Moses Art Index which uses repeat sales to measure art asset values.
The assumption has always been that the the rise in art asset values during the overall economic slump of the global credit crisis was an anomaly. But Moses claims here that over the long term there is no correlation between art prices and financial asset prices:
The broad art market has provided compound annual returns of 5.7 percent in the last 30 years and 8.8 percent for the last 60 years, says Michael Moses, founder of consulting firm Beautiful Asset Advisors.
Better still, the index of broad art market prices is uncorrelated with those of other asset classes, such as stocks or bonds. “The stock markets went down in 2008 and our indexes were flat to a little up in 2008,” he says. The art indices “dropped substantially in 2009,” as the stock market rebounded. He pegs the long-term correlation at close to zero. That lack of correlation reduces overall volatility when art is part of a larger portfolio. The lower the volatility, the lower the risk. How much art should be in a portfolio? Moses says it depends on individual circumstances, but 10 to 20 percent is reasonable.

6. Scott Reyburn moved up his normal publication schedule to offer a summation of last week’s sales. But the responses he got from market participants seem hard to parse. Take this from one art advisor who tells us that uncertainty isn’t the barrier to selling, it’s the lack of guarantees.
“The market has definitely shrunk,” said Wendy Cromwell, an art adviser in New York. “But that isn’t a result of sellers not wanting to sell in an uncertain market, but of a lack of spectacular guarantees” that flush out the best works. “There’s a cause and effect,” she added, explaining the absence of big-ticket works in last week’s auctions.
But guarantees only exist to removed risk—another term for uncertainty—from the sales equation. Reyburn and Cromwell don’t tell us what the real impediment is, if not uncertainty. Could it be that those who own art don’t need to sell at all? In other words, without a guarantee locking in a price too attractive to pass up, the sellers just aren’t selling. If that’s the case, it only further confirms that guarantees don’t inflate the market, they subsidize it.
Another head-scratcher is this comment on the Impressionist and Modern market that suggests all of the great works in that category sold during the last decade and a half have been donated to museums and will never return to the market:
“There just isn’t the quality left out there any more. All the great pictures are in museums,” said the London dealer Alan Hobart, who was at Christie’s Impressionist and modern evening sale on May 12 to see a square 1919 Monet, once part of a rectangular waterlily canvas, sell for $27 million, the top Impressionist price of the week.
A more likely scenario is that demand has narrowed. In 2007, there was broad demand for a variety of Impressionist and Modern works that were snapped up by emerging market buyers. Many of those buyers have had reversals of fortune and many others have migrated in their tastes. The Old Master and Impressionist markets seem to struggle not with quality, as we saw last year with three Modern works setting nine-figure prices, but with volume. The market structure gets truncated which seems to squelch demand. That in turn makes it difficult to attract supply to the market.
Finally, there’s been great deal of chatter in the art market suggesting the May sales would have been a shock to the system without the $100m in purchased by Yusaku Maezawa. But others point out most of his purchases had underbidders, sometimes more than one. So the sales might have happened just at a slightly lower level.
“They were lucky to get that Japanese client; otherwise, it could have been a different story,” said Judith Selkowitz, another adviser in New York. “But the fact is there’s still a lot of money around. Buyers are just a lot more selective. It’s good to rebalance, and it’s healthy that everything isn’t running away.”
Josh Baer was also quick to point out in his newsletter this week that Maezawa bridles at the depiction of himself as a neophyte shopper.

7. NEW YORK Scott Reyburn has a spot on column about the New York marquee sales this coming week which are markedly down in estimates and likely to show a dramatic contraction in the very top of the art market. Art advisors Reyburn spoke to rightly point to the diminished sales subsidies offered by the auction houses in the form of guarantees, direct or third party:
“A sea change has occurred at auction,” said Wendy Cromwell, an art adviser in New York. “The night sales are smaller, the estimates more conservative, the guarantees less exuberant, the great works fewer and far between.”
At the moment, Ms. Cromwell added, discretionary sellers will not part with masterworks “unless they are offered ridiculous sums of money.”
But Todd Levin gets right to the heart of the matter by pointing to Christie’s as the primary driver of the guarantee engine:
“The guarantees aren’t there anymore at the highest level,” said Todd Levin, another art adviser in New York. “Christie’s has stepped back, and the market is no longer on steroids and is returning to its normal state.”
The chart above shows the last New York Contemporary evening sale where Christie’s and Sotheby’s were neck-and-neck in the fight for market share.
Starting in 2013, Christie’s hit the afterburners by opening the guarantee book and pulling away significantly. Since this chart, Sotheby’s has caught up but the November 2014 sales were the peak of the guarantee-supported market:
Reyburn also has some color on Sotheby’s where Amy Cappellazzo offers her trademark quote grafting financial terms uneasily onto the art market:
“Our position on guarantees is to do them when we have calculated that it is a good financial opportunity for Sotheby’s, more like private equity decision,” said Amy Cappellazzo, chairman of Sotheby’s Global Fine Arts Division. “We feel confident about the deals that have been done for May, and expect to be pleased with the results.”
It’s not clear what Cappellazzo means by a private equity decision. But since private equity deals are levered (meaning their financing is mostly in the forms of loans) and guarantees are not loans but full equity positions (to continue with the financial lexicon,) the metaphor seems to falter. What Cappellazzo seems to want to get across is the simpler idea that they won’t offer guarantees where they don’t see a way to profit, which is quite sensible.
Finally, Todd Levin reminds us that Sotheby’s sale results are likely to reflect the recent staffing changes more than its market share:
“The brains trust has been depleted and it’s really affected their competitiveness,” Mr. Levin said. “Sotheby’s evening auction is about 10 lots short of what it should be.”

Foreign Buying in US Real Estate Drops By $10 Billion, Significant for Art Market?
July 7, 2016 by Marion Maneker
The Wall Street Journal has a story based on a new report from the National Association of Realtors that might give us a few clues about foreign spending in the US art market.
There’s no direct correlation between art and real estate or art and luxury real estate. But the two markets have had a tendency to trade in similar patterns. Anecdotally we know that there is a slowdown in buying in Manhattan and Miami at the very upper end of the range. There’s also been a big pull back in the art market above $10m.
Here the Journal gives a few clues, including the insight that Chinese buyers are again the big payers in the US market. Chinese account for 1/4 of the dollar volume sold to foreign buyers which was $27bn last year:
Purchases of U.S. residential real estate by foreigners who aren’t residents of the United States fell by $10 billion in the year ending March to $44 billion, the lowest level since 2013, according to a survey by the National Association of Realtors released Wednesday.
A strong U.S. dollar and weakening economies in Europe, South America and China along with rising U.S. home prices have hurt the purchasing power of foreign buyers. Tighter restrictions by the Chinese government on moving money out of the country also have made it more difficult for people there to buy U.S. homes. […]
While foreigners make up a tiny share of the U.S. housing market, they are critical to small, lucrative segments of the industry. Miami and Manhattan developers are relying on foreign buyers to help fill a swell of high-priced condos coming to market in the next couple of years. The high-end housing market in San Francisco and southern California also gets a significant boost from foreign purchasers.