Moshi Moshi, Medici! Completely Biased Adventures in Contemporary Art Collecting…

I don’t think this really effects the die-hard collector: we are still dumb enough to spend whatever it takes to get the pieces that we want.

I definitely do think the current run in speculation of young artists will die down (a good thing) and artists who deserve the recognition will continue to thrive (another good thing) but at the cost of weaker artists and galleries closing shop. Pretty much the normal development at any economic slump. Maybe now I don’t have to reserve a year in advance to get a decent hotel room at Basel and Miami!

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Contemporary Art Market Confidence Slumps 40%, Survey Shows

By Scott Reyburn

Jan. 25 (Bloomberg)

Confidence in the contemporary art market has dropped 40 percent over the past six months, according to a survey by ArtTactic, a London-based research company.

The biannual survey, based on the responses of 155 buyers of contemporary art, mostly international private collectors, said the decline in confidence followed the credit crisis in the last quarter of 2007.

The full survey, published on Jan. 23, follows a snap poll in August that showed contemporary art buyers were increasingly worried about the prospects for the economy, said ArtTactic.

“It is clear that the respondents no longer think that the art market can be detached from economic realities,” ArtTactic said in the survey. “Confidence in the primary market is down only by 10 percent, and is holding up significantly better than the auction market.”

The ArtTactic Market Confidence Indicator was first published in November 2005. According to ArtTactic’s survey’s methodology statement, data is collected and made available every six months.

Respondents are asked six constant questions on their perceptions of present and future conditions in the general economy and the contemporary art market. Answers are in the form of the response options “positive,” “negative,” and “neutral.”

The overall November 2007 Art Market Confidence Indicator, computed from the totality of the received data, fell by 40 percent since the last reading in May 2007, said ArtTactic.

`Economic Realities’

The primary market refers to art offered for the first time in galleries and by artists in their studios. Prices are often lower than when the same works reach the secondary market of auctions and resales by dealers and collectors.

“There are so many collectors in the primary market now and they want to carry on buying,” especially works by younger artists that have relatively low prices, said the London-based contemporary art dealer Thomas Dane.

ArtTactic’s findings come less than two weeks before Christie’s International, Sotheby’s and Phillips de Pury hold Impressionist, modern and contemporary art sales in London that have a record overall low estimate of 429 million pounds ($838 million), according to figures released on Jan. 22 by the auction houses.

Auction Records

Last July, before the global credit crunch triggered by the U.S. subprime mortgage crisis, record prices for contemporary artists such as Damien Hirst, Piero Manzoni, Ilya Kabakov and Yue Minjun pushed the total for these auctions in London to an unprecedented 462.5 million pounds, including fees, compared with a low estimate of 322 million pounds.

Since then, Wall Street banks have declared more than $100 billion of writedowns. On Jan. 21, two days before ArtTactic’s survey was published, London’s FTSE 100 stocks index fell 5.5 percent, the biggest drop since Sept. 11, 2001.

Rising concern that a housing slump will damp consumer spending in the U.S., causing a recession, has dragged down stock markets around the world this year. London’s FTSE 100 index fell as much as 17 percent this year before recovering part of the decline.

“We’ll have to see how the stock-market volatility plays out before the sales,” said James Roundell, Impressionist and modern art specialist at London dealers Simon C. Dickinson Ltd. “If anything, it should have more effect on the contemporary auctions. The Impressionist and modern market is much more static.”

Roundell said Russian and Eastern European buyers are increasingly important at London’s Impressionist and modern sales. “They’ve been behind quite a few of the stand-out prices in recent years,” he said. Sotheby’s said clients from the former Soviet Union bought 9 percent of the lots at its evening sale of Impressionist and modern art in London a year ago.

Soaring Estimates

The 89 million pound and 82 million pound low estimates for Christie’s and Sotheby’s respective February evening Impressionist and modern art auctions are the highest ever seen in London.

In July, Christie’s and Sotheby’s evening contemporary auctions carried low estimates of 54.5 million pounds and 40.5 million pounds, respectively. Both houses’ February sales in London are expected to fetch at least 72 million pounds.

Christie’s Feb. 6 contemporary auction includes a Francis Bacon triptych with a low estimate of 25 million pounds, a record for a work of art offered at auction in London. Three weeks later, Sotheby’s will offer a single-panel painting by Bacon with a guarantee of around 18 million pounds, also a record for London. At the contemporary art auctions in July in London and in November in New York, more than 80 percent of lots typically found buyers.

“I’d expect the general mood of buying everything and anything to come to an end,” said art dealer Dane.

Mood Change

According to the ArtTactic November 2007 survey, there has been a negative mood change toward some of the less established artists that saw a rapid and significant increase in prices during 2006 and 2007. Marlene Dumas, Neo Rauch, Franz Ackerman, Cecily Brown and Peter Doig were among the artists that had seen a “significant decrease in confidence” from buyers.

ArtTactic said auction performance is a major influence on the market’s confidence in a particular artist.

“The auctions will be the test of what is happening,” said Thomas Dane. “People are definitely putting off certain decisions until after the sales.”