Interactive Electronic Group Research: Making Money Without

The real message from voters was "Fix this stinking economy." But Republicans have no intention of doing so.

With Republicans in control of the House, forget spending increases or tax cuts to stimulate the economy.

Republicans don't believe in stimulating economies. They think markets eventually clear -- once the pain is sufficient. Or in the immortal words of Herbert Hoover's treasury secretary, millionaire industrialist Andrew Mellon: "Liquidate labor, liquidate stocks, liquidate the farmer, liquidate real estate. It will purge the rottenness out of the system. People will work harder, lead a more moral life."

Of course, Mellon was dead wrong. Nothing was purged. Instead, the economy sunk into deeper and deeper depression.

So how do we get out of this bog?

By default, all the responsibility is on the Federal Reserve -- which announced this week it will pump $600 billion into the economy between now and June to reduce long-term interest rates ("quantitative easing" in Fed-speak).

The Fed thinks lower long-term rates will (1) push more businesses to expand capacity and hire workers; (2) push the dollar downward and make American exports more competitive and therefore generate more jobs; and (3) allow more Americans to refinance their homes at low rates, thereby giving them more cash to spend and thereby stimulate more jobs.

But without an expansionary fiscal policy, the Fed's goals are pipe dreams.

Lower rates won't spur businesses to expand capacity and jobs because there aren't enough consumers to buy additional goods and services.

Lower rates won't push down the dollar and spur more exports. They'll only spur more competitive devaluations by other nations determined not to lose export shares and jobs.

And lower rates won't allow middle-class and working-class Americans to refinance their homes because banks won't lend to families whose incomes have dropped, whose debts have risen, or who owe more on their homes than the homes are worth. That is, most of us.

Without an expansive fiscal policy that puts more money into the pockets of consumers and gets them out from under their huge debt load, the Fed's billions will just fuel another stock-market bubble.

It's already started. Stocks are up even though the rest of the economy is still down because money is already so cheap. Bondholders who can't get much of any return from their loans are shifting into stocks. Companies are buying back more shares of their own stock. And Wall Street is making more bets in the stock market with money it can borrow at almost zero percent interest.

In other words, with Republicans in charge of the House, the economy remains anemic. It may even succumb to another bubble that bursts.

Could it be that Republicans want to keep the economy this way through Election Day, 2012?

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

22 Responses to “What’s Driving the Art Market? Easy Money.”

Michael M Thomas Says:

November 12th, 2010 at 11:33 am

In the first big art boom, back in the late ’80s-90s, some one observed, “It isn’t that the art isn’t worth the m oney, it’s that the money isn’t worth the money.” – MM Thoomas

Friday screencast: artflation Abnormal Returns Says:

November 12th, 2010 at 1:36 pm

Easy money and the red hot art market. (Big Picture)

Mike in Nola Says:

November 12th, 2010 at 2:27 pm

When I saw the Lichtenstein story on the BBC yesterday, was going to send BR a note that he might use as the start of a blog post.

The point of my note was that such big prices tend to mark tops in stocks because it’s a sign of overconfidence combined with spending paper profits. The example that first came to mind yesterday was the Japanese investor who bought one of Van Gogh’s Sunflowers for $80M – in 1990 just after the Japanese market peak.

http://www.highbeam.com/doc/1P2-1126944.html

Of course there are other indicators. Remember reading about one of the well known players in the very early 1900′s who, when he saw $10k bet on the turn of a card, went out and correctly sold everything.

An illustration of what some art investments are worth in hard times is that some segments of the art market were down 75% during the depths of the crash. The only reason art is booming again is because Ben B has repumped the liquidity bubble, allowing the banksters to make plenty instead of having their sorry asses thrown out on the street as they deserved.

grlampton Says:

November 12th, 2010 at 2:37 pm

A lot of what this post says about the art market can also be said about the rare coin market. Granted, rare coins are not unique in the same way a single piece of artwork is (though some are close to unique).

Although I do not know what the long-term appreciation figures are for artwork, classic American rare coins have outperformed the S&P over the lon g haul, and, in my view, thwey are a lot more fun.

gms777 Says:

November 12th, 2010 at 3:39 pm

And for the 99.99 percent of us who don’t have millions to throw at art, when you buy art, buy it because you like it and think you will continue to enjoy looking at it in your house for years.

Something like 95+% of all art never appreciates in value or if it does, it does so below the rate of inflation.

obsvr-1 Says:

November 12th, 2010 at 4:30 pm

seems this is just the .1%-ers keeping up with the Rockerfellers

Perhaps the FED should be buying up rare art during distressed markets — then sell to the Fraudsters and elitist when they have nothing better to do with their money but buy high priced art; then recycle the profits back to the taxpayer (reduce nat debt) — or substitute SSA for the FED to bolster the Trust Fund for self sufficiency.

ToNYC Says:

November 12th, 2010 at 5:07 pm

If you’re very rich, you can ship your art to Switzerland, London or Singapore to be stored in a state-of-the-art facility and not have to worry about the Feds tracking it as funds.

Believe it or not, that’s where the majority of art ends up these days, sitting in storage waiting for the right time and place to be shown or sold.

great point you make:

rich or just smart…keeping all invested in Intellectual Property keeps you free. Hard assets are more like anchors and chains and locks and guns.

Long term Says:

November 12th, 2010 at 5:12 pm

The problem I see with art, as an investment or even as a store of value, is that BOTH the insurance AND storage costs of pieces in the $10M+ range are significant. And reoccuring. And a drag on ROI unless a large mark-up is achieved.

Mannwich Says:

November 12th, 2010 at 5:27 pm

Then there’s this. Sure doesn’t sound worth it to me.

http://www.nytimes.com/2010/11/14/realestate/14cov.html

philipat Says:

November 12th, 2010 at 6:44 pm

I’d also recommend fine wine for similar reasons. Also more liquid (Double entendre intended!)

pintelho Says:

November 12th, 2010 at 7:33 pm

Now this is an excellent educational piece…thank you Marion

Long term Says:

November 12th, 2010 at 9:06 pm

i consider this very interesting from the perspective of how chinese billionaires will benefit high-end american exports.

VennData Says:

November 12th, 2010 at 11:13 pm

What’s good for Damien Hirst is good for the global economy — Charles Wilson

YourPortlandFinancialAdvisor Says:

November 12th, 2010 at 11:30 pm

“Blue-chip art is no different from gold.”

It’s actually a lot different. People collect art to feel good about themselves, to feel intellectual, worldly, ect. Watch “Gone With the Wind”, Tara, the plantation is filled with paintings from Europe because that was the equivilant of the time. Plus anyone who fancies themselves a contemporary art collector must have and be judged by works of certain artists. Warhol would be one. No Warhol, no collection.

Julia Chestnut Says:

November 13th, 2010 at 5:52 am

The distinction here is between art as a store of value and art as an investment that is expected to create appreciation. The big jump in the value of a piece of art occurs when the artist dies, and thus the supply ends. People who build a fortune in art do so by having good taste and developing a relationship with the people who create (and/or sell) the kind of art that they love. It is about enjoyment and communication – about beauty and provocation. I have found in my limited experience that people who see art as an investment don’t pick the right artists: someone has to do their choosing for them.

But the pieces that we’re talking about in this article are investment grade – blue chips, as you said. Those are a store of value, alright. But as someone noted, the price of keeping something like that is extremely high. There are some pieces of such extreme value to certain unscrupulous people that you don’t insure them if you own them – because you are afraid that the appraiser or the insurance company might tip someone off about where the piece is. I wish I were being alarmist. Often these pieces are kept in professional storage in vaults because you don’t want to keep it where your family lives for these reasons. As old Priam found out long ago, possessing a thing of legendary beauty invites certain problems, especially if you are using it as a store of wealth.

contrabandista13 Says:

November 13th, 2010 at 8:25 am

And just to think, I bought a “Melvin Cruddy” last week for $2.77 at Resales for the Retarded.

It kinda looks like a Modigliani of Bugs Bunny and Daffy having breakfast at a Milwaukee coffee shop.

BuffaloBill Says:

November 13th, 2010 at 8:35 am

A.) If bought at auction, there are also buyer’s and seller’s commissions. You’ll need to add these into your investment computations. These commissions are not insignificant.

B.) If bought at auction, the hammer price (plus commission) is the single highest worldwide valuation for that piece.

C.) To quote the late Lawrence Fleischman who headed Kennedy Galleries in NYC for many years. “Art makes a lousy investment for almost all buyers except for dealers as we work hard to maintain a rolodex of likely customers. ”

D.) To quote the late Horace Solomon of Holly Solomon Galleries, “The painting hanging behind me is worth $125,000 – mostly because I say so.”

contrabandista13 Says:

November 13th, 2010 at 8:41 am

The BIG MONEY plays in the art market are all about vanity… Oh….! Such refined and subtle sophistication…

Having said that, It’s worth remembering that a trophy such as a Pollock or a real Modigliani, never grows old, never makes you carry it’s purse and will always comfort you in sickness and in heath….

Greg0658 Says:

November 13th, 2010 at 9:13 am

interesting thread .. I’ll add my pov (thats point of view) not (privately owned vehicle :-) … while waiting for the pumpkin pie to bake

I collect art – not blue chip art (I can’t) .. music 1st books 2nd clocks 3rd (why I started that with the dang time change twice a year) .. add general stuff to cover the walls, shelves and corners .. why I started that or continue that operation (as we slip back into a hunter gatherer society) (produced in mass production) I don’t know … I guess I’m a well trained consumerist .. worked all my life to turn green TP into stuff – because what good is scratchy green TP .. so coming up on the Thanksgiving season I’ll just ask for your thanks .. so thank you in advance … ie thanks for working to build stuff and then turn excess wages into stuff so people who can’t turn stuff into stuff can flip it for a living

ps – the other pov – wish I could earn enough to have one of those fancies I loved to take pictures of – but then again – I might hit a deer with it or get it k@/@d

ToNYC Says:

November 13th, 2010 at 9:30 am

Art as investment works for the smart players who realize that over time their judgment of the intellectual perspective which is IP, and what it is that the artist presents will be a Call on an increasing statement of value over time (and transferred stored savings). The ones that see the artist’s vision and help bring that awareness public do the very best and are the lifeblood of our culture as well.

Saturday links: cleaner coal Abnormal Returns Says:

November 13th, 2010 at 10:08 am

What is driving the art market? Easy money.* (Big Picture)

philipat Says:

November 13th, 2010 at 11:31 am

VennData Says:

“What’s good for Damien Hirst is good for the global economy — Charles Wilson”

IMHO, the new Warhol? And I mean that not kindly. Both take advantage of art as culture as fashion as Ladt Gaga to make money. No problem with that, and good luck to them. But is it art?

You must be logged in to post a comment.

eric seiger

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eric seiger

The real message from voters was "Fix this stinking economy." But Republicans have no intention of doing so.

With Republicans in control of the House, forget spending increases or tax cuts to stimulate the economy.

Of course, Mellon was dead wrong. Nothing was purged. Instead, the economy sunk into deeper and deeper depression.

So how do we get out of this bog?

But without an expansionary fiscal policy, the Fed's goals are pipe dreams.

Lower rates won't spur businesses to expand capacity and jobs because there aren't enough consumers to buy additional goods and services.

Lower rates won't push down the dollar and spur more exports. They'll only spur more competitive devaluations by other nations determined not to lose export shares and jobs.

Without an expansive fiscal policy that puts more money into the pockets of consumers and gets them out from under their huge debt load, the Fed's billions will just fuel another stock-market bubble.

In other words, with Republicans in charge of the House, the economy remains anemic. It may even succumb to another bubble that bursts.

Could it be that Republicans want to keep the economy this way through Election Day, 2012?

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

22 Responses to “What’s Driving the Art Market? Easy Money.”

Michael M Thomas Says:

November 12th, 2010 at 11:33 am

In the first big art boom, back in the late ’80s-90s, some one observed, “It isn’t that the art isn’t worth the m oney, it’s that the money isn’t worth the money.” – MM Thoomas

Friday screencast: artflation Abnormal Returns Says:

November 12th, 2010 at 1:36 pm

Easy money and the red hot art market. (Big Picture)

Mike in Nola Says:

November 12th, 2010 at 2:27 pm

When I saw the Lichtenstein story on the BBC yesterday, was going to send BR a note that he might use as the start of a blog post.

The point of my note was that such big prices tend to mark tops in stocks because it’s a sign of overconfidence combined with spending paper profits. The example that first came to mind yesterday was the Japanese investor who bought one of Van Gogh’s Sunflowers for $80M – in 1990 just after the Japanese market peak.

http://www.highbeam.com/doc/1P2-1126944.html

Of course there are other indicators. Remember reading about one of the well known players in the very early 1900′s who, when he saw $10k bet on the turn of a card, went out and correctly sold everything.

An illustration of what some art investments are worth in hard times is that some segments of the art market were down 75% during the depths of the crash. The only reason art is booming again is because Ben B has repumped the liquidity bubble, allowing the banksters to make plenty instead of having their sorry asses thrown out on the street as they deserved.

grlampton Says:

November 12th, 2010 at 2:37 pm

A lot of what this post says about the art market can also be said about the rare coin market. Granted, rare coins are not unique in the same way a single piece of artwork is (though some are close to unique).

Although I do not know what the long-term appreciation figures are for artwork, classic American rare coins have outperformed the S&P over the lon g haul, and, in my view, thwey are a lot more fun.

gms777 Says:

November 12th, 2010 at 3:39 pm

And for the 99.99 percent of us who don’t have millions to throw at art, when you buy art, buy it because you like it and think you will continue to enjoy looking at it in your house for years.

Something like 95+% of all art never appreciates in value or if it does, it does so below the rate of inflation.

obsvr-1 Says:

November 12th, 2010 at 4:30 pm

seems this is just the .1%-ers keeping up with the Rockerfellers

Perhaps the FED should be buying up rare art during distressed markets — then sell to the Fraudsters and elitist when they have nothing better to do with their money but buy high priced art; then recycle the profits back to the taxpayer (reduce nat debt) — or substitute SSA for the FED to bolster the Trust Fund for self sufficiency.

ToNYC Says:

November 12th, 2010 at 5:07 pm

If you’re very rich, you can ship your art to Switzerland, London or Singapore to be stored in a state-of-the-art facility and not have to worry about the Feds tracking it as funds.

Believe it or not, that’s where the majority of art ends up these days, sitting in storage waiting for the right time and place to be shown or sold.

great point you make:

rich or just smart…keeping all invested in Intellectual Property keeps you free. Hard assets are more like anchors and chains and locks and guns.

Long term Says:

November 12th, 2010 at 5:12 pm

The problem I see with art, as an investment or even as a store of value, is that BOTH the insurance AND storage costs of pieces in the $10M+ range are significant. And reoccuring. And a drag on ROI unless a large mark-up is achieved.

Mannwich Says:

November 12th, 2010 at 5:27 pm

Then there’s this. Sure doesn’t sound worth it to me.

http://www.nytimes.com/2010/11/14/realestate/14cov.html

philipat Says:

November 12th, 2010 at 6:44 pm

I’d also recommend fine wine for similar reasons. Also more liquid (Double entendre intended!)

pintelho Says:

November 12th, 2010 at 7:33 pm

Now this is an excellent educational piece…thank you Marion

Long term Says:

November 12th, 2010 at 9:06 pm

i consider this very interesting from the perspective of how chinese billionaires will benefit high-end american exports.

VennData Says:

November 12th, 2010 at 11:13 pm

What’s good for Damien Hirst is good for the global economy — Charles Wilson

YourPortlandFinancialAdvisor Says:

November 12th, 2010 at 11:30 pm

“Blue-chip art is no different from gold.”

It’s actually a lot different. People collect art to feel good about themselves, to feel intellectual, worldly, ect. Watch “Gone With the Wind”, Tara, the plantation is filled with paintings from Europe because that was the equivilant of the time. Plus anyone who fancies themselves a contemporary art collector must have and be judged by works of certain artists. Warhol would be one. No Warhol, no collection.

Julia Chestnut Says:

November 13th, 2010 at 5:52 am

The distinction here is between art as a store of value and art as an investment that is expected to create appreciation. The big jump in the value of a piece of art occurs when the artist dies, and thus the supply ends. People who build a fortune in art do so by having good taste and developing a relationship with the people who create (and/or sell) the kind of art that they love. It is about enjoyment and communication – about beauty and provocation. I have found in my limited experience that people who see art as an investment don’t pick the right artists: someone has to do their choosing for them.

But the pieces that we’re talking about in this article are investment grade – blue chips, as you said. Those are a store of value, alright. But as someone noted, the price of keeping something like that is extremely high. There are some pieces of such extreme value to certain unscrupulous people that you don’t insure them if you own them – because you are afraid that the appraiser or the insurance company might tip someone off about where the piece is. I wish I were being alarmist. Often these pieces are kept in professional storage in vaults because you don’t want to keep it where your family lives for these reasons. As old Priam found out long ago, possessing a thing of legendary beauty invites certain problems, especially if you are using it as a store of wealth.

contrabandista13 Says:

November 13th, 2010 at 8:25 am

And just to think, I bought a “Melvin Cruddy” last week for $2.77 at Resales for the Retarded.

It kinda looks like a Modigliani of Bugs Bunny and Daffy having breakfast at a Milwaukee coffee shop.

BuffaloBill Says:

November 13th, 2010 at 8:35 am

A.) If bought at auction, there are also buyer’s and seller’s commissions. You’ll need to add these into your investment computations. These commissions are not insignificant.

B.) If bought at auction, the hammer price (plus commission) is the single highest worldwide valuation for that piece.

C.) To quote the late Lawrence Fleischman who headed Kennedy Galleries in NYC for many years. “Art makes a lousy investment for almost all buyers except for dealers as we work hard to maintain a rolodex of likely customers. ”

D.) To quote the late Horace Solomon of Holly Solomon Galleries, “The painting hanging behind me is worth $125,000 – mostly because I say so.”

contrabandista13 Says:

November 13th, 2010 at 8:41 am

The BIG MONEY plays in the art market are all about vanity… Oh….! Such refined and subtle sophistication…

Having said that, It’s worth remembering that a trophy such as a Pollock or a real Modigliani, never grows old, never makes you carry it’s purse and will always comfort you in sickness and in heath….

Greg0658 Says:

November 13th, 2010 at 9:13 am

interesting thread .. I’ll add my pov (thats point of view) not (privately owned vehicle :-) … while waiting for the pumpkin pie to bake

I collect art – not blue chip art (I can’t) .. music 1st books 2nd clocks 3rd (why I started that with the dang time change twice a year) .. add general stuff to cover the walls, shelves and corners .. why I started that or continue that operation (as we slip back into a hunter gatherer society) (produced in mass production) I don’t know … I guess I’m a well trained consumerist .. worked all my life to turn green TP into stuff – because what good is scratchy green TP .. so coming up on the Thanksgiving season I’ll just ask for your thanks .. so thank you in advance … ie thanks for working to build stuff and then turn excess wages into stuff so people who can’t turn stuff into stuff can flip it for a living

ps – the other pov – wish I could earn enough to have one of those fancies I loved to take pictures of – but then again – I might hit a deer with it or get it k@/@d

ToNYC Says:

November 13th, 2010 at 9:30 am

Art as investment works for the smart players who realize that over time their judgment of the intellectual perspective which is IP, and what it is that the artist presents will be a Call on an increasing statement of value over time (and transferred stored savings). The ones that see the artist’s vision and help bring that awareness public do the very best and are the lifeblood of our culture as well.

Saturday links: cleaner coal Abnormal Returns Says:

November 13th, 2010 at 10:08 am

What is driving the art market? Easy money.* (Big Picture)

philipat Says:

November 13th, 2010 at 11:31 am

VennData Says:

“What’s good for Damien Hirst is good for the global economy — Charles Wilson”

IMHO, the new Warhol? And I mean that not kindly. Both take advantage of art as culture as fashion as Ladt Gaga to make money. No problem with that, and good luck to them. But is it art?

You must be logged in to post a comment.

eric seiger

Domain Name Wire » News » Confirmed: Facebook Acquires FB.com ...

A bad news week for AGW proponents | Watts Up With That?

Peggle bounces onto PSP next week PSP News - Page 1 | Eurogamer.net

Read our PSP news of Peggle bounces onto PSP next week.

eric seiger

eric seiger

eric seiger

Domain Name Wire » News » Confirmed: Facebook Acquires FB.com ...

A bad news week for AGW proponents | Watts Up With That?

Peggle bounces onto PSP next week PSP News - Page 1 | Eurogamer.net

Read our PSP news of Peggle bounces onto PSP next week.

eric seiger

The real message from voters was "Fix this stinking economy." But Republicans have no intention of doing so.

With Republicans in control of the House, forget spending increases or tax cuts to stimulate the economy.

Of course, Mellon was dead wrong. Nothing was purged. Instead, the economy sunk into deeper and deeper depression.

So how do we get out of this bog?

But without an expansionary fiscal policy, the Fed's goals are pipe dreams.

Lower rates won't spur businesses to expand capacity and jobs because there aren't enough consumers to buy additional goods and services.

Lower rates won't push down the dollar and spur more exports. They'll only spur more competitive devaluations by other nations determined not to lose export shares and jobs.

Without an expansive fiscal policy that puts more money into the pockets of consumers and gets them out from under their huge debt load, the Fed's billions will just fuel another stock-market bubble.

In other words, with Republicans in charge of the House, the economy remains anemic. It may even succumb to another bubble that bursts.

Could it be that Republicans want to keep the economy this way through Election Day, 2012?

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

22 Responses to “What’s Driving the Art Market? Easy Money.”

Michael M Thomas Says:

November 12th, 2010 at 11:33 am

In the first big art boom, back in the late ’80s-90s, some one observed, “It isn’t that the art isn’t worth the m oney, it’s that the money isn’t worth the money.” – MM Thoomas

Friday screencast: artflation Abnormal Returns Says:

November 12th, 2010 at 1:36 pm

Easy money and the red hot art market. (Big Picture)

Mike in Nola Says:

November 12th, 2010 at 2:27 pm

When I saw the Lichtenstein story on the BBC yesterday, was going to send BR a note that he might use as the start of a blog post.

The point of my note was that such big prices tend to mark tops in stocks because it’s a sign of overconfidence combined with spending paper profits. The example that first came to mind yesterday was the Japanese investor who bought one of Van Gogh’s Sunflowers for $80M – in 1990 just after the Japanese market peak.

http://www.highbeam.com/doc/1P2-1126944.html

Of course there are other indicators. Remember reading about one of the well known players in the very early 1900′s who, when he saw $10k bet on the turn of a card, went out and correctly sold everything.

An illustration of what some art investments are worth in hard times is that some segments of the art market were down 75% during the depths of the crash. The only reason art is booming again is because Ben B has repumped the liquidity bubble, allowing the banksters to make plenty instead of having their sorry asses thrown out on the street as they deserved.

grlampton Says:

November 12th, 2010 at 2:37 pm

A lot of what this post says about the art market can also be said about the rare coin market. Granted, rare coins are not unique in the same way a single piece of artwork is (though some are close to unique).

Although I do not know what the long-term appreciation figures are for artwork, classic American rare coins have outperformed the S&P over the lon g haul, and, in my view, thwey are a lot more fun.

gms777 Says:

November 12th, 2010 at 3:39 pm

And for the 99.99 percent of us who don’t have millions to throw at art, when you buy art, buy it because you like it and think you will continue to enjoy looking at it in your house for years.

Something like 95+% of all art never appreciates in value or if it does, it does so below the rate of inflation.

obsvr-1 Says:

November 12th, 2010 at 4:30 pm

seems this is just the .1%-ers keeping up with the Rockerfellers

Perhaps the FED should be buying up rare art during distressed markets — then sell to the Fraudsters and elitist when they have nothing better to do with their money but buy high priced art; then recycle the profits back to the taxpayer (reduce nat debt) — or substitute SSA for the FED to bolster the Trust Fund for self sufficiency.

ToNYC Says:

November 12th, 2010 at 5:07 pm

If you’re very rich, you can ship your art to Switzerland, London or Singapore to be stored in a state-of-the-art facility and not have to worry about the Feds tracking it as funds.

Believe it or not, that’s where the majority of art ends up these days, sitting in storage waiting for the right time and place to be shown or sold.

great point you make:

rich or just smart…keeping all invested in Intellectual Property keeps you free. Hard assets are more like anchors and chains and locks and guns.

Long term Says:

November 12th, 2010 at 5:12 pm

The problem I see with art, as an investment or even as a store of value, is that BOTH the insurance AND storage costs of pieces in the $10M+ range are significant. And reoccuring. And a drag on ROI unless a large mark-up is achieved.

Mannwich Says:

November 12th, 2010 at 5:27 pm

Then there’s this. Sure doesn’t sound worth it to me.

http://www.nytimes.com/2010/11/14/realestate/14cov.html

philipat Says:

November 12th, 2010 at 6:44 pm

I’d also recommend fine wine for similar reasons. Also more liquid (Double entendre intended!)

pintelho Says:

November 12th, 2010 at 7:33 pm

Now this is an excellent educational piece…thank you Marion

Long term Says:

November 12th, 2010 at 9:06 pm

i consider this very interesting from the perspective of how chinese billionaires will benefit high-end american exports.

VennData Says:

November 12th, 2010 at 11:13 pm

What’s good for Damien Hirst is good for the global economy — Charles Wilson

YourPortlandFinancialAdvisor Says:

November 12th, 2010 at 11:30 pm

“Blue-chip art is no different from gold.”

It’s actually a lot different. People collect art to feel good about themselves, to feel intellectual, worldly, ect. Watch “Gone With the Wind”, Tara, the plantation is filled with paintings from Europe because that was the equivilant of the time. Plus anyone who fancies themselves a contemporary art collector must have and be judged by works of certain artists. Warhol would be one. No Warhol, no collection.

Julia Chestnut Says:

November 13th, 2010 at 5:52 am

The distinction here is between art as a store of value and art as an investment that is expected to create appreciation. The big jump in the value of a piece of art occurs when the artist dies, and thus the supply ends. People who build a fortune in art do so by having good taste and developing a relationship with the people who create (and/or sell) the kind of art that they love. It is about enjoyment and communication – about beauty and provocation. I have found in my limited experience that people who see art as an investment don’t pick the right artists: someone has to do their choosing for them.

But the pieces that we’re talking about in this article are investment grade – blue chips, as you said. Those are a store of value, alright. But as someone noted, the price of keeping something like that is extremely high. There are some pieces of such extreme value to certain unscrupulous people that you don’t insure them if you own them – because you are afraid that the appraiser or the insurance company might tip someone off about where the piece is. I wish I were being alarmist. Often these pieces are kept in professional storage in vaults because you don’t want to keep it where your family lives for these reasons. As old Priam found out long ago, possessing a thing of legendary beauty invites certain problems, especially if you are using it as a store of wealth.

contrabandista13 Says:

November 13th, 2010 at 8:25 am

And just to think, I bought a “Melvin Cruddy” last week for $2.77 at Resales for the Retarded.

It kinda looks like a Modigliani of Bugs Bunny and Daffy having breakfast at a Milwaukee coffee shop.

BuffaloBill Says:

November 13th, 2010 at 8:35 am

A.) If bought at auction, there are also buyer’s and seller’s commissions. You’ll need to add these into your investment computations. These commissions are not insignificant.

B.) If bought at auction, the hammer price (plus commission) is the single highest worldwide valuation for that piece.

C.) To quote the late Lawrence Fleischman who headed Kennedy Galleries in NYC for many years. “Art makes a lousy investment for almost all buyers except for dealers as we work hard to maintain a rolodex of likely customers. ”

D.) To quote the late Horace Solomon of Holly Solomon Galleries, “The painting hanging behind me is worth $125,000 – mostly because I say so.”

contrabandista13 Says:

November 13th, 2010 at 8:41 am

The BIG MONEY plays in the art market are all about vanity… Oh….! Such refined and subtle sophistication…

Having said that, It’s worth remembering that a trophy such as a Pollock or a real Modigliani, never grows old, never makes you carry it’s purse and will always comfort you in sickness and in heath….

Greg0658 Says:

November 13th, 2010 at 9:13 am

interesting thread .. I’ll add my pov (thats point of view) not (privately owned vehicle :-) … while waiting for the pumpkin pie to bake

I collect art – not blue chip art (I can’t) .. music 1st books 2nd clocks 3rd (why I started that with the dang time change twice a year) .. add general stuff to cover the walls, shelves and corners .. why I started that or continue that operation (as we slip back into a hunter gatherer society) (produced in mass production) I don’t know … I guess I’m a well trained consumerist .. worked all my life to turn green TP into stuff – because what good is scratchy green TP .. so coming up on the Thanksgiving season I’ll just ask for your thanks .. so thank you in advance … ie thanks for working to build stuff and then turn excess wages into stuff so people who can’t turn stuff into stuff can flip it for a living

ps – the other pov – wish I could earn enough to have one of those fancies I loved to take pictures of – but then again – I might hit a deer with it or get it k@/@d

ToNYC Says:

November 13th, 2010 at 9:30 am

Art as investment works for the smart players who realize that over time their judgment of the intellectual perspective which is IP, and what it is that the artist presents will be a Call on an increasing statement of value over time (and transferred stored savings). The ones that see the artist’s vision and help bring that awareness public do the very best and are the lifeblood of our culture as well.

Saturday links: cleaner coal Abnormal Returns Says:

November 13th, 2010 at 10:08 am

What is driving the art market? Easy money.* (Big Picture)

philipat Says:

November 13th, 2010 at 11:31 am

VennData Says:

“What’s good for Damien Hirst is good for the global economy — Charles Wilson”

IMHO, the new Warhol? And I mean that not kindly. Both take advantage of art as culture as fashion as Ladt Gaga to make money. No problem with that, and good luck to them. But is it art?

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So many people have the dream of making money working from home. The reasons vary. For some it is more of a necessity while for others it's more of a want.

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Whatever you decide to go with, the truth is there is no secret to getting rich from home. There are two ways to really make an income from home. Good old fashioned hard work and effort or scamming people with a get rich quick scheme. So I am sorry to disappoint anyone who thought they could learn how to start making a thousand dollars a week instantly working only a few hours. But if you have a valid credit card, there are several guys willing to sell you ebooks promising some sort of secret to getting rich easily and quickly.

The moral of the story is, it takes time, effort and hard work to make a decent income from home. It's not easy and it doesn't happen overnight regardless of the hype that's out there. If you aren't willing to work hard at it, it probably won't happen. You need to have determination to make it work and you have to keep at it. You reap what you sow and if you put the time and work into it, you will be rewarded once it pays off.

eric seiger

Saturday, November 13, 2010

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