Night at the Art Market Crash (BID)

SAI contributor ___ is a hedge-fund analyst.  We would tell you her name, but then she might get accused of “advertising” (only mutual fund managers are allowed to yammer on incessantly 24/7).  She was present when the red-hot art market–and New York powerhouse Sotheby’s (BID)–cratered:

It’s not just the stock market that’s crashing.  The art market is, too.  As a hedge-fund analyst bearish on Sotheby’s, I was there at the exact moment things went south…

Last Wednesday night I stood elbow to elbow with the world’s elite as they bid at Sotheby’s “Impressionist & Modern Evening.” Touted to be the whipped cream on the hot fudge sundae that has been the art market this past year (the Contemporary Sale on Nov. 14th being the cherry), it was a hard ticket to get.

I love art, but my reasons for being there were far from pure: I was betting the art market–or at the very least the perception of the art market–was about to change, taking the bids for BID down with it.  As the auction began, I stood next to a bullish colleague. The first lots sold swimmingly. My colleague looked at me with an impish grin: I was wrong; This was going to be spectacular!

Then one of the marquee pieces of the evening, Van Gogh’s “Wheat Fields,” went on the block. Auctioneer Tobias Meyer, whose satin voice had wooed buyers into paying up for Schieles and Pissaros, couldn’t muster a bid above a chicken-feed $25 million (the hammer range was $28-35 million). The piece went unsold and the crowd broke into a murmur.  Some of the air was sucked out of the room. The auction unravelled from there, leaving a startling number of items unsold or sold below the estimated value.

We won’t know for a while if this is the end of the bull run or merely a false step. The Contemporary Evening this week will be more telling.  But Wall Street has fled Sotheby’s stock. As an analyst, I suppose I should have been elated to have been right, and in a way I was.  But I also feel a strange emptiness, a lingering fear that things–the stock market, the art market and the world economic stability–are going to hell.

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