Il quadro “Ritratto di un artista” (Piscina con due figure) dell’artista David Hockney è recentemente stato venduto per 90,3 milioni di dollari ad un’asta di Christie’s. Analizzando la storia dei passaggi di proprietà del quadro, Fels sottolinea come il mercato dell’arte, specialmente nella sua fascia più alta, spesso funga da specchio dello scenario economico, finanziario e sociale in generale.
L’esperto di PIMCO evidenzia quindi quattro esempi:
· I picchi in positivo e in negativo del mercato dell’arte spesso seguono quelli del ciclo economico e del mercato finanziario. Esattamene come per l’economia infatti, il mercato dell’arte, dopo un picco positivo nel 2007, ha vissuto un collasso nel 2008 e nel 2009, con una ripresa nel 2011
· L’aumento della disparità di reddito e di ricchezza tra i ricchi e gli “ultraricchi”, nonché l’aumento della concentrazione del settore, si riflettono anche nel mercato dell’arte. Le vendite nel mid-level hanno infatti subito un rallentamento mentre la fascia alta del mercato ha mostrato ottimi risultati, grazie ai miliardari collezionisti presenti su scala globale
· L’ascesa economica dell’Asia e in particolare della Cina e l’importanza crescente di questi paesi per l’economia mondiale hanno il loro parallelo nel mercato dell’arte. I compratori d’arte asiatici infatti stanno diventando una forza sempre più importante su scala globale.
· Un’altra tendenza nel settore artistico che rispecchia gli sviluppi dell’economia in generale è la finanziarizzazione: i prestiti garantiti da opere d’arte e gli investimenti nell’arte sono decollati. Gran parte delle opere che vengono acquistate come investimento servono spesso come garanzia per i prestiti.
A $90.3 Million Swimming Pool
Joachim Fels, PIMCO Global Economic Advisor
Last year a dear friend took me to the David Hockney exhibition at the Tate Gallery in London, a major retrospective on the occasion of his 80th birthday. Hockney has long been one of my favorite Contemporary artists, but I had never seen so many of his best works in one place. It was an overwhelming experience. One of those that impressed me most was a brightly colored but somewhat mysterious painting depicting a young man with blond hair immaculately dressed in a red blazer watching another man swimming in a glistening blue pool against the backdrop of green hills in glaring sunlight.
The man in the blazer is a portrait of Hockney’s former student at UCLA and ex-partner Peter Schlesinger. Hockney painted it in 1972 following their breakup and later described that period as being “very traumatic for me. I’d never been through anything like that. I was miserable, very, very unhappy.” I will never be able to afford a Hockney painting, so I bought a postcard of the picture at the Museum shop. It has been standing on my bookshelf ever since and I admire it every day – I can actually see it from my desk as I write this note.
Why am I telling you all this? Well, Portrait of an Artist(Pool with Two Figure), as the painting is titled, just sold for US $90.3 million at Christie’s this past week, a new auction sale record for a living artist. Whether my taste is good or not is of course in the eye of the beholder, but I certainly have an expensive one! [Having said this, it continues to beat me why Jeff Koon’s steel sculpture Ballon Dog (Orange) held the previous auction record for a living artist at $58.3 million.]
The buyer of Hockney’s masterpiece is not known (yet) but the previous owner is: Joe Lewis, a British investor living in the Bahamas, who made a fortune by joining George Soros in betting against the Bank of England that the Pound would crash out of the European Exchange Rate Mechanism in 1992. Lewis not only collects art but also football clubs. He formerly owned stakes in Glasgow Rangers and Slavia Prague and is currently the owner of Tottenham Hotspurs. I wonder if some of the $80 million net of fees his Hockney fetched at Christie’s will end up in new football players for the Spurs. Alas, this kind of money doesn’t buy you much anymore in football these days. I would have rather kept the Hockney.
Lewis reportedly bought the painting in 1995 for several million dollars from another billionaire and art collector, David Geffen, the Hollywood producer and co-founder of DreamWorks. Geffen had bought it in 1983 for $800,000 and hung it in his Malibu beach house for many years. Asked later why he sold it, Geffen famously said: “I only have so much wall space.” I suppose this was also the reason why he recently sold two other iconic paintings, Jackson Pollock’s Number 17A and Willem de Kooning’s Interchange, for $200 million and $300 million, respectively, to hedge fund manager Ken Griffin.
Apart from the art itself, it is stories like these that I love about the art market. As an economist and interested by-stander I find that this market, especially the very high end of it, often serves as a mirror for the economy, finance, and society at large. Here are a few tidbits to substantiate my point.**
First, the ups and downs of the art market usually follow the economic and financial market cycle. As a case in point, sales volumes and prices went through the roof in the boom before the 2008 financial crisis and collapsed in 2008-09, with overall sales plunging some 40% by 2009 from the 2007 peak and Contemporary Art sales dropping almost 60%. Yet, just like the economy, art made a V-shaped recovery: By 2011, sales values were almost back to 2007 levels, followed by a broad sideways move in a range, just like the mediocre performance of the economy during much of the current expansion.
Note that the sharp recovery of art sales in 2010-11 had much to do with fears that zero interest rates and quantitative easing would lead to runaway inflation. Art, like gold, is seen by many as a store of value in inflationary times. Yet, when inflation failed to materialize, some of the initial excitement waned. Also, like gold, art doesn’t pay interest or dividends, so negative real interest rates helped to keep interest in the ‘asset class’ alive. More recently, with real interest rates rising, art auction results have become more choppy, notwithstanding results like the one for Hockney’s portrait.
Second, rising income and wealth inequality between the rich (say, the upper 10%) and the super-rich (say, the upper 1% or 0.1%), as well as rising industry concentration, is also reflected in the art market. Sales in the mid-level, defined as works selling for $50,000 to $1 million, have become more sluggish, which has contributed to a much-publicized crisis and many closures of smaller and medium-sized galleries. Meanwhile, the high end of the market has been booming, driven by billionaires around the globe. This has contributed to the rise of a few ‘Super-Galleries’, who cater to those hunting for iconic trophies to be exhibited in their homes or their own private art museums – yet another trend among ultra-rich collectors to overcome the David Geffen “I have only so much wall space” dilemma.
Third, Asia’s and particularly China’s economic ascent and rising importance for the world economy has its parallel in the art market as Asian buyers are becoming an ever more important force. According to Christie’s, Asian buying accounted for 30% of its sales last year, and has risen by 325% over the past decade. Sotheby’s, the other big auction house, reports similar numbers. And while Chinese buyers (there are almost 400 billionaires in China according to Forbes) initially focused on domestic pieces of art, they have long started to acquire the brand names among Modern and Contemporary artists. And so I wouldn’t be surprised if the proud new owner of Hockney’s work is from Asia. I guess we will know soon as part of the thrill for many ultra-rich in owning iconic works is to let the world and especially their peers know about it.
Fourth, another trend in the art industry that mirrors developments in the economy at large is financialization: Art-secured lending by specialized and investment in art has taken off. Much of the works that are bought as an investment now end up in free ports and art storage facilities and serve as collateral for loans. Increasingly, less wealthy individuals participate in the market through fractional ownership in a work, together with a sometimes large number of other owners, for investment and trading purposes. This is facilitated by online start-ups that bring together small investors, often using crypto-currencies. I know it is tempting to say this is like using one bubble (Bitcoin) to buy another (art), but I’m not enough on an expert on both to know whether these are bubbles or not.
So much for today and apologies for not commenting on other important events this past week such as the latest Brexit news or signs of a softening in Fed language — I’m sure you have plenty of reactions to those topics in your inbox already. Maybe, I’ve inspired you to go and check out an art exhibition in your vicinity. Who knows, you might even bump into a painting that will make a new auction record in the next few years!