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Guest Post: The Bubble in Modern Art

Tyler Durden's picture





 

Submitted by Pater Tenebrarum of Acting Man blog,

Modern Art Goes Bananas As the Money Supply Inflates

We don't want to discuss the artistic merits of modern art, except to say that we are not averse to it at all. In other words, we personally like quite a bit of modern art, regardless of the field. Paintings, sculptures, literature, music, we find stuff that speaks to us everywhere. Of course we are not completely uncritical, we merely want to point out that art doesn't end sometime in the 19th century for us. We even like quite a bit of that modern 'classical' scratchy music that is on the receiving end of much contempt elsewhere. As it were, de gustibus non est disputandum.

 


 

$58.4million

Jeff Koons – 'Balloon Dog (Orange)'

 


 

However,  we differ with many supporters of such art insofar that we do not believe it should be in any way subsidized by the State. We also believe the habit of sometimes forcing concert goers to listen to, say, Helmut Lachenmann's works by sandwiching them between pieces by Mozart and Beethoven is a slightly questionable practice – even though we like it personally. We are well aware though that most Mozart fans are probably only clapping perfunctorily when confronted with something like this.

However, our focus here is actually on how the money supply inflation of recent years has been mirrored in the prices paid for modern art, which are becoming ever more absurd. A first wave of record prices was paid in the 2003-2008 bubble, but these records have been shattered over the past few years, especially in sculpture. A few examples are shown below.

 

 

The First Bubble Wave (2005-2008)

If you are a sculptor, you're a real winner if your name is Alberto Giacometti. Regardless of the phase of the giant bubble we are in, your works will fetch record prices.

 


 

grande femme debout 2

'Grande femme debout II', by Alberto Giacometti – sold for $27.4 million in 2008

 


 

Tete_de_femme_(Dora_Maar)

'Tête de femme (Dora Maar)' by Pablo Picasso, sold for $29.1 million in 2007

 


 

Prices for sculptures really only went 'off the charts' in the 2009-2013 phase of the great bubble. Paintings are generally fetching even higher prices, and in the early bubble phase they beat the prices for sculptures noticeably.

 


 

pollock

Jackson Pollock's 'Nr. 5, 1948' – sold for $140 million in 2006

 


 

 

de Kooning-Woman3

Willem de Kooning's 'Woman 3' – sold for $137 million in 2006

 


 

Dora_Maar_Au_Chat

Pablo Picasso's 'Dora Maar au chat', sold for $95 million in 2006. Several other works by Picasso also sold at very high prices in this stage of the bubble, the first one was 'Garçon à la pipe', which sold for $104 million in 2004.

 


 

720px-Suprematist_Composition_-_Kazimir_Malevich

Kazimir Malevich's 'Suprematist Composition',  sold for $60 million in 2008

 


 

Gustav_Klimt_046

Gustav Klimt's 'Portrait of Adele Bloch-Bauer I' sold for $135 million in 2006, making it the highest priced modern painting sold in this phase of the bubble ('Adele Bloch-Bauer II' incidentally sold for roughly $88 million the same year).

 


 

The Second Bubble Wave (2009-2013)

Things became even more interesting in the second wave of the bubble, especially in the field of modern sculpture, where an enormous jump in prices was recorded. Numerous paintings were also sold at jaw-dropping prices, but the differences to the first bubble phase were not that great (with one notable exception, see further below). This time, Giacometti really became the center of attention.

The most expensive sculpture ever sold was a version of his 'L'homme qui marche' (there exist several versions of most of his sculptures). Several other Giacometti sculptures also fetched record prices, including two versions of the same work ('Grande Tête Mince') selling in 2010 and 2013 at very similar prices.

 


 

$104 million

Alberto Giacometti's 'L'homme qui marche I', sold for $104 million in 2010

 


 

01-9035-Giacometti_ar

Giacometti's 'Grande Tête Mince' – sold in 2010 for $53 million, while  another version of the same work sold in 2013 for $50 million (it actually looks exactly the same, so there is no point in depicting both)

 


 

cropped_tete_modigliani.jpg

Amedeo Modigliani's  'Tête'  sold in 2010 for $52.6 million

 


 

$58.4million

'Balloon Dog (Orange)' by Jeff Koons, sold for $58.4 million in November 2013

 


 

With regards to Jeff Koons' 'Balloon Dog' selling for more than $58 million, we can only repeat, 'de gustibus non est disputandum'.

Next come a few paintings that were sold at very high prices fairly recently. We already mentioned the Lucian Freud triptych by Francis Bacon on another occasion. Edvard Munch's 'The Scream' is a well known painting – what is perhaps not so well known is that countless versions of it exist. One of the 'four most important versions' was auctioned for almost $120 million in 2012.

 


 

$142 million

Francis Bacon's 'Three Studies of Lucian Freud' – sold for $142 million in 2013

 


 

$119 million

The version of Edvard Munch's 'The Scream' that was sold for $119.9 million in 2012

 


 

Pablo Picasso also struck gold again in the current bubble phase, by setting a fresh record of his own earlier this year.

 


 

Picassos-The-Dream-Le-R+¬ve-Steven-Cohen-Steve-Wynn-155Million

Pablo Picasso's 'Le Rêve', which sold for the princely sum of $155 million in March of 2013.

 


 

And finally, Andy Warhol continues to attract big money as well. His painting 'Silver Car Crash' fetched $105 million this year.

 


 

Warhol, $105 million

Andy Warhol's 'Silver Car Crash (Double Disaster)' sold for $105 million in 2013.

 


 

Conclusion:

The effects of the massive monetary inflation of recent years are so far mainly reflected in asset prices. Modern art has become a major magnet for investors, whereby one gets the impression that this is truly a gargantuan bubble by now. Works of art are unique (well, modern works are only 'sort of' unique, since in many cases the works exist in more than one version as noted above), so there is really no yardstick by which one could make sensible comparisons regarding their valuations, except to note that prices today are at multiples of the prices paid in the not-too-distant past. When a Japanese insurance company bought van Gogh's 'Vase with Fifteen Sunflowers' for $39.7 million in 1987, the world was shocked that anyone would shell out so much money for a single painting. It was rightly seen as an outgrowth of Japan's bubble excesses of the 1980s at the time. Today it actually looks like they made a great investment. No-one bats an eyebrow anymore at anything that is not sold for more than $100 million.

 

So if you ever wonder whether there is really an inflationary bubble underway, the answer is clearly, yes, there is. As an aside, we have not mentioned Cezanne's 'Card Players' (it fell just outside our range of 'modern' art, as it was painted in the late 19th century and we only wanted to include 20th and 21st century art). The painting was sold for over $259 million in 2011, making it the most expensive painting ever – so far, that is.  It is undoubtedly a great painting, although we could think of a number of paintings we personally like better. But $259 million? Really? That does strike us as somewhat excessive.

 


 

Card_Players-Paul_Cezanne

Cezanne's 'Card Players' – sold for $259 million in 2011. Sure, it looks nice, but $259 million?

 


 

 

 

 


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Wed, 12/18/2013 - 19:14 | Link to Comment VD
VD's picture

Cezanne influenced both Cubism and Matisse's art...he is the grand daddy of modern art for many...he was also a trust fund kid and his art was ridiculed for most of his life... in case you were interested ....

Wed, 12/18/2013 - 19:24 | Link to Comment frankTHE COIN
frankTHE COIN's picture

Absinthe, I has it.

Van Gogh and George Thourogood both drank alone.

Wed, 12/18/2013 - 19:28 | Link to Comment NotApplicable
NotApplicable's picture

"Upper-crust" Beanie Babies!

Wed, 12/18/2013 - 19:52 | Link to Comment CH1
CH1's picture

It's UGLY, and always has been. 

Don't want it on my walls.

Wed, 12/18/2013 - 20:45 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

Bitcoin is down, so free payouts of bitcoins are up at http://freebitco.in/?r=25727

Wed, 12/18/2013 - 20:51 | Link to Comment Dr Benway
Dr Benway's picture

Garçon à la pipe de crack

Wed, 12/18/2013 - 19:29 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Boris is also frequent for drink alone. Maybe Boris is weld copper trimming in abstract shape and make children millionaire rich after fatal cirrhosis?

Wed, 12/18/2013 - 19:38 | Link to Comment Overfed
Overfed's picture

Well, you should do something with all of that copper you've been pulling from your subterranian urban mines. ;-)

Thu, 12/19/2013 - 18:29 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Copper is maybe no best material for creative expression. Boris is create artistic bubble in hot bath.

Wed, 12/18/2013 - 20:17 | Link to Comment max2205
max2205's picture

Tete....lol. Is that a bohnner in that chicks mouth...cool

Wed, 12/18/2013 - 19:16 | Link to Comment W74
W74's picture

George Zimmerman painting going for 96K now.

http://www.ebay.com/itm/111239922810?ssPageName=STRK:MEWAX:IT&_trksid=p3...

It was up over 101K last night with 109 bids.  I don't know why some have been retracted.  It would be a good way to donate to Z-man.  Poor guy got railroaded by society and the media.

Wed, 12/18/2013 - 20:13 | Link to Comment vortmax
vortmax's picture

That is freakin' awesome.

Thu, 12/19/2013 - 02:31 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Zimmerman is twice the artist than feckin' Koons.

Wed, 12/18/2013 - 19:15 | Link to Comment fonzannoon
fonzannoon's picture

I like Pable Picasso's "Penis Chin".  My kid has like 15 of those balloon dogs. I'm rich biatch!

Wed, 12/18/2013 - 19:16 | Link to Comment Mad Mohel
Mad Mohel's picture

Anyone willing to pay that kind of money for this art bullshit, needs their head examined and should not be allowed to roam freely in society.

Wed, 12/18/2013 - 19:30 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

People who are pay that money do not roam free in society, they are drive in back of limo and shop in expensive store, eat in exclusive restaurant. This people is beneficiary of shadow bank economy, children of children of bankster.

Wed, 12/18/2013 - 19:38 | Link to Comment logicalman
logicalman's picture

Your name is misleading - your observations are usually fairly lacking in crap.

Thu, 12/19/2013 - 17:34 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Never is fool self - always is plenty of crap, more than is enough for go round.

Wed, 12/18/2013 - 19:34 | Link to Comment logicalman
logicalman's picture

Anyone spending that kind of money on 'art' likely doesn't have to work for it.

The art establishment is a great example of human stupidity - and I say that as an artist.

 

Wed, 12/18/2013 - 21:11 | Link to Comment Fake_nation
Fake_nation's picture

There are no standards in art anymore other than those generated by a whim of the moment pump and dump scheme.

This leaves many people with a lot of worthless junk lying around...

rental opportunity!

http://www.fakenation.info/please/rentaculture

Thu, 12/19/2013 - 00:25 | Link to Comment StychoKiller
StychoKiller's picture

Some famous sculptor wanted to make a point about the idiocy of the art market(s) by canning some of his own execrement.  Of course, some idjuts bought these cans, but surprise, the price of these cans of poop actually increased in value when some of them exploded (due to fermentation within), and made the remaining cans more rare!  Make no mistake, most of these works of art, would be considered worthless if the Artist's signature were not present!

Wed, 12/18/2013 - 19:22 | Link to Comment Race Car Driver
Race Car Driver's picture

How come digital art isn't listed, only tangible stuff? It's gotta be just as valuable, even if it's virtual and easily replicated. Else, BTC?

Wed, 12/18/2013 - 19:26 | Link to Comment starman
starman's picture

haha check classic car prices! my client bought a Ferrari for 34Mill!

Wed, 12/18/2013 - 19:36 | Link to Comment Dr. Engali
Dr. Engali's picture

Classic cars huh? You remind me of somebody......,

Wed, 12/18/2013 - 19:39 | Link to Comment fonzannoon
fonzannoon's picture

That somebody is missed on here, at least for the alternative viewpoint.

Wed, 12/18/2013 - 19:50 | Link to Comment Dr. Engali
Dr. Engali's picture

Yep. I'm still trying to determine if he was kicked out and if he was why.

Wed, 12/18/2013 - 19:34 | Link to Comment czarangelus
czarangelus's picture

Modern art is a CIA psyop (no really - look it up) and as for the rest of it, I have no respect for rich people nowadays. Rich people used to be patrons of art - not blind idiot consumers. They actually paid attention to the current art scene and when they spent money on art, they did so to sponsor artists to make new masterpieces, not merely trade around the tired corpses of yesterday's movements at ever-inflated prices. No fucking class, rich people nowadays, which just goes to prove the adages about what money can and can't purchase.

Wed, 12/18/2013 - 19:27 | Link to Comment Tenshin Headache
Tenshin Headache's picture

There's a (wealthy) sucker born every minute.

Wed, 12/18/2013 - 19:39 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The biggest commentary on this sort of art was done by none other than an artist himself specifically Piero Manzoni and his piece called "Merda d'artista" translated Artist's Shit. It consisted of 90 tins cans filled with 30 grams of supposedly his own shit. And speaking of the balloon dog he also pioneered the idea of balloons with a piece called "Fiato d'artista" translated Artist's Breath which supposedly consisted of balloons filled with his breath. The relationship between the word fiato and fiat in relationship to hot air and bubble/balloon blowing is some avant garde shit but not in the $(50 - 60)M range avant garde though.

Wed, 12/18/2013 - 19:39 | Link to Comment logicalman
logicalman's picture

Maybe we should all start shitting in cans - we'll all be rich!!!

At least it would be backed by something tangible!

Wed, 12/18/2013 - 19:44 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

You know what is funny about Piero and lends credence to his art was also commentary on money at the time he put the cans out in 1961 they were originally priced against their equivalent weight in gold which at the time was $37 back in 1961 and he wanted the price to fluctuate per can according to the gold market.

And best part was how the cans are labeled.

http://www.pinterest.com/pin/116812184057536930/

Wed, 12/18/2013 - 19:41 | Link to Comment cheetahbaby
cheetahbaby's picture

Multiple colors, but similar prices appear in FOFOA's latest....  

Wed, 12/18/2013 - 19:45 | Link to Comment reader2010
reader2010's picture

The adventure of modern art is over. Contemporary art is only contemporary of itself. It no longer transcends itself into the past or the future. Its only reality is its operation in real time and its confusion with this reality. Nothing differentiates it from technical, advertising, media and digital operations. There is no more transcendence, no more divergence, nothing from another scene: it is a reflective game with the contemporary world as it happens. This is why contemporary art is null and void: it and the world form a zero sum equation… [promoters of the art scene today are involved in] insider trading, the shameful and hidden complicity binding the artist who uses his or her aura of derision against the bewildered and doubtful masses.

-Jean Baudrillard on contemporary art

Thu, 12/19/2013 - 05:03 | Link to Comment Shylockracy
Shylockracy's picture

Modern art is made by the untalented, sold by the unscrupulous, and bought by the unknowing.

Wed, 12/18/2013 - 19:51 | Link to Comment explosivo
explosivo's picture

Go long physical soup cans and short paper soup cans. 

Wed, 12/18/2013 - 20:08 | Link to Comment Al Huxley
Al Huxley's picture

I don't know why the banks don't open a soup futures exchange, and then we could all bet on the price of soup, and eventually the volume of paper soup would be 100x the volume of real soup, and then the smartguys would be out explaining why that wasn't a problem because for every short there was an offsetting long, and blah blah blah, and then the price of soup would drop below the production cost of soup and physical soup would get hoarded by a few fringe nut cases, and Asian countries short on food, who couldn't believe they were able to buy soup for under production cost, and the smartguys would be explaining that soup manufacturers would just produce soup for less, and anyway the low price just reflected a lack of demand for soup, even though Asia was buying up all the soup available, and then suddenly there'd be a drought and the crops would fail, and everybody would take their paper soup coupons to the exchange to get their real soup and then they'd find out that there was no real soup but they were welcome to trade their paper soup coupons for paper money coupons and the papersoup coupon holders would say 'but I can't eat paper money coupons, I need some fucking SOUP'.

Wed, 12/18/2013 - 19:54 | Link to Comment Dr. Engali
Dr. Engali's picture

The average American would have to work 5,200 years to buy Playing Cards. There is something seriously out of balance in this country.

Wed, 12/18/2013 - 19:57 | Link to Comment mynameisnobody
mynameisnobody's picture

The duece I dropped this morning,should command hundreds of million, it looked a lot like mr bernanke, so I got out my hanky and pissed on it frankly, i'll sell it all on ebay, starting bid for all is 1 billion. 

 

Wed, 12/18/2013 - 20:25 | Link to Comment Al Huxley
Al Huxley's picture

You know, if people ever catch on and see this explosion in the price of collectibles and art as a sign that the wealthy are losing confidence in currency as a store of value, they'll have to open up an Art Futures Exchange - you know, so the masses can play along in the game, speculate on the price of art and whatnot.  Maybe a nice 'collectibles ETF' where if you bought into it you'd actually own a small piece of collectible artwork, but without the hassle of having to store it.  Just throwin' ideas out there Jamie, Lloyd, Ben, Janet, in case it ever becomes an issue for you.

Wed, 12/18/2013 - 20:30 | Link to Comment moneybots
moneybots's picture

" So if you ever wonder whether there is really an inflationary bubble underway, the answer is clearly, yes, there is."

 

Wait till it bursts and deflates.

Wed, 12/18/2013 - 20:33 | Link to Comment moneybots
moneybots's picture

 "The effects of the massive monetary inflation of recent years are so far mainly reflected in asset prices."

 

It is going to be interesting to see what the deflation looks like.

Wed, 12/18/2013 - 21:05 | Link to Comment John Law Lives
Wed, 12/18/2013 - 22:07 | Link to Comment Mugsie
Wed, 12/18/2013 - 22:21 | Link to Comment Manipuflation
Manipuflation's picture

THE ART CORNER with Manipuflation

I flew 7500 miles to St. Petersburg, Russia and ended up in front of Malevich's Black Square.  Combined with the jetlag and the fact that I had been hitting the Russian vodka all morning trying to wash the taste of that fishgut shit they call caviar out of my mouth, I may not have been in the mood to appreciate fine art.  Later at the Hermitage, we had to stand in line and I think even had to pay extra to see a Masterpiece.  An awkward moment for me to say the least.  Only Mrs. M knows exactly what I said out loud but it was something to the effect of "Some asshole painted a white canvas black and that is supposed to be art?."

I remember getting a lot of looks for that one.  Like I gave a fuck.  Let's get some more Ghzelka and go run across the Neva. 

I did enjoy the Picassos but I was really impressed by the Monet collection.(ha ha)  Could the guy have possibly used MOAR paint?    I would say that you need to see those in person.  There is so much paint that they become three dimensional and photos do not show it. 

Just remember, when it comes to art, flowers are vaginas.  The more flowers and soft curves there are, the more chicks dig it.  You only have to pretend you care.  It is an immutable law of the universe.

This conlcudes this session of The Art Corner.  Tune in next time when we explore the effeminate intracacies of Ambrose Bierce.

Wed, 12/18/2013 - 22:47 | Link to Comment williambanzai7
williambanzai7's picture

$259 million buys a trailer home in 2050

Wed, 12/18/2013 - 23:09 | Link to Comment Manipuflation
Manipuflation's picture

I will own that market lest you forget.:-)  250 mil and the dream is yours.

http://www.boatingaccidentnews.com/uncle-rico-just-called/

 

This gives me an idea for an article.  Shit that people think is still good yet when it is clearly not.  It happens everywhere in the world.  I was hoping you could get me an Olivia Newton John cassette from that Hong Kong flea market William.  I will train my eye.LOL 

Wed, 12/18/2013 - 23:19 | Link to Comment Crassus
Crassus's picture

The price of a fully equipped F-35A will drop to $85M by 2019, boasts Lockheed. Who can say it's not art?

Thu, 12/19/2013 - 00:42 | Link to Comment SweetDoug
SweetDoug's picture

'

'

'

'

I watched kids in architecture school, whipping up bogus Pollock's by dropping paint onto a canvas from the second floor of their frat, years ago.

 

I thought it was shit then, not knowing who Pollock was as an 'artist'.

 

 

Now that I do, it's even worse shit.

 

And that clown Giacometti? What a scammer.'

 

 

•J•
V-V

Thu, 12/19/2013 - 02:20 | Link to Comment jack stephan
jack stephan's picture

Michael dudikoff....

http://youtu.be/D40veCPDOxI

Thu, 12/19/2013 - 02:36 | Link to Comment Clowns on Acid
Clowns on Acid's picture

hey a feckin' centerfielder with a lifetime BA of .269 just signed for $155M for 7 years.  The horned Bernanke is impacting all of society. He'll pay for it eventually.

Thu, 12/19/2013 - 03:53 | Link to Comment dojufitz
dojufitz's picture

Most contemporary art is shit.....it isn't the artists themselves who scam...it is the dealers......

Mr Koon's ballon stuff is the only idea he ever had that smacked of some originality...

..is an amusing pun.....it is a $9000 piece of sculpture.....

Thu, 12/19/2013 - 06:15 | Link to Comment Manipuflation
Manipuflation's picture

Ok, I agree.  I thnk it is cool but it sure isn't worth millions.

Thu, 12/19/2013 - 08:15 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

how do you tell if it's a forgery? counterfit? oh the auction house stands behind it. rumors of fake paintings hanging in public art museums across the world are just that. if it's good enough to fool the experts it must be Art. wonder how aztec rock gods  and 14th century Japanese swords are doing..fake but real is the new black. nobody benefits from too much caution sellers and buyers don't want to know.

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