Art Bubble Bursting: Gauguin Painting Collapses 74% To $22 Million

Tyler Durden's picture

By Mark O'Byrne of GoldCore

Art Market Bubble Bursting - Gauguin Collapses 74% To $22 Million


Te Fare by Paul Gauguin - Source: Christie’s

Russian billionaire Dmitry Rybolovlev paid €54 million or $85 million for a landscape by Paul Gauguin in a private transaction in June 2008. Yesterday, he incurred a whopping 74% loss on his store of value "investment" as reported by Bloomberg:

Gauguin’s 1892 landscape “Te Fare (La Maison)" fetched 20.3 million pounds ($25 million), including commission, at Tuesday evening’s sale of Impressionist and modern art at Christie’s in London. Rybolovlev will net about $22 million based on the hammer price. The auction house had estimated the value at $15 million to $22.4 million. The buyer was a client of Rebecca Wei, president of Christie’s Asia.

The Gauguin was one of four Rybolovlev pieces offered for sale on Tuesday. Another work, a Mark Rothko painting, will be auctioned March 7.

Rybolovlev -- with a fortune of about $9.8 billion according to the Bloomberg Billionaires Index -- invested about $2 billion in 38 works, from Leonardo da Vinci to Pablo Picasso. They were procured privately by Swiss art dealer Yves Bouvier, known for creating a network of tax-free art storage warehouses in Singapore and Luxembourg.

Two years ago, Rybolovlev sued Bouvier, alleging he was overcharged by as much as $1 billion, Bloomberg reported. Since then the Russian fertilizer magnate has been unloading works he acquired, some at record prices. He has already sold three for a loss totaling an estimated $100 million. The five works at Christie’s, all estimated below their purchase prices, were expected to deepen the loss.

The art industry is closely watching the London auctions running this week and next as the year’s first test of the global market following a significant contraction in 2016. Christie’s sales fell 17 percent to $4 billion pounds ($5.4 billion) last year, while Sotheby’s reported a 27 percent decline to $4.9 billion. Both houses saw steep declines in their two biggest categories: Impressionist and modern art, and postwar and contemporary art.

In May 2015, we warned about the bubble in the the fine art "investment market or indeed the Hyperinflation in Art Investment Market after a Picasso sold for $179 million.


William Banzai

At the time, we pointed out that ultra high net worth and family office buyers may be viewing the fine art market as a form of super safety deposit box and as a way to protect their wealth from market crashes, systemic risk and the risk of bail-ins and deposit confiscation today.

Since then global art sales plunged in 2016 as the number of high-value works of art sold dropped by half, while China regained its status as the world’s top market according to an annual report recently released by Artprice. Art auctions worldwide totalled $12.5 billion (11.8 billion euros) last year, down 22 percent from $16.1 billion in 2015, the report said.

The world’s biggest database for art prices and sales, working with Chinese partner Artron, attributed the drop to a plunge in the number of works worth more than $10 million each – from 160 in 2015 to just 80 last year. “On all continents, sellers are choosing a policy of ‘wait-and-see,'” Artprice CEO Thierry Ehrmann said.

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SilverRoofer's picture

That shit is only worth what someone is willing to pay

NoDecaf's picture

Only 22 mil? What a bargain!

NoDecaf's picture

Better yet , can go-jek get me one of these?

wee-weed up's picture

 

 

As long as Liberals were in power, reality was suspended...

Not so much anymore...

Nothing like a Lib getting slammed upside the head by the "2x4" known as reality.

Croesus's picture

I see buying opportunities galore in art & antiques now...and to the guy saying "it's only worth what someone will pay"...I'll say it like this:

Art/antiques have done better by me, than any of the stocks, PM's, or guns I've ever owned...a lot better.

The secret is knowledge. The more you know, the better your chances at finding real opportunities, especially in antiques. Just like the stock market, with its thousands of stocks, there are literally thousands of different things you could buy, and still be an "antique collector/dealer"; can't find a deal in one area...you find one somewhere else.

The big leg up,is that it's a cash business, so capital gains aren't reported by most.

Try telling your stock broker to skip on the 1099 form, and just send you the cash.

Mustafa Kemal's picture

Have a friend who dropped out of physics and now collects photos.  He is now rich. The popping bubble doesnt bother him either. As he sees it, it makes a difference if you know what you are doing.

PT's picture

How much of the art industry is simply old-fashioned money laundering?

Yes, it is true, I have no idea.  It just dawned on me one day it would be too simple for people to not do it.

prime american's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

junction's picture

The art rings who control auction sales will bid up a painting by, say, Renoir, to boost the other Renoirs they have in the pipeline soon to go on sale or to be gifted to museums.  The fix is in, everything about the art market today is crooked.  Counterfeit Impressionists ("Corot painted three thousand canvases, ten thousand of which have been sold in America"), wrong attributions and bogus art sales at auctions with the art gallery selling the painting financing the sale. 

Saucy-Jack's picture

Modern art is a money laundering scheme. Maybe fine art is now as well.

Time for gold...

lincolnsteffens's picture

All this while Sotheby's stock spikes up big today. What a world!!

Giant Meteor's picture

Well, its a small club, and we ain't in it folks ..

Meh, a little spin on one of Carlin's old but epic rants ..

NoDebt's picture

I have great sympathy for billionaires who speculate on art.  I mean, really, who among us hasn't lost a few million trading some crappy work by Monet or Matisse or Jackson Pollock?  And don't even get me started on Warhol.  How was I to know he painted like HUNDREDS of nearly identical paintings?  I thought I had his ONLY work with the stupid Campbell's Tomato Soup can on it.  Lost my fucking shirt on that one.  I don't even like tomato soup.

 

 

jmack's picture

My "dogs playing poker" is still worth the $39.99 i paid for it.  And my velvet elvis tapestry, is worth more than i paid for it on ebay.

ghengis86's picture

I do apreciate art, especially impressionist. But fuck all if I'll pay more than $50-100 for those canvas reproductions to throw on a wall. Can even swap out when I get tired of a piece. Since I'll never afford a $22 million original, what does it matter? Once when I was in Chicago over valentines, the art museum (or institute? I forget now) had a free day so me and the old lady killed a few hours there; impressive in person. For $22 million, I could live in a $500/night hotel across the street, go to the museum every day for 100 years...and still have ~4 million left to spend.

Megaton Jim's picture

Velvet Elvis will never go out of style, poker playing dogs, too!

Mustafa Kemal's picture

"My "dogs playing poker" is still worth the $39.99 "

Shit, mine must be a forgery!

Anne_of_Green_Gables's picture

You have impeccable taste, sir!

lincolnsteffens's picture

I saw a really good 18th Century American sideboard on an auctioneer's website today estimated at $2000-3000.  I sold one 15 years ago to another antiques dealer for $14,000. Damn shame as just the wood to build that hand made sideboard would cost about $1000 today then about $10,000 in labor. Even a hand made guitar of any basic quality costs at least a $1000.

How the mighty have fallen as have the little guys like me who never earned over $60,000 in any one year in the antiques trade. Meh! At least I earned a living for 35 out of the last 40 years at it. I've got no right to bitch.

NoDebt's picture

LS- You're probably not going to believe me, and this won't make for an avalanche of up-votes on ZH, but I actually know exactly what you're talking about.  I got a quick education in antiques by an estate auctioneer a few years back.  It's not that the stuff isn't well built with quality materials and a history, it's that so many old people are dying who owned that stuff that it's saturated the market.  

I have a 100 year old china closet in my house that I inherited a few years back.  It's absoluely beautiful and of quality construction with high end materials.  Market value: effectively zero.

 

 

nmewn's picture

I gotta say, the Gauguin looks like something I saw in the DR ;-)

booboo's picture

Beauty is in the eye of the beHoly fuck that looks like shit!!

nmewn's picture

Well, the Haitian & DR artists I've seen rank right up there with the Gauguin piece this idiot spent millions on...lol.  

I'm jus sayin ;-)

PT's picture

"You buy this painting and then after you kill the guy / deliver the drugs / any-other-nefarious-activity I'll buy it from you / direct someone else to buy it from you ..."

And that explains rich people's long pockets and poor taste in art.

I could be wrong.  I know nothing.  But it just seems a little too convenient to not be happening.
Kinda like, "Damn!  After that croupier "gave" me "his" house, I "lost" all that money at the casino."

Grandad Grumps's picture

How does it taste.

I get that art has value to the controllers. They cannot do it.

yogibear's picture

Money going into the stock indexes.

aloha_snakbar's picture

Dayum... maybe I can afford to buy Maw one of those Go-Agains now...

Jäger's picture

more money than brains

Pollygotacracker's picture

Art is another word for money laundering.

moorewasthebestbond's picture

The antiques and art markets are shitting themselves just like luxury real estate is?

 

Can I still expect $10,000 for my outstanding 1976 Delta 88 hardtop?

Mustafa Kemal's picture

"Can I still expect $10,000 for my outstanding 1976 Delta 88 hardtop?"

I certainly think so.

FlKeysFisherman's picture

I did a search on this Russian and there's some dubious looking blogs trying to link him to Trump.

whatamaroon's picture

If I got that kind of tax write off I would be rich.

wisehiney's picture

The only Gougin' that I like is when I am grudge fucking some snowflake.

Salzburg1756's picture

Gauguin's paintings of native peoples make them look worse than most criminals in mug shots. Just buy some mug shots, blow them up into picture size, put a frame around them, and stick them on your wall. There you go. You saved a lot of money.

rockstone's picture

$22MM? $18.5 and not a dime more.

83_vf_1100_c's picture

I have better art hanging on the walls in my humble home. Hundreds, not mils. Art racket for snobs.

Megaton Jim's picture

Useless, WAY overpriced art is where NYC kike art snobs launder thier money!

Estee Lauder's picture

I do blacklight on velvet knockoffs

of impressionist and Picasso.

Ok im lying, but i'll give it a try

if anyone is interested.

fjcruiserdxb's picture

It does not matter how much you pay for things using dirty money. He know has $22Mi of clean money. Therefore he actually made a $22Mil profit.

Blankenstein's picture

Wouldn't mind if some of these .01% ers lost their asses.

Steven Cohen (SAC) has around $500 million in fine art and

Ken Griffin from Citadel spent around $600 million and bought $500 million of that in 2015.

https://en.wikipedia.org/wiki/List_of_most_expensive_paintings

williambanzai7's picture

That sure is a fine Banzai7 pictured in the article.

danepol's picture

a fertiliser magnate, eh ... he would know the value of bullshit , then?

ft65's picture

Last scene of the film The Train explains all...

 

https://www.youtube.com/watch?v=OC_NauqyoSg