I like to follow the art market because it tends to be a good indicator of economic trends. The art market has been doing very well, thanks to quantitative easing, as wealthy investors pour money into art. You can consider this to be a canary in the mine kind of indicator.
Bloomberg reported today that these investors are starting to feel uncomfortable about the market sell-off:
As the stock market gyrated sharply in recent weeks, New York art dealer Asher Edelman began receiving calls from clients asking to sell works they owned by major 20th-century artists, including Pablo Picasso, Roy Lichtenstein and Robert Rauschenberg.
And the sellers — collectors, investors and other dealers — were willing to take about 20 percent less than they would have only a couple of weeks earlier, Edelman said.
“I think there’s a big fear factor out there,” said Edelman, a former Wall Street investor and the founder of art- financing company Art Assure Ltd. “People are afraid of what’s going on in the world and they want to take some cash out of their art.” …
Art Finance Partners, a private New York firm that also lends money using art as collateral, saw a sharp rise in inquiries this month, according to partner Meghan Carleton.
“People need to figure out where their sources of capital may be coming from in the next 30 to 60 days,” she said. “It’s about short-term liquidity.”
I wonder if Ezra Merkin still has any Rothko’s for sale.