artsy

A Blacklist for Flippers?

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Thaddaeus Ropac has called for an industry-wide "blacklist" of speculative collectors. However, informal versions of such a list has been around for some time (including websites that identify the sellers of "flipped" works that come up at public auction). However, such informal sanctions are very difficult to maintain. There is still some smoldering debate about the impact of "flipping," although the propensity for destructive impact on young artists' careers has been clearly demonstrated over the last couple of seasons. There is ambiguity, however, over exactly what market behaviors qualify as "flipping." An essential component of the definition appears to be, "something that other people do."

Art Fund Liabilities

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Anny Shaw has an interesting examination of the current state of art funds. Although the article suggests that there has been a "proliferation" of art funds in recent years, the field has actually been shrinking. Whereas the "financialization" of art continues apace in other areas -- such as the growth of fine art collateral-based lending -- interest in art funds has largely evaporated. In truth, the concept has several significant drawbacks. Some have to do with the structural features of the market-- particularly the lack of liquidity. The model also overlooks the various ways that collectors derive value from their art. In addition to financial gains at re-sale, collectors enjoy the reputational and social benefits of having an impressive collection (and some even like to look at their artworks!). Art funds reduce the benefits of ownership (actually, fractional ownership) to only a monetary rate of return. For individuals who have the resources to purchase significant works of art and the financial savvy to consider art funds, it makes much more sense to actually collect -- even if prospective financial gain is a key motivation.

Thoughts on the Current Market for Emerging Art

Alexxa Gotthardt presents a balanced assessment of the current state of the market for emerging art. As untethered as prices for some emerging work became between 2013-2014, there has also been somewhat of an overcorrection. While interest in some of the high-fliers will certainly wane, prices are already starting to rebound for others who have weathered the storm.