Thursday morning, 4:30, I’m walking back to my hotel from Le Baron, the transplanted French nightclub that sets up shop on Collins Avenue for the week of Art Basel Miami Beach, with Paul Sevigny, a D.J., and Patrick McMullan, a photographer. (Who's buying whom? Read "How Stars Are Born at Art Basel.") Patrick’s been hard at work shooting the parties that have become such a big part of the festival, and Paul’s come down from New York to spin for one of them—I forget which. Ralph Lauren, Pucci, Swarovski, Audi, and UBS, the banking giant that’s the main sponsor of the event, are among the corporate entities that have hosted events tonight, and those are just the ones I can remember. The festival officially opened 12 hours ago, but the serious collectors and V.I.P.’s swarmed the Miami Beach Convention Center starting at noon, and the serious party people had attended dozens of soirees the night before. Iggy Pop gave a concert on the beach tonight, and not long after that I found myself on the lower floor of the Delano at Lenny Kravitz’s nightclub, the Florida Room, chatting with transvestites and trying unsuccessfully to make conversation with Lance Armstrong. (View other art shows around the world.)

In front of the Shore Club, I run across an old friend, a gallery owner from London. We exchange greetings and compare notes on the parties. He’s attended several tonight that I hadn’t even heard about and is just returning from the very exclusive private room above the hotel restaurant Casa Tua. I ask him about his day, and he says he sold everything except his laptop.

“It’s a feeding frenzy,” he says.

He mentions some big sales. “Larry sold that Prince in like the first 10 minutes for one point seven,” he says, referring to Richard Prince’s new De Kooning homage/appropriation at dealer Larry Gagosian’s booth. He tells me the giant Andreas Gursky photograph of a Frankfurt nightclub went for $900,000—which seems particularly apposite at this exact post-nightclub, predawn, intoxicated moment at the start of the sixth annual installment of what has become the world’s most successful art fair, in South Beach, a.k.a. SoBe, a.k.a. Soho on the Beach.

All in all, it’s been a good day from the point of view of a fun-loving art merchant, and he’s trying to decide whether to call it a night or continue the celebration.

“Buddy of mine just called me. He wants to send over this sensational hooker,” he says. “I don’t know. I can’t make up my mind. She’s only $1,500, but I was out all night last night, and I’ve got a big day tomorrow.”

Wednesday, 2 p.m. I arrive at the convention center a good three hours before the general opening. The big fish have already been cruising for two hours. The aisles between booths are jammed with anxious, speed-walking collectors. The international bonhomie is interlaced with an air of competitive anxiety. Even as old friends from New York and Berlin are kissing each other’s cheeks, they are anxiously inquiring about purchases and sightings and trying to figure out how to get to dealer Gavin Brown’s booth before everyone else does. To a first-time visitor, the atmosphere seems like a high-end version of Filene’s Basement: a competition to find and claim the hot merchandise before your neighbor does. You get the feeling that any minute a fight may break out over who gets the big John Baldessari.

By 3 p.m., almost every booth seems to be speckled with the tiny red dots signifying sales, including Merlin Carpenter’s Christopher Wool-like black-and-white canvas emblazoned with the words "Die Collector Scum." Some pieces were bought even before they were hung. Mary Boone’s booth displays a gorgeous suite of five huge Eric Fischl canvases—his characteristic beach scenes—which, according to the Wall Street Journal, had been presold to a single collector for $10 million. The petite, brunette, eternally girlish New York dealer confirms the sale when I find her at her booth but admits that the actual price was $7 million. Within the first few hours of the festival, she says, she also sold her stock of prints by Barbara Kruger, each in an edition of 10, at $30,000 apiece.

You can feel the collective ripple in the body aesthetic when one of the big collectors swims past. Like sharks with their attendant pilot fish, they are often accompanied by consultants and advisers. I catch a glimpse of Blackstone Group C.E.O. Stephen Schwarzman cruising purposefully in the company of Kim Heirston, the superstar art adviser, just moments before spotting Janna Bullock, the mysterious Russian mogul who has made a big splash on the New York art scene in the past couple of years, accompanied by her dashing P.R. man, R. Couri Hay. The hot blast of big Russian bucks like Bullock’s has helped inflate the giant balloon of the contemporary-art market in recent years. Everyone’s buzzing about all the serious buyers in our midst, including megacollector Steve Cohen, head of SAC Capital Advisors, who has lately spent several hundred million dollars buying art from the likes of David Geffen. In 2005, Cohen bought Damien Hirst’s shark in formaldehyde—one of the great icons of our era and a too-perfect übercapitalist totem—for the then-spectacular sum of $8 million. (It now seems like a bargain.) Hirst himself isn’t present, as far as I know (last year Paul McCarthy famously remarked that attending the fair as an artist was like watching your parents fuck), though I suspect he would approve of the spectacle, with its monumental scale and exuberant commercialism. One booth features $1,500 silk-screen prints of Hirst’s diamond-studded platinum skull, which recently set a record price for a work sold by a living artist, going for a reported $100 million. Hirst himself was a member of the consortium that bought the piece.

For all the complaints about luxury retailers trying to cop the cred of the art world, I begin to suspect over the next few days that the shoe may be on the other foot. Hirst’s venture into high-end jewelry is cutting in on Cartier’s turf. But don’t feel bad for the jeweler—it’s here in Miami, protecting its franchise. Or projecting its franchise.

Last night, I attended a preopening dinner sponsored by an ostensibly odd couple, Cartier and Interview magazine, Andy Warhol’s still-funct tabloid. The art component of the evening was supplied by honoree Jorge Pardo, the Cuban-born multimedia sensation who is the subject of a massive show at Miami’s Museum of Contemporary Art, which I had managed to check out just an hour before the dinner. The show, called “Jorge Pardo: House,” is a sprawling re-creation of a house complete with Pardo sculptures and paintings as well as apparently functional objects such as chairs, tables, even a refrigerator and stove. The walls are papered partly with photomurals of Pardo’s actual home in Los Angeles. Pardo blurs the lines between art, architecture, sculpture, and design, and in that regard his show is representative of an inexorable border-jumping trend on display. The fine arts, the applied arts, and the art of the deal are all coalescing here in Miami.

How else to explain the theatrical, ­crimson-colored geodesic dome, which had been erected by Cartier for the occasion, lined with display cases exhibiting tens of millions of dollars worth of jewelry? Frédéric de Narp, the company’s president, gave a speech, the only part of which I was able to hear reminded us that art is the middle name of Cartier. (Now I get it.) Calvin Klein was sitting between Ingrid Sischy, former editor in chief of Interview, and his ethereal ex-wife, Kelly, and directly across from Lance Armstrong.

Samuel Keller, the longtime director of Art Basel and its Miami offshoot, was wafting around the room, looking hip and gnomic. Keller, who is stepping down after this fair ends, couldn’t possibly have imagined what kind of monster he was about to create back in 2001, when he was invited to launch a beachside version of the venerable Swiss art fair. The festival was almost stillborn, officially canceled in the wake of 9/11, and in the early years, some of the big galleries stayed away. Now it’s the single most important event on the American art-world calendar.

Sitting beside me was Joel Wachs, the urbane president of the Andy Warhol Foundation, who is here, in part, to monitor the fair’s Warhol offerings. Warhol’s influence, as well as his images, was everywhere in Miami. Certainly the conflation of old money, new money, Euro aristocracy, celebrity, and the art world here in South Beach was one that Andy practically hand-forged. “I like money on the wall,” he said. “Say you were going to buy a $200,000 painting. I think you should take that money, tie it up, and hang it on the wall. Then, when someone visited you, the first thing they would see is the money on the wall.” To update this quote, just add a couple of zeros.

The contemporary artists with the biggest buzz and the biggest prices—Hirst, Prince, Jeff Koons, and Takashi Murakami—are all sons of Warhol, chameleonic pop ironists who could have master’s degrees in marketing. It’s probably not a coincidence that this occurs to me as I stand in the middle of Larry Gagosian’s booth, the red-hot center of the contemporary-art marketplace. Gagosian, who reminds me of Richard Gere with classical features, represents all these artists and is probably more acutely attuned to the zeitgeist than any dealer on the planet. I am contemplating Prince’s already notorious painting, the one that takes off from De Kooning’s Woman series and shows three demonic De Kooning women, one with a penis. If you didn’t know who the artist was, you’d have to ask one of Gagosian’s assistants, since the gallery is far too hip to label anything. “Larry thinks labels are ugly,” one of the assistants tells me.

Just when I’m beginning to wonder what the hell it all means, after three hours of wandering among the brilliant cubicles, I run into Michael Lynne, the co-chairman of New Line Cinema and a longtime collector whose passion predates the current art boom.

When I ask him what he’s bought, Lynne shows me a cheap plastic bag labeled Shanghai Supermarket and extracts what looks like three packs of Chinese cigarettes. “This is the coolest installation here,” he says. “ShanghART, which is the top gallery in Shanghai, has reproduced an actual Chinese supermarket, right down to the cash register.” Lynne shows me his receipt, the authenticating document.

“Three bucks,” he says. “You’ve got to check it out.”

Needless to say, I rush right over to admire this gleaming faux mini-mart, with its orderly rows of empty noodle packets and empty soda cans. It’s a slick opportunity to bust my cherry at Miami Basel: buying a few empty cigarette packs along with an empty Durex condom box embroidered with Chinese characters, saving my receipt, and getting 50 cents change for my fiver. It costs half of what I paid for my mango smoothie at the Raleigh hotel this morning. The installation is self-destructing, since the gallery is selling off all the products—or rather all the packages, which have all been scrupulously emptied. The dimpled, presumably Chinese gallerina qua shopgirl smiles at me.

Curiously, or perhaps significantly, there doesn’t seem to be any great crush around the Shanghai Supermarket; in fact, the place is empty when I arrive. It’s peaceful, the only place in the entire convention center that seems remotely conducive to contemplation. The scene outside the shop window looks like some kind of pagan festival. And without the soundtrack, it all seems vaguely ridiculous. Here, among the rows of empty noodle boxes and milk cartons, simulacra of life’s necessities, I have found a moment’s refuge from the riot of consumption outside. It’s a fleeting moment.

Festival novice though I am, I feel pretty confident that if ShanghART raised its prices by a factor of $1,000, or even $10,000, it would be doing a brisk business here. Elsewhere in the convention center, Chinese artworks are selling for five and six figures, the rise of Chinese artists being one of the signal developments of the 21st-century market. In fact, the entire Pacific Rim is on the ascendant. On opening day, according to the Art Newspaper, the Blum & Poe gallery sold Murakami’s Daruma the Great, a monumental comic portrait of the Buddhist sage, for $1.5 million, along with works by Tatzu Nishi and Chiho Aoshima.

Meanwhile, veteran tastemaker Beth DeWoody, the daughter of real estate mogul Lewis Rudin, was reported to have bought a piece by Korean artist Lee Bul from Lehmann Maupin for $80,000. (More likely, she paid sixty-something, after the discount that dealers usually give longstanding clients.) Hardly a recordbreaking sale in this arena, but as a major collector, her purchases are followed with intense interest. Gallery owners get weak in the knees when she appears. A DeWoody purchase of a work by an emerging artist is an imprimatur that can almost make a career. “Where’s Beth?” is a constant refrain as I move among the booths.

After four hours at the fair, I feel I've barely scratched the surface, but my retinal cones are burned out. I’m exhausted and overstimulated at the same time, and like any self-respecting V.I.P. fairgoer, I have at least a half-dozen events to attend tonight. I went to at least that many parties last night. The Raleigh hotel, owned by the irredeemably debonair hotelier André Balazs, a longtime collector himself, is party central for the week, hosting two or three events a night, including one tonight for Deitch Projects that will feature the glam-punk band Voluptuous Horror of Karen Black, with some members performing topless. The big opening-night UBS reception, for a thousand or two V.I.P. guests, is held in a huge tent at the nearby Delano, which is where I start my night, grazing from the numerous buffet tables laden with stone crab and lobster claws, before moving back to the Raleigh in the company of Lady X and Lady Y, two fun-loving English aristocrats of my acquaintance, for a party featuring the work of physically and mentally handicapped artists, after which we jump into a cab to find the Pucci party, which is being held at a private estate a few miles from the Collins Avenue action.

The ballroom of the faux Mediterranean mansion is filled with little dresses hanging from big helium-filled balloons covered in candy-colored Pucci fabric. Although they weren’t actually invited to the dinner, Lady X and Lady Y find many of their friends in the courtyard. It’s a very Euro crowd. Everyone smokes. French and Italian are the predominant languages. The party is hosted by Pucci grandes dames Laudomia Pucci Castellano and Delphine Arnault-Gancia, the statuesque, eight-foot-tall daughter of LVMH honcho Bernard Arnault. Larry Gagosian is chatting with fellow dealer Arne Glimcher and Balazs. I hear my first art joke—a critic reporting the reaction of a rival when he heard about the death of the prolific artist Ed Kienholz: “I certainly hope this won’t slow down his production.” I greet new friends from last night’s Cartier dinner, Lacma director Michael Govan and his wife, Katherine Ross. Formerly with Dia Art Foundation and the Guggenheim, Govan is a genuine art historian, and Ross is a major figure in the LVMH global empire. The union of these particular incredibly good-looking people feels emblematic of the Miami Basel weltanschauung—the marriage of art and luxury-retail branding.

“Art Basel Miami has become the ultimate cross-marketing platform,” says publicist Nadine Johnson, one of the organizers of tonight’s event and an expert on the subject. The fair is devoted to conferring the prestige and historical legacy of the art world—its brand—onto brands of fashion, liquor, jewelry, automobiles. On the other hand, you wonder if the conferring doesn’t go both ways. Murakami, who has created handbags for Louis Vuitton, recently had a retrospective at the Museum of Contemporary Art in Los Angeles, which actually displayed and sold the handbags right there in the museum, alongside the artwork. When it comes to glitz and hustle, I’m not so sure that the Christie’s and Sotheby’s contemporary-art departments have anything on LVMH.

Although the Pucci invitation was for 9 p.m., we’re still standing around at 10:30. Some of us are grumbling about missing the Iggy Pop concert on the beach. When we finally sit down, a German count named Carl von Bismarck is furious to discover that his ex-wife is seated at a better table than he and his current wife. “She’s not even a countess,” sniffs one of the guests. Carl von Bismarck throws a tantrum, yells at ­Arnault-Gancia, storms off, comes back, yells again, and leaves again. Not quite Iggy Pop, but entertaining nonetheless.

The next morning, Mera and Don Rubell are hosting a breakfast at the Rubell Family Collection with their children, Jennifer and Jason. Mera was among the driving forces in bringing Art Basel to Miami, and her daughter, Jennifer, seems to have inherited her uncle Steve Rubell’s flair for entertaining. She has prepared a breakfast of 2,000 peeled eggs, 2,000 croissants, 2,000 strips of bacon—and no utensils. Guests are advised to don the surgical gloves laid out at the tables, and many do, digging into the trough of bacon. It has to count as one of the better moments of the week: hundreds of wealthy, cultured Babelites eating breakfast with their hands.

After brunch, I try to catch as many of the satellite fairs as I can squeeze into five hours. On the corner of Biscayne Boulevard, I see a sign over a storefront: Art by God: Rock and Fossil Gallery. At the Margulies Collection, a mind-boggling private trove of Modern and contemporary art housed in a humongous warehouse, I overhear this:

EUROPEAN ACCENT: That’s a portrait of Komar and Melamid.
TEXAS ACCENT: What’s Komar and Melamid?
EUROPEAN ACCENT: You just bought one of their paintings this morning.

The satellite fairs tend to be more offbeat and less expensive than the main show, and it has become fashionable to say that they’re more interesting. At Scope, I talk with artist Jason Hackenwerth, who is blowing up balloons while a man wearing what looks like a giant inflatable pool toy frolics nearby. “I like ephemeral art,” he says, when I ask him about the durability of his pieces. “We have a life span, and so do these pieces.”

At Pulse, yet another satellite fair nearby, I admire a video piece by Brody Condon created from pirated video­game software that looks vaguely like an animated Hieronymus Bosch. Video art is heavily represented at all the fairs, including the main one. And while there are three separate photo fairs, photography is ubiquitous. Almost everywhere I go, I see giant panoramic photographs of beaches—many, although by no means all of them, by Massimo Vitali. Don’t ask me what this means.

The next night, my wife and I briefly join the throngs at Janna Bullock’s Russian Party at the Raleigh pool, where the guests are shoveling osetra into their faces. Caviar is also the draw at the party down the street, hosted by Larry Gagosian and Webster, a luxury-goods store, where we catch a glimpse of Steve Cohen up close and hear Gagosian talk about how he’d like to kick the ass of collector Adam Lindemann, who recently flipped a Jeff Koons sculpture for $20-plus million soon after getting an insider’s price. Then back to the Raleigh for a dinner hosted by Tamara Mellon, the former British Vogue editor who launched the Jimmy Choo shoe company in 1996, and painter Richard Phillips, best known for his Pop portraits based on the fashion photography of the ’60s and ’70s. Bon vivant art critic Anthony Haden-Guest tells me an old joke about an oil trader who supposedly said, “I gave my wife an unlimited budget, and she exceeded it.”

After dinner, we walk next door to the Delano with Schwarzman and his wife, Christine, to try to get into the Florida Room. The doormen fail to recognize either the billionaire or the aging chronicler of New York nightlife among the surging aspirants at the velvet rope, and we are about to give up when publicist Susan Magrino spots us and hustles us inside, seating us in a booth that had formerly been held by a squadron of pretty young girls in red dresses. Later, for reasons not entirely clear, Alex Rodriguez is escorted over to the table to say hello to Schwarzman.

“The basic feeling is that it's gotten bloated," says Brian Antoni, the unofficial mayor of South Beach, author of South Beach: The Novel, and the brother of artist Janine Antoni. He has been watching Miami Basel since 2001, its undeclared first year. “It used to be more local. Now it’s cocktails for billionaires. There’s so much going on, everyone thinks that someone else is doing something better than they are. One crowd has people one-upping one another with what art they bought, and one crowd has people one-upping one another with what party they went to.” Despite his reservations, Antoni was happy to take care of part of his Christmas list during his visit to the Yohji Yamamoto-Adidas gift lounge at the Standard hotel. “It’s getting like the Oscars,” he says of the swag.

Saturday night, we attend the party given by the Accompanied Literary Society for The Worth of Art, a book by French critic Judith Benhamou-Huet. The party, held in the penthouse of the Raleigh, has a raucous closing-night feel. We somehow missed the seminar that preceded the bash.

“The feeling that you’re missing things,” Jennifer Rubell tells me, “has become the defining Art Basel Miami emotion.”

Fortunately, I found the book in my hotel room, and I’d been reading it. “For the market to maximize its media profile and glamour,” Benhamou-Huet writes, the following are required: “a disconnect between consumption and the intrinsic nature of the product being consumed … a desire for superficiality in the approach to a field considered in principle as expressive of a certain profundity … the application of social codes imported from the luxury sector.”

It’s a very glamorous, mostly well-­lubricated crowd out on the terrace of the penthouse, including literary femme fatale Brooke Geahan, the founder of the Accompanied Literary Society, and artists Will Cotton, Caio Fonseca, Dash Snow, and Ryan McGinley. Suddenly it starts to rain, and we all rush for the narrow door leading into the bar, the crowd creating a bottleneck that lasts some five minutes until many of us are thoroughly soaked, at which point the downpour stops as abruptly as it started, and we all file back out onto the terrace with fresh drinks. Then the rain starts again, at which point we all rush toward the single door, braying and howling like herd animals, pressing forward with our drinks held aloft, following the exuberant, intoxicated crowd.