David Norman, Sotheby's chairman of Impressionist and modern art, doesn't seem to think so. "I'm not ready to read this at all as a correction to the market, which I think, despite tonight, is strong," Norman told Reuters, " I know the sale was really difficult, but I see it more as a resistance to the aggressive estimates and not so much that the market has turned."

A single poor sale does not necessarily indicate a faltering market. One only has to look at previous auctions that suffered low sale rates when reserves were set too high to know that this is not entirely unusual. After an extraordinarily poor sale for the Kahn collection at Northeast in 2002, Art and Antiques noted, "perhaps it is universally true that reserves discourage bidding. Perhaps, in the current economy, buyers are bargain minded." No one outside the folk art world panicked over that sale--then again Northeast isn't publicly traded.

The alarmist speculation based on the Sotheby's sale that failures in the housing and credit markets are spreading into the art and luxury markets is not yet warranted. Contributing factors to the poor sale indicate that it was more likely an isolated incident, due to Sotheby's failure to make appropriate estimates on their lots, leading to over-priced reserves.

One such indication comes from Christie's Impressionist sale the day before that totaled $395 million. As Reuters reported, "The fall art auctions got off to a solid start on Tuesday as Christie's achieved the second largest result ever for Impressionist and modern art." The article goes on to point out that fears about the housing and credit markets didn't factor into the sale. If the art market was truly on the downturn, it seems unlikely that Christie's would have had such a solid sale the day before.

A report from Monday the 5th in the New York Sun explains some of the discrepancies in the focus and preparations of each auction house. "The new collectors are bidding very aggressively for Impressionist pictures, which I feel are undervalued. I made a conscious decision to put a strong Impressionist collection together because that's what our clients want," Guy Bennett explained to the paper. But as the Sun went on to note, "Sotheby's sees the market going in the other direction--which makes sense and gives new buyers a competing, but complementary, vision. 'We are much more focused on trying to win works by Feininger and Marc,' Sotheby's Mr. Norman said..." Additionally as the Reuter's article from Nov 6th revealed, "Christie's executives said they had calculated their estimates after the markets started rumbling over the summer figuring the jitters into their expectations." Had Sotheby's taken similar precautions, it might not be in such a fix.