The Bleak Christie's Sale

Christie's had a big impressionist-and-modern sale last night, and the results, in Carol Vogel's headline, were bleak. All the biggest-ticket pieces failed to sell, with a Rothko estimated at $20 million to $30 million being passed after not even getting a single bid at $10 million.

In Marion Maneker's round-up, the word "bargain" appears three times -- but I have to say I'm unclear on what exactly the word is supposed to mean, when it's applied to a $4.4 million Toulouse-Lautrec portrait or a $2.2 million Miró. I think it's a combination of two things: the price as compared to its low estimate, and the price as compared to the amount that the work would have fetched at the height of the market.

Those are interesting numbers, to be sure, but it's worth remembering that art is a negative-carry asset with purely aesthetic intrinsic value. Is it possible for someone to get $4.4 million of aesthetic value out of putting a Toulouse-Lautrec on his wall? I don't know how you could even begin to answer that question. But if a painting is to be a bargain in a financial sense, that can only mean that it's worth less than it will be able to fetch in the future -- not less than it was able to fetch in the past.

For me, the Christie's sale is an important turning point, because it has turned the conventional wisdom on its head. For years now -- and this meme went unchallenged even after it was clear that the art market was going south -- we've been told that the very best works, at the very top of the market, were the ones most likely to keep their value, while second-rate works would suffer the most.

And yet last night it was the second-tier works which sold: a Seurat drawing of a house, for instance, fetched $1.1 million, even as the more high-profile lots got no bidders at all.

As we enter a major recession, the era for trophy-hunting is surely coming to an end. Spending eight-figure sums on paintings is no longer somthing to brag about, and I doubt that the likes of Ken Griffin have nearly as much appetite for such purchases as they did a year or two ago. Maybe, then, it's the masterpiece premium which will erode most quickly, leaving the second-tier works to outperform for the first time in many years.