Tuesday, May 29, 2007

. Buttonwood. "Painting by numbers", The Economist

A friend of mine, a keen art collector, reflects on the parallel course of Wall Street and the art market and informs me that Marc Rothko's White Center recently fetched $ 73 million, while Andy Warhol's Green Car Crash changed hands for a cool $72 million in November. On this very issue, The Economist quotes Jeremy Grantham of GMO, a fund-management group: "From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time". The newspaper's conclusion is not a reassuring one:

One way of looking at high art prices is as part of a global wave of liquidity that is pushing up asset prices everywhere ... A variant of the same argument is that high art prices reflect the increasing number of rich people from all parts of the world. Russian and Chinese millionaires, along with hedge-fund and private-equity managers, have run out of houses to buy and yachts to launch, and would like to display their wealth on their walls.

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