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collapses
This page considers the Japanese art bubble.
It covers -
introduction
A perspective on contemporary art investment is provided by
practice in Japan during the 1980s and by the impact of the
Japanese art bubble in other parts of the world.
a prototype art bubble?
Richard Feigen, in describing 1980s giddiness, commented in
June 2007 that
It
had become clear that, as the Japanese poured money into
the market and came to dominate it, the problem in the future
was to be supply, not demand; that money could be printed
but art could not, and that the supply could run out. Most
importantly, and largely at the time to service the Japanese
market, the auction houses spawned ravenous monsters - marble
palaces all over the world, huge staffs, sumptuous cataloguing
departments, catering staffs - which required massive feeding,
and the food was running out.
Then suddenly, in the mid 1990s, the Japanese vanished.
Despite the fact that Japanese buying had focused primarily
on the impressionists and the school of Paris, the whole
art market collapsed. The banks and auction houses pulled
in their horns, laying off staff, closing branches, withholding
guarantees. Weaker firms like Phillips were taken over.
Trendy contemporary artists were no longer trendy, aggressive
dealers who had pirated them from their old galleries now
hid under their desks when clients tried to unload the work.
The auction houses were losing money and Sotheby's shares
plunged. The bubble had burst ...
That we are in the midst of a bubble seems apparent. But
what kind of bubble, what will cause it to burst, and when
will it happen? The bubble certainly doesn't span the whole
art market because there are significant undervalued lacunae.
Now it seems that even if there is a geographical shift
in economic power, and even if there is a shift away from
the dollar, art - even western art - will survive as an
alternate repository of wealth. But trendiness must shift,
and what is now merely trendy will not remain trendy. There
will be much carnage. Speculators will be burned, and their
burning will trigger a selective flight from the market
and the bursting of one of the 'bubbles'. The auction houses
won't care because they have no ongoing responsibility to
their clients, and there will be an endless supply of contemporary
art, of the newly trendy, that they can help promote to
feed these insatiable monsters.
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