In ways that are not immediately obvious, today’s overheated art market can help us understand the recent collapse of the overleveraged global economy. Though few have made the connection, developments in the art market have been following the changing investment strategies in financial markets. The global growth in the art market parallels the worldwide spread of finance capitalism. In recent years, the value of art assets has often risen faster than the value of real estate or financial assets.
As the fine art market rebounds from a two-year slump, investors should consider what happened when two established appraisers were called upon to place a value on Hole and Vessel II, an abstract sculpture by Anish Kapoor .
A U.S. collector paid a record $2 million for a Edvard Munch print of a doomed femme fatale, and a Russian gave $65,000 for a crocodile handbag in auctions this month as top works attracted wealthy buyers.
Works by Pablo Picasso , Claude Monet and Henri Matisse will lead auctions that carry a record estimate of 350 million pounds ($518 million) as the top end of the art market recovers from the biggest slump since 1991.