Guaranteeing Giacometti
January 27 2015

Picture: CNBC
In her valedictory piece on leaving the New York Times, the eminent Carol Vogel tells us that - amazingly - Sotheby's are believed to have lost 'several million dollars' when they sold Giacometti's Chariot, above, for $101 million last year. Apparently, they'd guaranteed the vendor more. Crazy. But their financial interest probably explains the hyperbolic catalogue entry.
Vogel also looks at that ever-present question, will the contemporary and modern bubble burst?
The auction houses are currently in a state of upheaval, having lost their chief executives. Faced with sagging profits and rising costs, both houses are struggling to figure out how to be competitive without giving away revenue streams like the fees they charge buyers. The big sales in London next month will signal whether buyers are feeling flush. Those sales precede May sales in New York, where experts are said to be scaling back on the amount of money each company will invest in guarantees — the undisclosed sums promised to sellers regardless of the outcome of a sale — without the safety net of an outside party putting up the cash and assuming the risk.
Guarantees have helped make the market what it is. I'm not sure it can survive without them.