Boom (ctd.)
October 9 2015
Picture: via Art Market Monitor
Marion Maneker of the Art Market Monitor brings the arrival of another art financing vehicle to our attention, run by Olivier Sarkozy (above, half-brother of Nicolas). He's going to provide more loans for people to buy art:
“We will drive the institutionalisation of this huge market. By introducing more liquidity to the market, we think the cost of capital for these assets will go down and the value will go up [...] Leverage generally means asset prices inflate.”
Boosting art prices by introducing more debt into the market - what could possibly go wrong? Still, it means that one day we'll be able to call the over-inflated work of Koons et al 'sub-prime'.
For more on who's borrowing how much to buy what, read about Skate's new art loan database here.
Regular readers will know that I don't think the art market should be 'regulated' - at least, beyond the many regulations it already faces. But if the art (or that small niche of modern and contemporary art which attracts speculators) becomes just another tradeable commodity, it's going to be increasingly hard to resist calls for some sort of market oversight. You don't have to be a historian of either markets or politics to know that nothing will happen until there's a crash, however. So for now, it's fill yer boots time.
Update - a reader writes;
Next Sarkozy could package and syndicate the loans, taking a fee, and stick European pension funds with the risk. And there will be great business for auction houses selling the reclaimed collateral. It should stimulate employment in the art business for a while. And living artists can benefit by manufacturing more product with larger “workshops”.
