[intro]And other tales of the art market.[/intro]
Godfrey Barker provides some colorful anecdotes on why the wealthy prefer art over cash in the Wall Street Journal:
“It is simple,” says David Nahmad, one of the world’s most famous art dealers. “A lot of investors are distrustful of equities. They are terrified of cash that pays 0% at the bank and is threatened by the ‘great inflation’ lying one to two years ahead.”
This preference among the wealthy for art over cash is attested to by a conversation Cheyenne Westphal, head of Contemporary Art at Sotheby’s, recently had with an art collector in Los Angeles to discuss the market: “I phoned him up and told him: ‘Do you realize that in the present market we can get you $50 million for your Rothko?’ There was a very long silence at the other end of the phone. Eventually he replied: ‘Well, Ms. Westphal, that sure is tremendous news. But what the hell would I do with $50 million in the bank?’”
Barker also explains how the rhythm of selling is reinforcing buying at the moment:
“Big prices and heavy bidding tempt a lot of owners to sell,” says Ivor Braka, a London-based dealer in Impressionist and modern art. “They refresh the appetite of the market.”
As for buyers, “there’s money dammed up out there looking for masterpieces to spend it on,” says Richard Nagy, a modern art dealer.
A Flight to Tangibles (Wall Street Journal)