The Economist tries to explain the vogue for late Picasso:

Why, contrary to the general slide in art prices, is late Picasso enjoying a surge in demand? Helena Newman of Sotheby’s says, “Twenty years ago, works from the Blue, Rose, Cubist and Classical periods were considered the art historical pinnacle and the height of what collectors wanted. Now there is a broader focus on the full range of Picasso’s work: the portraits of Dora Maar and Marie Therese, the still lives of the 1940s, the late paintings.” She adds, “Picasso is unrivalled in having produced great works in every decade of his creative output.”

Olivier Camu, a Christie’s specialist, suggests that these works are a stylistic bridge between modern and contemporary art that attracts crossover buyers. “Whereas classic Picasso collectors tended to turn up their nose at the late works, collectors of Abstract Expressionists and even 1980s expressionists like Jean-Michel Basquiat are attracted to both the aesthetics and relatively reasonable prices of these big, bold, colourful pictures.” […]

The taste of a younger generation would seem to be integral to understanding the fashionability of late Picasso. “Younger collectors want paintings that are informal, splashy, less academic,” suggests Gabriel Safdie, a Geneva-based dealer. “They are not interested in sombre easel painting or dry Cubist exercises.”

The musketeer on the block at Sotheby’s was acquired by Samir Traboulsi, a Lebanese financier, while Christie’s swashbuckler was purchased by David Nahmad, a currency trader and powerful art dealer. With his family, Mr Nahmad owns several hundred Picassos, and has been buying late Picassos since the early 1970s when they sold for $40,000-50,000. “Blue period, Dora Maar, Marie Therese… it’s like Mayfair, Chelsea and Knightsbridge real estate,” says Mr Nahmad. “There are fashions but, overall, everything goes up.”

In the past, the Nahmads have been suspected of supporting the price of Picassos at auction in order to maintain the value of their inventory. “All manipulators lose money,” counters Mr Nahmad. “If I died tomorrow, the Picasso market would go on.” He is so passionate about the artist’s work that he loves buying Picassos that he has owned before. “The art market is something for beauty and intelligence,” he says. “It’s not supposed to be a casino.”

Hippie Picasso (Economist.com)