CNBC’s grasp of the art market has never been very firm. This week the channel mocked the art and artists while patting itself on the back for its ignorance of simple German, French and even English pronunciation. One the marquee morning show guests trotted out a commonplace argument about art:
Michael Novogratz of Fortress Investment Group said the art market has all the signs of speculation and that he could see a correction similar to the recent drop in gold.
“Art is 100 percent a bubble—I mean it has all the markings for a bubble,” Novogratz said. “Prices have gone parabolic. You go to any of the art shows and you know even the cheap stuff that was $10,000 two years ago is now $80,000. The expense of art has gotten crazy.”
He said the correction, when it comes, will be dramatic. While Novogratz is not shortSotheby’s stock, he said the turn in prices could be more than 50 percent. “These $90 million paintings, you know, they might be worth eight one day. They won’t go from 90 to 70, it will go from 90 to eight.”
All of that may be true. It might also be a touch more complicated. But what is interesting to see is the way the money laundering meme has entered the finance world. Again, that may be true but but it might also be a touch more complicated:
“You also have the illegal money, the dirty money, the money laundering that is coming out of … vast parts of the world where people … want an easy an easy place to store their money,” he said. “That’s what’s really giving this its turbo-charge to the art market.”
