Once Blamed for Inflating the Market, Auction Guarantees Are Now ‘Ripoff Insurance’: Felix Salmon fancies himself an expert on markets and on art. But he seems to be impervious to figuring out the art market. And he’s determined to explain that all of us at length in his artnet news essay on auction guarantees that concludes with this:

• “In a sense, then, the real purpose of going to auction is increasingly just rip-off insurance. You could sell your Picasso directly to a dealer for $115 million, but how do you know the dealer isn’t lowballing you? Answer: by making that dealer buy it at auction, via a third-party guarantee. If the real value of the painting is much higher than $115 million, then someone is very likely to pop up in the auction and pay more. If it isn’t, then the dealer will go home with the work.”

Except that this requires ignoring who the buyers and the sellers are and when guarantees come into play. There is no hard and fast rule about which works get guaranteed and why just as there is no single reason that works of art are bought or sold. Some sellers are estates, other sellers are collectors, still other sellers are dealers or institutions and the composition of buyers and sellers changes with each season as the art market and the economic environment change. The use of guarantees also waxes and wanes with internal market dynamics and external economic forces.

Are there sellers who accept a third-party guarantee in an auction to be sure the seller is getting the best price? There must be one or two. The auction houses would certainly love Salmon to be telling consignors that. It’s straight out of their marketing pitch. …

Kenny’s Friend the Under-Bidder: Kenny Schachter’s story about his wingman bidding on a work with the sole purpose of adding to another bidder’s cost to acquire the work reminded us of another time Schachter flagged this kind of activity. Is this the same bidder?

• A friend, who is a veritable ballet dancer when it comes to finessing higher bids before dropping out time and again, was the underbidder. Though he regularly buys at auction, he knows how not to. …

‘Love’ Isn’t as Flat and One-Dimensional as ‘F…’ : Jori Finkel discovered an interesting story about the origins of Robert Indiana’s famous Love motif. The first iteration of the idea was a bit coarser. More intriguingly, the work of art may still exist among Indiana’s estate:

• For her 2000 book “Robert Indiana: Figures of Speech,” Susan Elizabeth Ryan, a Louisiana State University art history professor, spent considerable time interviewing the artist and digging into his process. She writes that “LOVE” began in late 1964 as a more explicit four-letter word — beginning with F, and with a second letter, a U, intriguingly tilted to the right. In the wake of a messy breakup with his on-again, off-again romantic partner and fellow artist Ellsworth Kelly, Mr. Indiana had been focusing on word paintings. The two men were in the habit of exchanging postcard-size sketches, with Mr. Kelly laying down fields of color and Mr. Indiana adding large words atop the abstractions. “For Ellsworth it was like a joke,” explained Ms. Ryan, one that Mr. Kelly took as a provocation. Moreover, as a devout abstractionist, she said, “Ellsworth was horrified by the idea of having words in a painting. And the more he got like that, the more Robert wanted to take it seriously. During the era of post-painterly abstraction, just the fact that it was a word — any word — was subversive.” …

The Berkshire Museum Falls Short of It’s Goal…but Not As Short: The Berkshire Museum released the statement below yesterday afternoon. Today, they announced that “The Pennsylvania Academy of the Fine Arts (PAFA) has acquired Frederic Edwin Church’s masterpiece, Valley of Santa Isabel New Granada, 1875, from the collection of the Berkshire Museum through a private sale arranged by Sotheby’s.” The work was bought in at Sotheby’s with a $5-7m estimate range. Even at a price underneath the low estimate, the sale would chip away at the $13m shortfall mentioned below:

• With the close of today’s auction, the Berkshire Museum will realize net proceeds of approximately $42 million, including the private sale of Shuffleton’s Barbershop. Considering the unpredictable nature of the art market, we are disappointed but not surprised to fall short of our expected goal by close to $13 million. The agreement with the Attorney General allowed for the sale of up to 40 works to reach $55 million. Only thirteen works were offered at auctions this month, with 26 held back. We will take time now to consider how we will proceed, through possible auction and private sale, to gain the additional resources needed.

William Poundstone Thinks George Lucas Got a Bargain on Shuffleton’s Barbershop: The Berkshire Museum’s statement (above) has led several to calculate that Norman Rockwell’s Shuffleton’s Barbershop which was sold to George Lucas privately made a price around $29m. William Poundstone points out in his blog that Lucas bought Saying Grace for $46m five years ago. To his thinking, “Rockwell’s children called Shuffleton’s their father’s best work. The nod to Mondrian might be expected to reassure big-money buyers of Rockwell’s status as a “real” artist. In contrast the earnestly pious theme of Saying Grace might have limited the pool of buyers.” …