By Ulrike Knöfel and Joachim Kronsbein
The party lasted many years, and many thought it could keep on going forever. The clientele of the galleries and auction-houses would accept any price -- $70 milion, $100 million, even $135 million. The only difficulty was in keeping a fresh supply of art. But if anyone could scare up a drip painting of Jackson Pollack, he could easily charge $140 million.
Over the last several years, auctioneers have regularly broken records and more and more galleries have opened worldwide -- in cities like Beijing, a new one almost every day. In the new millennium, art seemed to sell itself.
"This market has grown out of the economic reality of the last two years," says Iwan Wirth, 38, who ranks as Europe's most important gallerist and lives in London and Zürich. But now the art market will learn what financial power really means. "The market will be changed by the world economic crisis," predicts Wirth. The ecstasy is cooling off. The boom times are over.
High-flying hubris has marked the entire industry, and nowhere more than at "Art Basel Miami Beach," the world's most thrilling fair of contemporary art. It is, in every respect, the most extroverted event in the art world: here, greed is a virtue, not a sin.
Since its founding in 2002, collectors, including wealthy hedge fund managers, have come to this sunny off-shoot of the Swiss fair "Art Basel" to snatch away the most expensive trophies from one another. Many stalls were sold out after only an hour. This shopping-battle developed into the community's favorite game.
Still, from the beginning the fair has been far more than the sum of its paid out checks. It has been a meeting point for people who feel like they belong to a clique of a very specific jet-set. These are people who relax on their yachts during the summer on the Côte d'Azur and who, during the winter, open their private museums. They used to come to Miami to stock up on goods.
On the fourth of December, the fair will open for a seventh time, and, as always, several German galleries are represented among the 250 exhibiters. And yet, suddenly, everything is completely different. Perhaps now the buying show will become the embodiment of failure, of the kind of fall that follows hubris. A grand collapse seems imminent.
In no other industry do people expend so much energy just to spread optimism. So it comes as almost like a confession of desperation when the American Marc Spiegler, one of the two heads of "Art Basel", announces: "Most galleries will probably not break any records this year." He also lets comments slip out like "Prices have gotten more realistic again," or, "The time for speculators has passed."
The buyers from the so-called emerging markets -- from India, the Middle East, and China -- have now disappeared, says Wirth.
Now, in the era of the financial crisis, a reality check is setting in, and many are not prepared for the painful side effects. Already at the fall auctions in New York in the middle of November, the turbulence was palpable. And New York sets the tone for Miami. Star auctioneer Tobias Meyer, the most important man at Sothebys, ought to know: "the feverish pace of art-buying is done." The very top segment of the market doesn't exist anymore.
No auction-house or artist-idol has been spared: Pieces by Roy Lichtenstein (Soetheby's), Francis Bacon (Christie's), and Damien Hirst (Phillips) have all been left unauctioned, shunned by the public. Unsellable masterpieces. Even a short time ago, they were guarantees for top-prices; as recently as September, Hirst made out like a bandit at an auction in London initiated by him and exclusively featuring his art. The bids totalled almost $200 million. Nothing is certain: one picture from star German painter Gerhard Richter set a record while another fell flat (both were auctioned by Christie's).
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