Remember the Bible story about Joseph? He’s the one who achieved fame by telling the Pharaoh that Egypt would have seven fat years, followed by seven lean years. Then he followed up the prediction with wisdom, advising the superpower of the day’s ruler to capitalize on the fat years to see him through the lean years. Not only will he survive when he does that, but he will prosper beyond measure because he’s the only one doing that.
Does that sound like good advice to you? Sure does to me. The story has been around for thousands of years, and everyone who hears it thinks that it’s great wisdom indeed.
But nobody does it. Isn’t that surprising? Nobody would dream of leaving home without firm plans for lunch: either plastic or money to eat out, or a packed lunch. And if you ask people, they’ll all nod sagely about how we go through good times, then bad times, then good times again. Just like thinking ahead a bit for lunch, you’d think people would utilize the good times to see them through the bad times.
You would be wrong.
In our day and age, we live through good times and bad times, same as always, and it’s no news that some people have more money than others. Don’t know if you remember the old musical Fiddler on the Roof, but in it, the main character says he wants to be rich so people will listen to him, because “…when you’re rich, people think you really know.” Isn’t that just how we all think? You would think that the people with the money are wise in how they spend it in the good times. You would be wrong again.
If history is any guide, we can expect the next recession in the next two or three years. That being the case, you’d think people with money would know that and squirrel away their money for the coming hard times. Wrong again.
One of the frivolous things rich people spend obscene amounts of money on is art. That has been true since the days of the Roman Caesars. Of course, back in those days you didn’t have Christie’s, Sotheby’s and Bonham’s art auctioneers. Back then you simply bought an artist or sculptor, and had him create your art for you. So rich people and their art have been with us for millennia.
The rich people of today of course have the same luxury as the old Caesars had. Nothing would be easier for them than hiring an artist, heck, even a whole company of artists, to paint and sculpt, write and perform for them. There’s only one problem with that: there’s no guarantee that your works of Hector Alvarez or Susan Thorpe will one day end up being million dollar (or hundred million dollar) items. Best way to ensure that is to buy ones that are already $100 million pieces. The fact that your envious neighbors in the Hamptons know you had the wherewithal to plonk down a hundred mill for just another wall decoration doesn’t hurt for those kinds of people.
And, thanks, to the internet, we don’t have to wait to get an invitation to visit the gated community mansions to see what these folks opened their wallets for.
Before the Great Recession
The price of art, it is well known, goes up and down, right along with the economy. So it’s not surprising that we’ve seen new art price records set in the past few years.
The previous round of record prices for art was set, as you would expect, right before the Great Recession, which bottomed in 2009. Some notable examples were:
Sold in 2006, for $135 million
A portrait of Adele Bloch-Bauer, by Gustav Klimt.
There’s a bit of a story behind this painting. It was part of the collection belonging to a Jewish family in Nazi-occupied Europe. The Hitler regime confiscated it and it ended up in an art museum in Austria. It took a protracted lawsuit to get them to release the collection to its rightful owners (or, as in this case, the family of the rightful owners).
The model of this portrait also featured in another mega-price art sale in 2006.
Sold in 2006, for $88 million
A second portrait of Adele Bloch-Bauer, by Gustav Klimt. The family (smart, in my opinion) capitalized on the high art prices in the bubble before the Great Recession and sold.
Selling things of value in the good times is always a great strategy. This painting is shown below along with another $100 million painting sold in the halcyon days before the Great Recession:
Sold in 2006, for $137.5 million
Woman III, by Willem de Kooning
Sold in 2006, for $140 million
No. 5, 1948, by Jackson Pollock.
Some people just want art that fills a wall, with gravitas or presence. Of course, you could simply hang a rug on the wall. But, if you have $140 million burning a hole in your recession-survived pocket, why settle? Apparently, this piece of art consists of numerous fine drippings of paint, and that’s it.
So, we had three paintings which sold for more than $100 million in 2006 and a few which came close.
Then came the Great Recession, which bottomed out in the summer of 2009. The lean years, to use the Joseph analogy. Not too many $100 million paintings sold in the lean years.
Fortunately, the lean years don’t last seven years anymore. I mean, why go through the agony of saving when the Federal Reserve can simply print more money and stuff it down the shirts of the credit card company banks so they can pass on that favor to the masses? So in the modern days of the money press, the lean years only last two years or so, even though it feels much longer.
So it’s no surprise that by 2010 a portion of the freshly printed money would show up in the art market.
After the Great Recession
As we saw in an earlier post, the Great Recession bottomed out in 2009, so it’s been a while. It didn’t take long for the wealthy to gain their confidence back, along with the need to decorate a few more walls. A recent study shows that the top 1% of income earners in America have garnered a full 95% of all the wealth this recovery has brought, and they wasted no time to make new homes for art with hefty price tags.
Sold in 2010, For $110 million
A flag. Okay, not a flag, a painting of a flag. For $110 million. Seriously. Put together by Jasper Johns (painting is not all it took).
It still is the highest amount paid for the work of a living artist. It was painted in 1954, a time when the flag was as much in the center of national attention as inequality of income is today. That’s the year Pres. Eisenhower added the words “under God” to the oath of allegiance.
Sold in 2011, For $259 million (or more)
Cezanne’s Card Players, sold to the ruling family of Qatar.
The actual price of the private sale was not disclosed, but the estimated range from $259 million to $300 million. If true, that’s the highest price paid for a piece of art to date.
Sold in 2012, for $120 million
The scream by Edvard Munch
This is arguably the only painting so far that would be recognizable outside of the rarefied atmosphere of the art cognoscenti.
Well, that was before 2013. That’s when the lid came off and $100 million painting became as commonplace as Subway sandwich shops. Here are just a few:
Sold in 2013, for $105 million
Anna’s Light, by Barnett Newman.
I’ll leave thoughts and judgments about covering a wall with a single color for over $100 million to you. Well, there are a few lines, too, not just a plain color.
Sold in 2013, for $142 million
Three Studies of Lucien Freud, by Francis Bacon
This is the highest price for a piece of art recorded at an auction. And another piece covering an entire wall.
Sold in 2013, for $105 million
Silver Car Crash, by Andy Warhol. I’m not going to post a picture of the piece, which simply represents a collage of photographs of a fatal car wreck — way too macabre for my taste.
Now you don’t need to hint or attempt to wangle an invitation to see the most expensive art in human history. Are these pieces of art worth upward of $100 million? Beauty, as they say, is in the eye of the beholder.
His or her wallet, too.
Speaking of which, Grant tells me he saved a client over $2,000 in insurance premiums over a year. How? She talked to him. Why don’t you give it a try? The savings might not buy one of these pieces of art, but who knows what you can do with those savings!