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Journalism of Courage
An auctioneer at Sotheby’s brings down the hammer on ‘The Massacre of the Innocents’, a long-lost painting by Flemish Old Master Peter Paul Rubens. The sale price is $76.7 million—eight times more than expected—making the ‘Massacre’ the third-most expensive painting in the world.
Across the city, dazed stock market traders emerge from their offices at the end of another punishing day. They have just watched London’s blue-chip FTSE 100 index shed another 120 points to slide towards its lowest level in five years. The date was July 10 this year, and the contrasting fortunes of the stock and art markets can seldom have been more marked. The FTSE has fallen even further since then while the art market remains robust, lending support to the theory that when wealthy investors take fright from equities, they often plough their cash into pricey paintings.
“The most spectacular example of this was the period immediately after ‘Black Monday’ in 1987, a period which saw the greatest art boom of the 20th century,” said Godfrey Barker, a London-based art writer. The value of stocks in London plunged 11 per cent on Black Monday, October 19, 1987, and another 12 per cent the following day—the biggest falls ever seen on the FTSE. Within weeks, one of the most lavish spending sprees on fine art was under way, with investors—led by the Japanese and a handful of Wall Street speculators—buying up virtually any picture they could lay their hands on.
Things reached a crescendo in May 1990 when, within three days, Vincent Van Gogh’s ‘Portrait of Doctor Gachet’ sold for $82.5 million and Pierre-Auguste Renoir’s ‘Au Moulin de la Galette’ went for $78.1 million. Twelve years on, the two remain the world’s most expensive paintings in dollar terms.
A similar if shorter-lived art boom can be traced following the dotcom debacle of late 1999 and early 2000. For months, investors ploughed billions of dollars into companies on the US Nasdaq index, lured by promises of ever increasing profits fuelled by a technological revolution. When the bubble burst in early 2000, the fine art market was one of the main beneficiaries.
According to figures compiled by London-based company Art Market Research Index, the price of contemporary art works rose nearly 70 per cent in the first nine months of 2000 while the Nasdaq slumped. French Impressionist paintings gained 52 per cent over the same period while Old Masters added 47 per cent. “The reason the art market shot up like a rocket between January and September 2000 was that people were subtracting their money from dotcom investment and parking it elsewhere,” Barker said.
