Word: bidness
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Dates: during 1980-1989
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...past decade is that liquidity, to many people, may be all that art means. The art market has become the faithful cultural reflection of the wider economy in the '80s, inflated by leveraged buyouts, massive junk-bond issues and vast infusions of credit. What is a picture worth? One bid below what someone will pay for it. And what will that person pay for it? Basically, what he or she can borrow. And how much art can dance for how long on this particular pinhead? Nobody has the slightest idea...
...beauty of the loan system, from the point of view of the auctioneer, is twofold. It inflates prices whether the borrower wins the painting or not: like a gambler with chips on house credit, he will bid it up. Prefinancing by the auction house artificially creates a floor, whereas a dealer who states a price sets a ceiling. And then, if the borrower defaults, the lender gets back the painting, writes off the unpaid part of the loan against tax, and can resell the work at its new inflated price...
Aponte's version is different. Consumer affairs found "gross irregularities" in art auction houses, he says. Chandelier bidding amounted to "an industry practice, both above and below the reserve." (A chandelier bid above the reserve violates present rules.) Aponte was also concerned about the practices of not announcing buy-ins and of keeping reserves secret. The auction houses held that if bidders knew what the reserve on a lot was, it would chill the market. Art dealers, lobbying the agency, maintained that the reserve should be disclosed and that bidding should start...
...underbid the $20.68 million De Kooning and bought, among other things, a Johns for $12.1 million. "I thought Saatchi had good intentions," Scully says. "Now it turns out that he's only a superdealer. These guys create price levels for themselves. They put one painting in a sale and bid it up to huge levels. And the artist loses control of his work, while his relations with the dealer he has worked with so long go for nothing, absolutely nothing. We are just pawns...
...Morishita, a secretive businessman who got a one-year suspended sentence in Tokyo in 1986 for securities fraud. Morishita is reputedly worth a trillion yen ($7 billion), and may be planning a takeover of Christie's -- although it is unlikely that the Monopolies and Mergers Commission would approve his bid...