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The capital markets speculators are getting into their seasonal hormonal rage over the auction house sales, along with the frenzy of art dealer activity that surround them.

Increasingly, for hedgies, along with other rich City of London people and Wall Streeters, the art market has taken the place that football games and stock car races have for the masses. The more thoughtful among them, though, wonder that something seems to be missing from the art market.

The answer is sellers. Not enough stuff to go around. I spent a little time this past month looking over what was on offer at the Old Master sales, and came away more than a little disappointed. To the credit of the art world, there is much less fudging over attribution than there was, and better scholarship on the part of the auction houses. But apart from a couple of great collections, and a few striking individual pieces, there’s a lot that isn’t there. This season, for example, I saw the only Chardin that I have actively disliked.

The same is true of the market for 19th century and early 20th century European and American art. The sales have been, and will be “successful”, in the sense that giant amounts of money will be thrown at pictures and sculptures, but to what end? It’s like a land war in Asia …expensive, and you don’t get much, if anything. It’s not that the auction houses and dealers haven’t been trying their level best. The problem is a fundamental one – there aren’t any upper classes, anywhere, in precipitous decline.

Not to put too fine a point on it, but you need sellers, as well as buyers, to make a market. In the late 19th century, you had European landowners being bankrupted by efficient American, Canadian and Australian farmers. They had a lot of pictures on the walls that had to go to see off the bailiffs. Otherwise, the American collectors would have had a hard time getting started.

The liquidation of the Russian aristocracy and merchant class, along with the Soviet government’s need for foreign exchange, led to another wave of market making. That is so over. The Russian art market, both in the sales and through dealers, is simultaneously hitting new highs and sucking up some real garbage. Last year, various Russians told me that they were intent on buying up and repatriating all their country’s good art and objects that had ever been exported. I think they have nearly succeeded. Much of the Russian art I saw on offer this year, while expensive, should have never emerged from the Lubyanka or the mines at Kolyma.

So there is no Greece for the present-day Romans to buy up. That explains why the new rich of the capital markets are bidding up contemporary art. They don’t have
a choice if they’re going to make a statement.

There are a few schools of just overpriced – rather than insanely – overpriced, art of the past that haven’t been entirely overfished. Some of the postwar European works that didn’t grab collectors in the recent past. Take a look at European abstract Impressionists, and the Cobra school.

But for the most part, people who have any money left from what they, or their families made, want to hang on to their art. We’ll have to see an end to the simultaneous prosperity of the world rich to see real quantities of the better stuff on offer.

Speaking of overpriced markets, you may have noticed that the uranium, and uranium stock frenzy accelerated this year. This is probably a good time to do some asset reallocation, ie selling, if you have uranium stocks. The heavy metal is selling for more than $100 a pound, driven by an ambitious Chinese nuclear programme, as well as a lot of talk of nuclear industry expansion in the rich world. Production is stagnant or down, and it seems they just aren’t going to be making the stuff any more, at least according to a Mr Market on methamphetamine.

In 1948, production and reserves of uranium also looked as though they could never satisfy the demands of the US weapons programme. So the Atomic Energy Commission of the day set out a series of domestic uranium circulars, in which it offered to buy up all the uranium on offer at prices of a bit more than $7 a pound. The last circular, number five, set a price of $8 a pound. By 1958, the US had uranium coming out of its ears. In 1962, circular five was cancelled, with a “stretch out” programme for the industry. The intervening frenzy, by the way, was well documented in an I Love Lucy episode about a uranium get-rich-quick scheme.

Well, even in real terms we’re well above the circular five price which, to go back to the art market, gave Joseph Hirschhorn the mining profits to build the eponymous museum of modern and contemporary art in Washington. There’s a lot of uranium in the world. It’s not like platinum, which actually is rare. You just have to find it and develop it. For a hundred bucks a pound, they will. Sell the stocks.


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