Bernanke deserves art museum spot next to Pollock
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Ben Bernanke probably deserves a spot somewhere in New York’s Museum of Modern Art. A record $495 million sale at Christie’s on Wednesday evening set new highs for Jackson Pollock, Roy Lichtenstein, Jean-Michel Basquiat and other contemporary artists. More collectors than ever have $20 million to spend on a single work. The buoyancy of the market paints a picture of an art world indebted to the Federal Reserve chairman and his alternative asset-friendly monetary policy.
The $294 million sale at Sotheby’s a day earlier wasn’t quite in the same league. Works by one formerly red-hot living artist, Jeff Koons – a favorite of embattled hedge fund boss Steven Cohen – had a mixed experience across the two sales. But the overall impression is of private equity barons and hedge fund bigwigs jostling with the usual collecting suspects in what the Christie’s auctioneer called “a new era” of global competition.
Ultra-loose monetary policy, as practiced by the Fed and other central banks, makes the returns available on more traditional holdings like bonds unappealing and pushes up the value of other assets, from stocks to real estate and art. Throw in rising global wealth, a concentration of riches in the United States in particular, a return of better times for financiers and the allure of social bragging rights, and the ingredients exist for auction records.
It helps when the artists in question are in fashion or the works unique, as with last year’s $120 million sale of Edvard Munch’s “The Scream.” It was the only version of the famous image not in a museum. The anonymous buyer – widely reported to be Leon Black, founder of private equity firm Apollo Global Management – lent it to MoMA for six months, a period that ended in April.
If it’s a Fed-fueled bubble, at least it’s one that can trickle down to lesser artists and involves buyers who can afford the worst-case outcome – like the London jeweler who, according to the New York Times, splashed out $56 million for Lichtenstein’s “Woman With Flowered Hat” as a 75th birthday present to himself. Cheerful sellers, meanwhile, might consider commissioning an appropriately flattering likeness of Bernanke.