Books: The Supermodel And The Brillo Box, By Don Thompson

(Drivebycuriosity) - Contemporary art is full of surprises and the market is booming. Skate's Art Market Research reports, that paintings by Andy Warhol, Gerhard Richter, Francis Bacon and other top stars sold at auctions worldwide for more than $50 billion dollars (artnews). It seems that the one percent is pouring large parts of their wealth into contemporary art.

The book "The Supermodel and the Brillo Box: Back Stories and Peculiar Economics from the World of Contemporary Art" by Don Thompson describes this world (amazon). I learned a lot there, but I also had much fun. The book is written in an amusing style and it is spiced with a lot of facts and funny anecdotes.

The author, who calls himself an economist and contemporary art enthusiast, describes precisely the world of art collectors, artists, auction houses and galleries. Thompson sees the universe of contemporary art through the lens of a market economist, "puzzled by the alchemy that causes a Warhol to be valued at $63 million rather than $5 million or even $100,000." In this book he explains the peculiar economy of the art market, illustrated with a lot of success stories and flops.

What is driving the market? "Beautiful or not, the central characteristic of twenty-first-century contemporary art is that traditional artists skills of composition and coloration have become secondary to originality, innovation, and shock-hovwever achieved", says Thompson.

The title of the book refers to the lifelike, nude waxwork of former actress and supermodel Stephanie Seymour which you can see on top of this post. Thomson provides not just the amusing background story to "Stephanie", he also describes - with many more examples - how strange this market functions. For instance the artist Félix González-Torres´s created 1992 an installation, called "Untitled" (Portrait of Marcel Brient): 200 pounds (90 kg) of cellophane-wrapped candy, intended to be piled in the corner of a room and consumed by guests. To avoid shipping costs from his usual candy supplier in Chicago the artist purchased from a local store. Estimated at $4 to $6 million, the installation sold for $4.4 million.

I enjoyed Thompson`s well written reports about auctions, for instance of Takashi Murakami`s 1997 "Miss ko2", a 6-foot (1,8 m) tall fiberglas sculpture of a bigbreasted cocktail waitress, a high-heeled secret agent character from a popular Japanese animated cartoon; "hammered down for 46.8 million".

The author delivers amusing and elaborated portraits of mega-star artists like Banksy, Damien Hirst, Ai Weiwei, Takashi Murakami and dedicates a whole chapter to Andy Warhol´s factory and their "products". He describes the complex issue of authentication of "Warhols" by the "Andy Warhol Art Authentcation Board", which accepted sometimes work, which is not the work by Andy Warhol, but which is signed, dedicated and dated by him. But Thompson also writes about artists who had rosen like a comet and fell out of favor again.

We also get introduced to famous and important art collectors who have strong influence on the market, the prices and the reputation of certain artists. And he describes the competition between the powerful auction houses Sotheby´s, Christie`s and Phillips and the struggle between the auctioneers on the one hand and Gagosinan and other art dealers (art galleries) on the other hand. Futhermore he explains how auctions and other marketing strategies function and highlights the growing importance of Art Basel, Frieze and other art fairs. In addition Thompson outlines the globalization of the art market, its rapid growth in China and its expansion to Abu Dhabi and Quatar which both influence demand and prices worldwide

"The Supermodel......." is entertaining and inspiring. Recommended for art lovers, broad minded economists and everyone who is interested how the complicated world around is functioning.

Economy: Gasoline - Unions Versus Car Drivers

(Drivebycuriosity) - Today US average gas prices jumped more than four cents (plus 2%) - the largest one-day spike since August 2012, reports AAA (fuelgaugereport). This is odd, because oil prices (Brent Crude) fell $2.90, around 5%, as a response to a jump in the US oil inventories which climbed on a record high (marketwatch).

The culprits for rising gasoline prices aren´t the oil sheiks. Saudi Arabia is continuing its production, at least for now, and Iraq, Iran and other oil suppliers are pumping more than last year. The reason for today´s price jump is a strike at the U.S. refineries (reuters).

Because of the strikes some refineries are shut down, others reduced production of gasoline, diesel, heating oil and other oil products. These strikes are reducing now the supply of gasoline in the US which causes the price hike of the recent days.

I seems that some unions are flexing their muscles to enforce the interests of their members at the cost of the economy.

Commodities: Why The Oil Rig Count Hysteria Will Be Short-lived

(Drivebycuriosity) - Oil prices are rallying again. Since last Thursday the price for Brent Crude jumped from $48 to $57, and WTI (the American type) leaped from $44 to $52, a plus of around 20%.

It seems that the market is obsessed with the number of US oil-drilling rigs. Last week the number of US rigs dropped by 94 units to 1,223 rigs, a minus of around 7% (marketwatch). The drop in the rig count fanned speculation that the US oil production, which is a major cause for the current oil glut on the markets and the dropping oil prices, will shrink soon.

The funny thing is, until recently nobody cared about the number of oil rigs. The media didn`t report much about US oil rigs and the market ignored the rising numbers. Why does a falling rig count cause a sharp price reaction, when the rising rig count before last autumn was totally ignored from the market?  I think that the price jumps since last Thursday are just a hysterical reaction and are not backed by the fundamentals.

I suppose that prices around $43 for WTI caused some producers to idle the least-profitable rigs which lead to the falling rig count last week. But the majority of the oil rigs is still profitable and will continue to pump oil  (businessinsider  bloomberg). Therefore the number of idled oil rigs will go down significantly and the total count will stabilize soon, especially after the recent oil price jump.

The market also ignores the climbing oil supply from Iraq, Russia, Iran an other countries, which are still fueling the oil glut. Therefore the oil price will stay under pressure and resume its fall. The hysteria about the recent drop in the US oil rig count will be short lived.

Economy/Financial Markets: Why Fear Is Self-Destructive

(Drivebycuriosity) - "2015 is going to be the year that fear becomes self-fulfilling", claims Felix Salmon, a star blogger and writer for the left-wing magazine Slate (fusion). As Salmon visited Davos, where the world´s elite and their groupies met last week, he got the impression, "that fear is very much on the ascendant", which would endanger global growth and prosperity.

I disagree. I believe that the rising fear, if it really exists, will be self-destroying. When the German´s automobile club ADAC warns that some Autobahn segments will be jammed at next Weekend, car drivers usually respond and will avoid to drive there at this time. And the jam won`t happen.

As indication for the growing fear, Salmon refers to the extremely low and falling interest rates of of five-year German bonds. But, low interest rates are good for the economy because borrowers can make more profits - and dividend paying stocks will be more attractive. Therefore German´s economy - and their neighbours` - will benefit from cheap money.

According to the pessimistic Salmon "the overwhelming consensus is that asset prices" - like stock prices  - "are much more likely to go down substantially from here than they are to go up substantially".  But the "overwhelming consensus" is already priced in, meaning that stocks are cheaper then they should be.

It also means that the majority badly missed the rally on the stock markets and has to come back because the expected casualties for global growth and prosperity won`t happen. I believe that pessimism - and fear mongering a la Salmon - has been accompanying economic growth and stock market rally since 2009 and has been creating investing chances all the time. 

Books: Secret History, By Donna Tartt

 

(Drivebycuriosity) - Edmund, called Bunny, is an extremely obnoxious guy. No wonder that his "friends" had to get rid of him.  The novel "The Secret History" by Donna Tartt focuses on Bunny, his assassination and the aftermath (amazon). The murder is already revealed on the first page of the novel. The plot, written in first person, is set in the North East US (Hampden College, Vermont) somewhat in the late 20th century. The story circles around a group of quirky college students who specialize in the language, literature and the culture of the Old Greek. 

I read the novel because I love Tartt`s masterpiece "The Goldfinch" but this book disappointed me. The author tortures her readers over too many pages (to tell a number would be a spoiler) by describing what a pest this Bunny was. I really don´t get why anybody let this "Bunny" closer than 10 feet, let alone calling him friend. After the murder the plot gets stronger and stronger and evolves into a deeply psychological drama in the style of Patricia Highsmith. 

Reading "Secret History" leaves mixed feelings. Some of the described odd characters are interesting and on some pages the author created an compelling atmosphere. The relationships between the characters, especially sexually, were really complicated, which made them interesting but they were also hardly believable. And Tartt needed to much time (or pages) to find her rhythm and she spend too much room for references to the ancient Greek culture. Maybe a good editor would have helped.

"Secret History" - published 1992 - was Donna Tartt´s (born 1964) debut novel. In 2002 she published "The Little Friend", her second book. In 2013 followed the wonderful "Goldfinch". If the author continues this rhythm of delivering every 10 years or so something better, than book lovers can look forward to a masterpiece in the year 2023 or so. Can`t wait.



PS: For illustration I used Jeff Koon`s "Antiquity" because this painting represents the topics about these friends talked all the time.

Movies: A Most Violent Year

(Drivebycuriosity) - 1981 was a difficult time for New York City.  Crime ruled the streets and oil prices peaked, paralyzing her economy. No wonder that oil trucks get hijacked in bright daylight. The movie "The Most Violent Year" is set in this milieu (imdb). The film tells the story of Abel, an ambitious entrepreneur, who has big plans as local oil seller, & Anna, his equally ambitious wife and business partner.

Director J.C. Chandor, who also wrote the script, delivered a fascinating portray of a fast social climber and self-made man, who is surrounded by a viscous environment: Abel & Anna have to struggle not only with more or less criminal competitors, they also have to deal with a powerful trucker union and a nosy district attorney, who his politically highly ambitious. This leads to a chain of events which are fascinating to watch (this is a spoiler free blog). I really cared how Abel & Anna fared.

The movie gets most of its strength from the compelling acting. Oscar Isaac impressed as Abel. The actor radiates the aplomb and self-confidence someone needed in this times to survive. Jessica Chastain performed convincingly as his congenial partner.

"The Most Violent Year" is an underrated gem of cinema.

Culture: Sumac - A New Star On The Firmament Of Heavy Metal

 

(Drivebycuriosity) - There is a new star on the firmament of heavy metal: Sumac. The recently founded group consisty of members of well known metal bands: Isis, Russian Circles & Baptists. In the 1960s and 1970s such groups were called supergroups. I remember bands like Cream; Crosby, Still, Nash & Young and Emerson, Lake & Palmer.

I miss the late band Isis very much and own still some CDs by them. They got their - no infamous name - from an ancient Egypt goddess. I am sad that I didn´t have the chance to see them live but I have attented 3 Russian Circles gigs (driveby  driveby  driveby) and always enjoyed their complex intrumental pieces which started slow & atmospheric and exploded then into powerful gravitational waves.

It seems we have now a new supergroup of heavy metal. The tidbits I could find on Internet are promising (soundcloud soundcloud ). It sounds that they combine the best of their mother bands. Their debut album "The Deal" is expected for February 3rd (aaronbturner).

I think someday they will come to New York City, everybody does.

Gotham is looking forward to you, Sumac.

For illustration I used Shiraga Kazuo`s "Chikatsusei Maunkinshi" (Golden Wings Brushing the Clouds Incarnated from Earthly Wide Star) , found @ Institue of Art in Chicago which might represent somewhat the power and roughness of their music.