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For the contemporary art market, then, the fall 1990 sales were a massacre. Scared by the descent of the Nikkei stock index, the Japanese -- who in 1988 accounted for more than half the total recorded sales volume of all art bought at auction worldwide -- bid sluggishly or sat on their hands. The Japanese buyers did not even come out for a Van Gogh still life that was expected to make $12 million to $16 million at Christie's Impressionist and modern sale two weeks ago. It too was bought in, at $9.5 million. However, a fine Van Gogh ink sketch was bought by a New York dealer for $8.4 million, the highest price ever paid at auction for a drawing.
Overall, the sales cast further doubt on auction-house techniques. Sotheby's all but ceased lending money to buyers after it was so badly burned by Alan Bond's default on Van Gogh's Irises, bought but not paid for in 1987 for $53.9 million with the help of a $27 million loan from the auction house. But this fall's victim has been the equally controversial system of guarantees, a product of the fierce competition between Sotheby's and Christie's, whereby the auction house contracts to pay the seller a given price for artworks -- whatever the outcome of the sale -- in order to win the right to sell them. Sotheby's became the unwilling owner of 13 of 35 guaranteed paintings from the estate of Henry Ford II that failed to find buyers at a collective estimate of $23 million to $30 million. Wall Street has reflected the art market jitters: for some months now, Sotheby's stock, which was trading at about $35 in October 1989, has hovered around $10.
Auction spokesmen put what spin they could on it all, speaking of increased selectivity, a healthy trimming of the market, and how first-rate things would continue to get first-rate prices. (That an exceptional painting could still make an exceptional price was in fact confirmed earlier this month at Sotheby's in London when a great Constable landscape, The Lock, 1824, was bought by Baron Thyssen for $21.1 million.) Michael Findlay, head of Christie's Impressionist and modern art sales, called the market a "roller coaster" -- inexactly, since roller coasters go up and down but always finish at the level where they started. The next big sales, in the spring, may or may not bring a second dramatic plunge. But they will almost certainly see more deflation in the contemporary market, which even the most purblind bulls now perceive as overrated and overpriced.