ArtFair

Art Basel was fun again this year. After a recession-stained climate last year led to toned down partying, collectors and dealers (and everyone else) was back in style this time around. According to the Wall Street Journal, it seemed like everyone was throwing a party this year, with the likes of Larry Gagosian and Lance Armstrong getting in on the action. And, the parties didn't suck. Hosts went all out -- with live music and other attractions -- to separate themselves from the competition. Some even tried something new, with the words "Everybody has a Damien Hirst" uttered.

Of course, there were enough celebrities in supply to ensure that every host had one to boast about. Scott Stapp, lead singer of Creed, and Russell Simmons, for example, were present at the Mondrian South Beach Hotel. Simmons is a committed collector of works by Jean-Michel Basquiat and Barbara Krueger and was in town to raise money for his charity, Rush Philanthropic Arts Foundation.

An after-party hosted by Julian Schnabel's art dealer son, Vito, attracted some big names, as well. Peter Brant, an art collector who recently tried to move "Brother Sausage" by Basquiat at auction, was there, along with Abby Rosen.

Yet, there were more intimate dinners and cocktail parties than in past years, according to Art Basel regulars. A few corporate sponsors still made the plunge, including UBS, NetJets and Cartier.

Art Basel Miami Beach starts on Thursday, and the word "test" is being used instead of "expectation." Even though there have been signs this month that the art market is turning the corner (or at least trying), caution remains pervasive, and the market is still seen to be fragile. The fair's organizers have said that profits will be down at least 20 percent for everyone involved, because of lower prices and a decline in the number of exhibitors.

Sixty of last year's participants have dropped out already, and the number of satellite art fairs around Art Basel Miami Beach has fallen from 22 to 16. Layout changes are taking the shift in participation and making it benefit those who remain. Exhibit space has been increased by 20 percent, and booths in the main art galleries area will be larger, as a result. This is where most of the action is. Eighty-five percent of the dealers have come back, and the number of stands has increased from 265 to 270.

Though prices are expected to be down at the Miami fair this year, artists and galleries aren't giving their work away. Emmanuel Perrotin, the Paris gallery, is trying to move Takashi Murakami's "Warp," painted this year, for $1.5 million. The same gallery is also pushing a Duane Hanson sculpture for $425,000 and a photographic print by Paola Pivi for $33,000. Edward Tyler Nahem, a first-timer at Art Basel Miami Beach, has a room full of paintings by Alejandra Icaza, which are selling for $35,000 a piece.

The crowd in Miami is likely to be a return to past decades, in which art collectors and investors -- rather than what Todd Levin, director of Levin Art Group calls the "fashionista crowd" -- dominate the scene. Art Basel Miami Beach thus might become an art fair again.

November 2008 was pure living hell for the art auction houses. The bottom had just fallen out of the market ... and they were still saddled with pieces for which they'd offer guaranteed minimums. This is exactly what happened with Roy Lichtenstein's "Half Face with Collar."

The 48 square inch painting went under the gavel at Sotheby's almost a year ago, with the seller, Italian art dealer and collector Gian Enzo Sperone, protected by a $15 million minimum by the house. Now, it's on display at FIAC, right next to Andy Warhol's "Green Disaster," in the Projet Moderne section.

For many, the question of who owns the Lichtenstein painting has been raised. Is the fact that it's hanging as an entry from the Gagosian Gallery meaningful? A source at FIAC tells Bloomberg News that it is: "Larry owns it and it's definitely for sale."

It would be poetic, of course, for the piece to fetch the $15 million it failed to reach last November, but for now, all we can do is wait for the result (if any).

The big numbers and grand auction centers around the world remain under pressure, but small local art scenes are finding ways to thrive. Like the small cap stocks that lead financial markets out of a recession, maybe it's the emerging artist and local art scene that will deliver us from this slump.

Grand Rapids hosted ArtPrize, a new art show this year, and it was so successful that the organizers are going to do it again in 2010. Businesses in town got a bump, and Grand Rapids was able to boost its cred as an art destination. The 18-day competition commenced on September 23, 2009 and drew tens of thousands of visitors to the Michigan city. Some restaurants ran out of food, because they weren't expecting such a large influx of guests. Doug Small, president of the Grand Rapids/Kent County Convention and Visitors Bureau, told The Associated Press, "Nobody had any clue this would happen."

The competition attracted 1,262 entries, varying in size, shape, style and medium. They were displayed in lobbies, on bridges, in parking lots and in the Grand River -- anywhere in town where they could find a place to exhibit. The winners were chosen by the voting public, using the event's website and text messaging, with 37,264 people participating.

The winner was Ryan Ortner of Brooklyn, New York, with the oil painting "Open Water No. 24, measuring 19 feet wide, taking first place, with Tracy Van Duinen taking second and Eric Daigh coming in third. Ortner lent his painting to the Grand Rapids Art Museum, which is going to display it until January.

Collectors are looking and thinking. They might take action, but it's still too soon to tell. The action at Foire Internationale d'Art Contemporain (FIAC) in Paris is deliberate: nobody's rushing to put their cash on the table. However, there are signs that some pricey and prestigious pieces may sell.

Last week, a painting by Piet Mondrian was put on reserve, at a price between $30 million and $40 million. One of Pablo Picasso's works was reserved, as well, at $24 million. Back in the art boom, these pieces would have been snapped up already, but dealers are saying that it's taking longer to complete sales at FIAC this year than last year. Even billionaires need convincing in this market, it seems.

Also, there's a greater desire to stay under the radar. Whether it's to maintain some privacy or hide the fact that they have the means to spend more than they like, some owners and buyers are turning to private sales. Bargains, thus, won't make it into the public record – sparing sellers the embarrassment and preventing the other holdings of all collectors from sustaining a measurable decline in value. If premiums are paid, buyers won't have to reveal that they have the cash to pay more, preventing prices from increasing broadly.

Are there any billionaires left in Russia? The last year has been pretty brutal on Russia's upper crust, and we haven't seen a whole lot of they guys who used to drop cash like it was vodka. Art Moscow, the largest art fair in Russia, opens tonight, and gallery owners are artists are hoping the likes of Roman Abramovich will see fit to plunk down some roubles on canvas.

Art Moscow features works from 40 galleries – both from Russia and around the world. Originally, the art fair was supposed to run in May, but Expo Park Exhibition Projects Ltd., its organizer, pushed it back to hit at the same time as the state run Third Moscow Biennale of Contemporary Art. The dual event may bring a bigger turnout, but it will have to overcome a 10 percent contraction in the Russian economy.

Counting against Art Moscow ... aside from general economic malaise ... is the fact that the sale of Russian artwork is down. The major auction houses in London moved only $48 million in Russian art in June, down more than half from the same auctions in 2008.

So, how likely is a stream of cash? Igor Markin, a big-time collector and owner of the Art4.ru museum, says he "hasn't bought anything in a long time."

The artists are blaming the weather. Despite the fact that we're in a pretty nasty art slump, the optimistic believe that three days of sunshine lured potential art buyers to the beach instead of the ArtHamptons fair in Bridgehampton, Long Island this weekend. Purchases were made, but in general, they were disappointing. Realistically, the sales made sense, given what we've seen at auction over the past year.

Several celebrities did attend the art fair, but they brought little excitement, it seems, beyond their appearances. Jon Bon Jovi, personalities from The Real Housewives of New York City, Kelsey Grammer and Russell Simmons were all spotted, but Bloomberg didn't report any purchases.

The biggest name at the ArtHamptons fair, of course, was Michael Jackson – a creation by Andy Warhol. Originally, Vered Gallery had hoped to sell it via silent auction, but the gallery yanked the portrait late last week ... claiming that collectors were looking at the piece but "needed more time to assess the value."

Or, maybe they were just at the beach, like everyone else, apparently.

The mood in the Hamptons has been affected by real estate prices, plunging bonuses and – of course – the ongoing art market slump. But, the collectors gathering at ArtHamptons are trying to keep stiff upper lips. Rick Friedman, its founder and executive director, is saying that now is the best time to enter the art market, with low prices building in an inherently greater upside. And, there's no doubt. If you have the cash to put into the art market – and the inclination to invest in this asset class – now is the time to do it.

The major constraint on the art market isn't the notion that it's a bad time to invest. Any fairly serious art collector can see that this is the time to make a move. Like any other "discount," you can't take advantage of it if you don't have the price of admission. You might be able to pick up the Old Masters for a relative song right now, but if your bonus got slashed this year, the opportunity may not be possible.

So, what's moving at ArtHamptons this year?

Jane Wilson, who one a Lifetime Achievement Award this year, has seen some success, along with Elliott Erwitt, Lillion Bassman and other artists who lean toward decorative pieces. For some, the year's even been positive, with gallery director Joseph Newman calling the first quarter of this year the best he's had. Trompe l'oeil is working well, too. Interested in buying a Madoff joke for $13,500? You can do it with Eric Forstmann's Made Off with the Bail Out Package.

Meanwhile, soft porn is moving ... so, at least someone is making money on the skin business (the hardcore guys sure aren't). Suggestive images have always packed a bit of a thrill, and pieces that ply the flesh are doing well out in the Hamptons this year. Boyarde Messenger's Frilly in Yellow ($3,350) and Changing Rooms III moved for almost three times that amount.

The feel is somewhat upbeat at ArtHamptons this year, but the action is definitely taking place in the emerging artist space. Nonetheless, there are some big ticket items up for sale. At Vered Gallery's booth, you'll find a Picasso, Chagall, de Kooning and Rauschenberg – not to mention a 1984 portrait of Michael Jackson by Andy Warhol. If you're liquid, now's the time to enter the market!

If you put any faith in conventional wisdom, the best time to invest is when the market is at the bottom. So, there's no time like the present to put some cash into the fine art asset class. Hey, what passes for a solid performance these days is more than 70 percent off last year's levels. Before you invest anywhere, it pays (sometimes literally) to do your homework, and this is especially true with the art market. A fourth grade math education equips you to watch a stock prices ups and downs – and it is supplemented by what we pick up on the nightly news and (I hope) on the likes of BloggingStocks and DailyFinance.

Art, however, is different.

To understand this market, you're staring down the task of learning thousands of years of product history, in addition to a relatively illiquid marketplace in which prevailing tastes play a major role. You can carve this mammoth amount of information into smaller pieces, but you still need to identify a starting place. It's easy to get intimidated ... and also unnecessary. Take a look at the 10 tips below to make the art market a bit more accessible.

1. Take a recreational interest in art
If you're going to commit several thousand dollars to an art investment, you really ought to be interested in it. Start by going to museums, just to get a sense of the breadth available to you ... and to decide what you like. Some of the most attractive pieces may be way out of your price range. I love Francis Bacon's work, but there's no way it will grace my walls anytime soon, not even with the help of the current art market slump. But, you can use the masters to get a sense of the styles that turn you on, which you can use to choose pieces that are closer to your price range.

2. Know where to find insights
Okay, my bias toward Luxist's art market reporting is pretty obvious, but the articles here can help you get started. Also, check out art market publications like ArtInfo, ArtPrice and Art Market Blog. Bloomberg also provides solid art market coverage. Once you have the basics nailed down, spend some time on the auction house websites, like Sotheby's and Christie's. Get a feel for how the marketplace operates.

Gallery: The artwork of Julio Aguilera