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It looks like art market watchers (including me) were right for the wrong reasons. At the Sotheby's contemporary art auction last night, $84.5 million in sales were completed, but the highly coveted Lucian Freud didn't hit its low estimate. Lucio Fontana, Yves Klein, Willem de Kooning, Peter Doig and Frank Auerbach, however, led to pitched bidding battles.

The evening's highest price was paid for de Kooning's "Untitled XIV," which fetched 4 million pounds over the phone, beating its high-end estimate by a third. The seller was a collector from Europe who picked up the painting from the artist's estate. Doig's "Saint Anton (Flat Light)," an Alpine scene, was good for 2.8 million, also via phone.

But, Lucian Freud still stole the spotlight, if not the top bid. His self-portrait with a black eye carried a low-end presale estimate of 2.8 million – after having been offered at a lower price in private sale before the auction. The seller, Victor Chandler, is a bookmaker based in Gibraltar with a penchant for secrecy: his press officer refused to be named (according to Bloomberg News).

The Lenz collection, also high-profile, performed very well at Sotheby's. Only one of the 47 lots wasn't able to move, and the entire collection sold for 23.2 million pounds, soundly beating a presale estimate of 11.2 million pounds to 15.2 million pounds. The most expensive piece was Klein's "Fire" painting "F 88," which brought in 3.3 million pounds, just shy of its high estimate of 3.5 million.

The evening's surprise came from Auerbach, who's 1956 drawing was purchased by London art dealer Offer Waterman for 1 million pounds, far above the presale estimate of 50,000 pounds to 80,000 pounds. Interestingly, Sotheby's senior international specialist Oliver Barker noted to Bloomberg News, "The gap between Auerbach and Freud and Bacon is closing." Are we seeing a new evolution in the Francis Bacon supply chain?

Overall, the contemporary art auction beat its high-end presale estimate of 45 million pounds and thrashed the 2009 result for the same auction, a mere 17.9 million pounds for 27 lots.

All secrets eventually come out. At the recent London auctions, in which both Sotheby's and Christie's saw several lots set records, Russian collectors poured some money back into the art market, and Laurence Graff, chairman of Graff Diamonds, parted with a healthy dose of cash. It's this action that caused a combined tally of £258.9 million (including fees), more than double the result a year earlier.

The UK-based diamond dealer sunk £8.1 million into Pablo Picasso's "Tete de Femme (Jacqueline) at the Christie's auction, spending 100 percent more than the high-end presale estimate for the piece. According to Bloomberg News, Graff confirmed the acquisition by e-mail.

Russian billionaires got back into the game, as well, and they exercised better judgment than they did during the art boom, when prices for artists such as Damien Hirst were propelled to absurd levels.

The Impressionist sector has held on rather well, by comparison. "The market for Impressionist and modern art hasn't been as frothy and speculative as contemporary," said Guy Jennings, partner in the London-based dealership Theobald Jennings. "Last year, prices might have slipped five or 10 percent, but since then there's been some asset inflation. That might not be the case in six months' time if there's a double-dip recession."

In 2008, an astounding 65 pieces by Damien Hirst fetched seven-figures each at auction. The total came to $230 million. The numbers are nothing short of staggering, especially when you compare it to what he did six years earlier, when the annual total for his work hit a mere $2 million. Clearly, some excitement was generated, and art collectors rode the wave. The last major sale was conducted at Sotheby's on September 15 and 16. "Beautiful Inside My Head Forever," as it was called, made a killing for the hottest living artist ... right before the financial world went to straight to hell. This bold move, however, led to a period of silence for the artist and stagnation for his collectors.

Shortly after the mortgage market mayhem became a global financial affair, unsold rates for Hirst's work shot from 11 percent to 55 percent by the end of the year. A mere 12 months after his he emptied the insides of his head -- not to mention plenty of inventory -- prices for Hirst's work returned to 2004 levels. A year after buying "Butterfly" painting "I Miss You" in late October 2008, Christie's unloaded it for a mere $450,000, only half what it had paid. In 2004, the piece's initial auction price was $415,000. I suspect this is at least part of the reason why the auction houses backed away from guaranteed minimum pricing ...

With the books closed on 2009, only two pieces by Hirst pierced the million dollar mark, both from the "Butterfly" series. "Tranquility" brought in $1.5 million back in May at an auction in Hong Kong. Almost half a year later, "The Importance of Elsewhere-The Kingdom of Heave" brought in close to $2 million, again at a Hong Kong auction. Both sales came from Seoul, not the usual New York and London communities.

The London art auctions are upon us, and a year has made a hell of a difference. The auctions at Christie's, Sotheby's and Phillips de Pury are expected to fetch at least $104 million, which would be an increase of 68 percent over the same season in 2009. If the houses can pull this off, the art market will probably breathe a collective sigh of relief after more than a year of downright awful results.

At this point last year, the art market was in miserable shape. It was already in trouble, as the recession had begun to crystallize over the summer of 2008, a process which was hardened by the financial market meltdown in September. By the end of the year, prices had plummeted, and the practice of guaranteed minimum pricing had generally been abandoned.

By the end of 2009, signs of a recovery began to emerge, though few were willing to commit to it. A few pieces, such as Andy Warhol's "200 One Dollar Bills" turned in strong performances, but nothing was solid enough to call a trend. Nonetheless, hopes are high for the next round of sales, which will include museum-caliber paintings by Peter Doig and Yves Klein. Shown at right is Andy Warhol's Dollar Sign estimated at $1,950,000 - $2,925,000 at Christie's London Post War and Contemporary Art Evening Auction on February 11.

Two of the biggest names in the art boom – which ended unceremoniously over the summer of 2008 – have seen their works fall by half this year. Pieces by Damien Hirst and Jeff Koons, the hottest works under the gavel through the beginning of 2008, could take as much as 10 years for prices to recover.

With the art market in turmoil this year, the contemporary segment suffered, and art collectors steered clear of some of the riskier artists on the market, which included Koons and Hirst. Instead, they turned to Art Deco furniture and pieces from the Old Masters and China, which appeared prominently among the top 10 auction performers this year.

Hirst and Koons still outperformed the contemporary art sector, which fell 75percent overall, thanks in large part to the auction houses' abandoning of guaranteed minimum prices.

According to Artprice, the art auction market surged by a factor of 10 from 2003 to 2008, with its price index for works by Hirst up 996 percent for the 10-year period ending in September 2008, with his "Beautiful Inside My Head Forever" event.

So, now may be the time to snatch up Hirst and Koons. It may take a decade for these artists to see their prices recover, but they did pretty well over the past 10 years.

The art market was already in decline when the global financial system was sent into mayhem in September 2008, but the financial nightmare accelerated the drop. This past year has been pretty miserable for artists, galleries, dealers and collectors (who have seen their buying power dry up), but that doesn't mean there hasn't been anything to celebrate.

Several prominent pieces hit fantastic heights at auction this year. Some of the names will look familiar, including Andy Warhol, Henri Matisse and Alberto Giacometti. Old Masters and Asia are represented as well, as they have generally done best in resisting the forces of the art market recession.

Below, take a look at the top 10 pieces at auction in 2009.

Christie's and Sotheby's aren't being shy with the Old Masters. Pieces by Rembrandt, Raphael and Van Dyck are being offered at hefty prices, some records, that could bring in up to $133 million. If this happens, art collectors will have doubled last year's result ... and cast a strong vote in favor of an art market recovery.

The Christie's sale on Tuesday will include a portrait by Rembrandt and a sketch by Raphael. They are being estimated at 18 million pounds and 12 million pounds, respectively. According to Christie's, these are the highest estimates seen at auction, says Bloomberg News. The Sotheby's sale occurs on Tuesday, featuring a Van Dyck portrait that could fetch as much as 3 million pounds.

Unlike the volatile market for contemporary art, prices for the Old Masters have been relatively stable, as the supply is diminishing and demand is increasing.

According to Johnny van Haeften, an art dealer based in London, told Bloomberg News, "Prices at auction are very strong because there isn't much out there." He continues, "People don't want to sell at the moment. They're saying, 'If I let a painting go, where do I put the money? I'd rather keep it in a work of art.'" He bid unsuccessfully for two still life pieces by 17th century Dutch painter Adriaen Coorte. Both ultimately sold for more than 10 times their high-end presale estimates.

[Photo via Christie's]

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.

One bidder spent more than $146 million this year and dropped a boatload of cash at the Christie's Hong Kong art auction on Monday, pushing prices higher and smashing records. Wang Wei, with her husband, investor Liu Yiqian, ranks 176th among the wealthiest in China, with a net worth of $740 million ... and she wouldn't say how much she's spent on art this year.

Wang waved Paddle 960 aggressively on Monday, sometimes tossing bids up HK$1 million at a time to distance herself from competitors for particular pieces. A few times, she didn't bother lowering her paddle, instead just holding it up until her rivals quit.

At Sotheby's Hong Kong in October, Wang's husband shelled out $11 million for a Qing Dynasty imperial throne, complete with carved dragons, setting a record. And, this month, he payd $25 million for a Ming Dynasty scroll by Wu Bin at Beijing's Poly auction -- it was the most paid for a Chinese painting.

At Monday's Christie's sale, HK$126.7 million in art sold, and the house wouldn't reveal how much of it went to Wang. Speaking for herself, the collector reveals why she made the purchases she did. According to Bloomberg News: "I just bought those for fun."

[Photo courtesy of Christie's]

In London today, $90 million in Russian art is going under the gavel, and the auction houses are hoping that a still robust community of Russian billionaires will come out in force to repatriate their heritage. Both Christie's and Sotheby's are holding auctions on December 1, 2 and 3, with MacDougall's, which specializes in Russian art, also selling on December 2 and 3. Bonhams is conducting one today.

There are some signs that the sales could go well. Sotheby's moved $13.8 million in Russian art at an auction a month ago, topping the $9 million presale estimate. The Russian government is saying the economy should grow next year, after falling 10 percent this year. If recovery is en route, big spending Russians may show up at this week's art auctions.

There's no shortage of Russian art coming on the market this week. In addition to the 540 lots being offered by Sotheby's, at a presale range of 14.8 million pounds to 21.2 million pounds, MacDougall's is selling 460 lots (12.5 million pounds to 17.6 million pounds), including a painting of a topless woman by Zinaida Serebriakova for between 1 million pounds and 1.5 million pounds. Christie's has 578 lots, with a presale estimate of 6.5 million pounds to 9.3 million pounds.

The top lot at Christie's Asian art auctions brought in a record $5.9 million in Hong Kong. A large abstract painting by Chu Teh-Chun, "Vertige Neigeux," surprised bidders and spectators alike, with an unidentified Asian private buyer ultimately winning in front of an audience of 400 people. Overall, the auction brought in $79 million.

Buyers from mainland China pushed prices higher at the Christie's sale, especially with local art collectors picking up artwork as a way to protect their wealth from inflation and a struggling U.S. dollar. Chu, Zao Wou-ki and Fu Baoshi are among the hottest artists on the market right now in Asia. A piece by Baoshi set a record during the day sale, moving for $7.8 million. One by Sanyu nearly tripled its presale estimate. According to Anthony Lin, an art consultant in Hong Kong, contemporary Chinese art is starting to recover.

On the first day of the five-day sale, Christie's also sold more than $5 million in wine.

[Photo courtesy of Christie's]

The Phillips de Pury auction on Thursday night raked in what once would have come from a single painting. Despite parading out pieces by Andy Warhol, Jeff Koons and Richard Prince, the sale was good for a mere $7 million, with individual lots moving for prices in the hundreds of thousands of dollars. Thirty-nine went under the gavel, and eight didn't sell.

The Chelsea auction house lacks the savvy, knowledge and reach of Sotheby's and Christie's, so it had to lean on British art collector Charles Saatchi, who has agreed to complete most of his transactions through Phillips de Pury. In trade, subsidies from the auction house help keep access to Saatchi's gallery free.

Roughly a dozen of the lots came from Saatchi, while the others are said to have been rejected by Sotheby's and Christie's. In general, the pieces were "pretty skimpy," according to Manhattan art dealer Edward Tyler Nahem, who observes that the auction house "did pretty well with what they had."

Japanese artist Yayoi Kusama was the top seller, with her painting "Infinity Nets (T.W.A.)" busting past its high-end presale estimate of $400,000 and settling at $842,500 (including fees). Kusama's performance follows a well-hyped exhibition at the Gagosian Gallery this year.

The Christie's crowd on Tuesday may not have been ready to shell out big bucks for Andy Warhol's "Tunafish Disaster," but the crowd at Sotheby's was more than happy to by a boatload of currency. The top pop artist's "200 One Dollar Bills" found a buyer for a monstrous $43.8 million at the Sotheby's art auction in New York on Wednesday.

Pauline Karpidas, an art collector in London, offered the piece, Bloomberg News reports but wasn't able to verify with the collector herself. It looks like she scored with this one. "200 One Dollar Bills" carried a presale estimate of $8 million to $12 million, which didn't last long.

The piece consists of what its title states: 200 real-sized one dollar bills reproduced in black on grey ... and with a blue replica of the Treasury Department seal. If they were real cash, the sale price was greater by a factor of 219,000.

This wasn't the only success of the evening, and overall, the outcome was fantastic. Only two of the 54 lots failed to find new homes, and the final number, $134.4 million, thrashed the presale estimate of $97.7 million.

Christie's tried in New York with a 1983 piece by Jean-Michel Basquiat and didn't succeed. The auction house may have been too aggressive in estimating the 16-foot piece at $9 million. That's what's tough about the art market right now. There are signs of recovery, and it can be tempting to push for higher prices. Unfortunately, it's easy to get a bit excited. The painting had the highest estimate at the auction. The piece with the second highest presale estimate, a piece by Andy Warhol, met a similar fate.

The Basquiat piece, "Brother Sausage," was offered anonymously by a buyer later revealed by Bloomberg News to be Peter Brant, an art collector based in Connecticut. The piece may be a casualty of his divorce from model Stephanie Seymour. Well, it won't be financing post-marital discord and could remain a contested asset for a while.

Warhol's "Tunafish Disaster" was projected to move for up to $8 million and, like the Basquiat painting, didn't receive any bids. Art dealer Robert Mnuchin of L&M Arts was stuck taking it home.

Yet, some works beat the odds in an auction that raked in $74.2 million, within the presale range of $61.5 million to $88 million. Nonetheless, this was the lowest result we've seen from a Christie's New York contemporary art effort since May 2003 and down 81 percent from the top of the market two and a half years ago.

It looked like to sculptures by Damien Hirst were headed for court. The two pieces, worth an estimated $47.6 million, were part of a broader lawsuit involving Udo Fritz-Hermann Brandhorst, an art collector and heir to the Henkel AG & Co. fortune. Brandhorst's former mistress, Venetia Kapernekas, sued Brandhorst in federal court for the artwork.

Kapernekas, a 49-year-old art dealer, agreed to drop the lawsuit over the weekend in exchange for custody of the daughter she had with Brandhorst, a one-time $100,000 payment, a $500,000 trust for their daughter's education, a loft in Soho (worth around $5 million) to be held in the daughter's name and $640,000 to cover her legal expenses. She'll also get $5,000 a month in child support.

As part of the deal, Kapernekas will be able to sell an Andy Warhol painting she received from Brandhorst. It's a heart-shaped blue and red piece called "Candy Box Open" from 1983. She has chosen Sotheby's in London to handle the sale, and it could go for $40,000. She won't be able to sell another Warhol, "Heart," because it belongs to her daughter.