Hyperbolic Times for Art, Excess, & Foreclosures

It was the best and worst time.  There are a couple things that are surreal in times of change, you have the hyper excesses bursting almost apart and you see the worry, more importantly the early signs of panic, as the reality of how devastating this down cycle will be creeping in at the edges. 

On the excess front, last year in May 2007, a 1950 painting by Mark Rothko sold for $72.8 million, the highest price ever paid for a work at a contemporary art auction. A day later on May 16, 2007, a 1963 silkscreen on canvas by Andy Warhol went for $71.7 million.  The year is expected to surpass those prices for dead artists.

If we go back to 1989 to the beginning of the end of that spectacular 80s excess, Picasso's Au Lapin Agile sold for $40.7 million landing it on the Time cover.  If that's an indicator, we're getting frothy, but not quite over the top.  Powersuits, Dynasty, perms, and shoulder pads were on their way out to be replaced with the more subdued decade of the 90s. 

In 2008, many of the newly minted billionaires and millionaires are from emerging markets, notably the former Soviet Union, to add to the riches in the US from the commodities boom...and up until the credit crisis unfolded last August, Wall Street firms were giving out record bonuses.

On the worst of times front.  There are increasing stories of foreclosures sinking whole neighborhoods, stories on a personal level of people of people you know, their neighbors or coworkers, and it becomes people you know - trying to pay for two houses and an apartment building and not really making it.  They're drowning, but they don't admit it to themselves.  It's not only the mortgages, but also the property taxes and rental property taxes.  Now going out to eat seems exorbitant on top of having to spend money on gas to get to a restaurant. 

Image from NYT

Both signify a kind of unsustainable growth story that will get reeled back in.  When things come too easily for such a mass number of people, one has to wonder if it really is a utopia realized or if we're at an end-run before things reset.