Catherine Rampell wrote a blog for the New York Times entitled, dismally enough, The Art of Recession. Despite it being a dismal science, Rampell prognosticated on behalf of collectors, pointing to “the failure of a number of large banks may put their corporate art collections back on the market on the cheap” as an example of cheaper prices to come. Makes things a little insecure for the art investor though, with the prediction that “the market for contemporary art assets may soon plummet.”

On behalf of art as an alternate “passion” investment, The Business Times points to “Proponents of the segment argue that art, being a real asset and devoid of the mind-numbing complexity of derivatives, should retain its sheen as a ‘passion’ investment.” They have an interesting quote from auction house Christie’s president (Asia) Andrew Foster: “Art is a very real and tangible thing. Clients agree that art has inherent value….That doesn’t mean prices don’t fluctuate, but value is agreed upon and inherent, and it springs from cultural and global trends more than trading multiples.” Is that true, though?

Also of note, the article mentions the Mei Moses Fine Art Index. According to which, all art for 2007 rose 20 per cent, a performance only surpassed by some of the annual returns achieved in the art bubble years of 1984 to 1990–more than the 5.5 per cent achieved by the S&P. Yet art, too, “has its boom and bust cycles, as Michael Moses, the creator of the index, told Reuters earlier this year.”

But let’s consider results of some recent big auctions. A headline from the Times on October 20, 2008 is ‘Growing signs of art slump as Freud’s portrait of Bacon fails to fetch £7m’ and the IHT reports ‘At contemporary art sales, market stumbles on.’ These are not chipper reports on the auction front. Christies and Sotheby’s have their big auction in November, so that will prove the true bellwether. Yet buyers in the art sector, like every other, seem to be skittish. Souren Melikian writes for the IHT that “The short message is that there is life left in the contemporary art market at 25 to 30 percent below current ambitions. That is very good in the current circumstances. Auction houses and their consigners had better heed the lesson.”