The short answer is, seemingly, everything. Certainly witness the phenomenal success of Picasso’s opus, just knocked down by Christie’s for $106.5 million to an as yet unknown buyer. While the Picasso has the distinction of now being the most expensive work of art yet sold at auction, the buyer has the distinction of paying the most for any work of art purchased at auction.
Combining the Picasso auction record with uncertainty in European sovereign debt, exacerbated now by the free for all following the British elections, there seems a profound disjunct that is as yet impossible to get one’s head around. Except that the records set- not only for Picasso but also for Matisse and Braque- were for artists and works well established in the canon. Buyers have turned their backs on contemporary art, except at the impulse buy level, making, it appears, defensive investments in fine art. English antiques cannot be far behind.
And why not? In uncertain markets, the traditional wisdom is to maintain liquidity so a significant investment in an illiquid asset might not make much sense. But with sovereign debt run amuck amongst nearly all countries of the world, in whose currency would one want to park a large amount of cash?