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BREAKING NEWS
August 31, 2007
Hirst's Glittering Price Tag Loses None of Its Shine
A diamond-encrusted skull by Damien Hirst has been sold to an unnamed investment group for the asking price of £50m nearly three months after it first went on show.

For the Love of God is a platinum cast of the skull of a 35-year-old, 18th-century man, complete with the original teeth, covered with 8,601 near-flawless pave-set diamonds, including a large pink diamond worth more than £4m in the centre of its forehead.
When it was unveiled at the White Cube gallery in London on 3 June, displayed like a relic in a casket, the skull caused a sensation, both for its daring showmanship and its staggering price tag.

The art magazine Apollo said of the piece: "One lesson it rubs in is that the ideas of an artist have a price far higher than mere gems," while the Art Review commented: "The diamond-studded death's head could be a fashion statement, a bejewelled accessory or a dazzling effigy to all things chav. Instead it's high art... With the skull, Hirst has gone too far."

A spokeswoman for Hirst said yesterday: "The skull has been sold to an investment group for $100m," she said. "Damien Hirst has retained a percentage of the work in order to oversee a global exhibition."

Some critics had suggested that the high price of the skull, said to be the world's most expensive piece of contemporary art, had meant that finding a buyer was proving problematic. The Art Newspaper suggested that negotiations over the price of the skull were "protracted" and that at one point a discount was considered. But the artist's business manager Frank Dunphy categorically denied any price drop, while the White Cube's spokeswoman insisted: "The work has always been on sale for £50m." Mr Dunphy said the buyers would pay in cash, but had not received any discount.
The Independent


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Bejewelled Skull Sets Stage for Re-Ordering of Art, Finance
Category: ART
By: Pete Kendall, August 31, 2007

 In a bear market, tastes crash from the “alive” phase of the peak to an emphasis on death at the bottom. The preference for the inexpressive over “joy and hilarity” indicates that the re-ordering of the art world is underway along with the re-ordering of financial values.
The Elliott Wave Financial Forecast, July 2006

One of the things we talked about in today’s issue of The Elliott Wave Financial Forecast is the importance of measuring the results of a forecast against the context in which it was made. As far as we know, for instance, no one was paying millions for skull art when EWFF issued the comment above a little over a year ago. In fact, Hirst's mixture of "alive phase" diamonds with a skull is such a canny blending of the transition from a rising to a falling mood that we checked our records to see if he is a subscriber (at least not under his own name). The full quote from July 2006 is available in the Additional References below. For a picture of the skull see the June 4 entry here.

One interesting aspect is the continuation of the “flight from quality,” from Van Gogh at the peak in 1987 to the less well know Gustav Klimt in 2006 and finally to a living artist, Damien Hirst, in 2007. Nothing against Hirst, he’s very avant-garde. But there’s a difference between being a trendsetter and a genius – and when it comes to something as subjective as art it can take generations for this difference to be recognized. This is part of what we were driving at with our discussion of July 2006. Traditionally the very highest prices have gone to established works, i.e. those of long dead artists, because it takes at least the life of the artist to establish that a given piece supersedes the conventions of a given era.

Another factor is what studies call the “death effect,” which is a tendency for the prices of artists works to rise near their deaths. Some say it’s a nostalgia effect while others say it is a rational response to the fixation of supply. In any case, it’s appropriate that artists would only be recognized as the world’s greatest artists, with prices commensurate to those of the world’s greatest masterpieces, at the end of a huge, long advance in social mood. In addition to Hirst, living artists Jasper Johns, Bruce Nauman, Lucian Freud, Robert Rauschenberg, Cy Twombly, Jeff Koons and Gerhard Richter all now earn sums that equate to the great masters for single works.

If he gets the $100 million price for his latest work, Hirst will get the highest price ever for piece of art by a living artist. The irony of cheating the “death effect” with a skull probably isn’t lost on him. But the irony of having to pay part of the total probably is. As the critics suggest, it surely means “finding a buyer was proving problematic.” Hirst’s representatives say the sale will be completed, but, as EWFF has noted, this turn has a light switch quality to it. Don't be surprised to see if sale becomes a victim of the trend change foreshadowed by Hirst’s diamond covered symbol of death.

Of course, there is one problem with forecast offered above. Judging by a clear net gain in the major stock averages since July 2006, it’s certainly fair to say that there’s been no “re-ordering of financial values.” A close look at some unconventional market indicators suggests, however, that the ‘re-ordering” is, in fact, in place. It's been unfolding for much longer than most people realize. For an illustration of this “process,” check out the coverage of the gold/silver ratio in this months issue of The Elliott Wave Financial Forecast. It's on page 6.

Additional References
July 2006, EWFF
A Picture of Social Mood Peak
Another sign of an approaching trend change in art and art prices is the “flight from quality.” Notice the difference between the stature of the artist at the beginning of the art boom in 1987 when Van Gogh’s work was the object of the bidding frenzy and this year’s recipient, Gustav Klimt. Compared to the other artists shown on our chart, Klimt is relatively unknown. According to The Wave Principle of Human Social Behavior, tastes in art progress from traditional in a healthy bull market and colorful and “alive” at a peak to “anarchic – anything goes” in a bear and deliberately ugly at a bottom. The frenzy for “Adele Bloch-Bauer” is a subtle sign of the move away from traditional tastes. A not-so-subtle sign of bear market tastes is “Exhibit 1201” at London’s Royal Academy of arts. It is the work of an artist who entered a sculpture into a field of 9,000 applicants for exhibition in the Royal Academy. His sculpture was rejected, but the stand he had put it on won entry to the Royal Academy. In the judgment of The Wall Street Journal, the actual sculpture of a laughing face, “One Day Closer to Paradise,” lost because of its “emotional content.” The “laughing head is not only fatally well rendered but exudes a sense of joy and hilarity, and the overtly evocative is déclassé. How much more sophisticated a stoic square of slate [is].” In a bear market, tastes crash from the “alive” phase of the peak to an emphasis on death at the bottom. The judges’ preference for the inexpressive over “joy and hilarity” indicates that the re-ordering of the art world is underway along with the re-ordering of financial values.
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