Short Modern Art, Go Long Old Masters

We leave it to Souren Malikian to tell the story of the down turn in Modern and Contemporary Art. As for us, we will exclaim it to anyone who will listen short Warhol, short Modern Art, and go long cash or the Old Masters.

http://www.iht.com/articles/2008/10/21/arts/melik21.php

But why would we sell our Modern Art? Are we at Creative Destruction such snobs that we can't appreciate a "Green Car Crash," Blue Square # 69, Pink Blob #53 or any other such inanely named works? Well... no, we can enjoy Warhol, Ramos, Murakami, Hirst, Lichtenstein as much as anyone. Though anyone with sense good taste can admit El Greco and Titian they are not.

For those that haven't followed this market, exponents have been made in the mid and late 2000s. Why? Global liquidity, nouveau riche fund managers looking for a way to spend their ill gotten monies. We will borrow a phrase as best we can from Bill Bonner of the Daily Reckoning, hedge fund managers were the only ones with enough money and bad enough taste to buy this junk. So we say sell. SELL it all. The hedgies are going down. Cute as it maybe, the old money doesn't want this junk. It will collapse much as when the Japanese stopped buying Monet's and Van Gogh's over a decade.

And while prices are still strong, dump your Damien Hirst works too. SAC Capital Guru Stevie Cohen whom we have nothing but respect for as a trader, is the owner of Hirst's famed shark in formaldehyde. While we like his trading, obviously his tastes don't match his pay check. Then again Steve can afford it and would likely turn a good profit on the abomination.