Sotheby's auction house has abruptly withdrawn a Picasso Cubist painting that was set to be auctioned on November 3, The New York Times reported Monday.
This, as CNN's Larry King would say, is not good news.
1909 work is withdrawn
The painting, "Arlequin" (1909), was estimated at more than $30 million, and was one of the most expensive works in the fall art season. David Norman, a co-chairman of Sotheby's Impressionist and modern art department worldwide, told The Times the painting was withdrawn "for private reasons." Sotheby's (NYSE: BID) shares rose 20 cents to $7.85 in mid-day Tuesday trading.
Stock Analyst C. Leonard Bauer, who as an avocation studies and collects European and American art and frequently attends auctions, said Sotheby's decision to withdraw the Picasso work is a sign of the times.
"They did the prudent thing. There is no way in this financial and economic climate the painting would have realized $30 million. Who knows how low the price could have gone? But it wouldn't have been pleasant," Bauer said. "The decision to withdraw shows that the economic slowdown is touching every area of society, including the very high-end because luxury homes and high-end art are seeing declines."
Further, some economists also argue that high-end purchasing trends provide clues as to how key business leaders feel about the economy. Many of these high-end purchases are also responsible for decisions to add employees, expand operations, undertake business partnerships, etc. Hence, periods when high-end art and home prices are rising are deemed bullish; price declines, bearish.
Economic Analysis: Auctions, of course, will continue, but the withdrawal of a key work -- and a Picasso work -- demonstrates that belt-tightening is occurring everywhere. The view from here argues that art is a barometer of confidence at the high-end, where key economic decisions are made, and art price trends provide one read on the mood of decision makers.
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