Analyst upgrades:

• FBR Capital upgraded Overseas Shipholding (NYSE: OSG) to Outperform from Market Perform following the Q3 results as it believes the worst quarters are behind the company. The firm raised its target on shares to $48 from $35.
• Deutsche Bank upgraded Corporate Executive Board (NASDAQ: EXBD) to Hold from Sell following the Q3 results to reflect the company's lower costs. The firm raised its target on shares to $22 from $18.
• RBC Capital upgraded Enbridge (NYSE: EEQ) to Sector Perform from Underperform after the company's partnership produced significantly higher than expected DCF. In addition, the firm raised its price target by $5 per unit to $46 to reflect an improved distribution schedule and more favorable debt leverage.
• Royal Dutch Shell (NYSE: RDS.A) was upgraded to Neutral from Underperform at Credit Suisse.
• BioForm Medical (NASDAQ: BFRM) was upgraded to Overweight from Neutral at Piper Jaffray.
• Alliance Data Systems (NYSE: ADS) was upgraded to Buy from Neutral at SunTrust.

Damien Hirst has gotten to the point where the sound of his own voice isn't good enough – now he needs a record of his thoughts for the ages. He and fellow artist Richard Prince (who actually has some talent) discuss the pains of the art market in Requiem II, which is scheduled to be published by Other Criteria this fall. Of course, Hirst is one of the publishing house's founders, making one wonder if this is the only most effective way for him to get a book published.

If a recent interview with ArtNews is any indication, Requiem II will contain the insights you'd come to expect from an artist of Hirst's caliber. My personal favorite: "Yeah, we ain't gonna sell as much art, art shows are gonna get better now the focus shifts away from money."

Brilliant.

The era of the 'frugal consumer' is upon us, and it's extending all the way up the social/economic ladder.

• Picasso painting fails to sell – There was no buyer earlier this week for a 1971 Picasso painting, "Woman with Hat," estimated by Sotheby's (NYSE: BID) auction house to go at bid for $16-24 million. Further, an Alberto Giacometti 1951 bronze sculpture of a cat, also with a $16-24 million estimate, was withdrawn. Sotheby's said each fell below their reserve prices, The Associated Press reported.

There's a saying among the specialists and traders who do most of the living and breathing at the New York Stock Exchange that goes: "When the little guys are cutting back, that's an inconvenience. But when the big guys start cutting back, that's a problem."

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.

In the wake of the collapse and bankruptcy of Lehman Br Holdings (OTC: LEHMQ), chairman and CEO Dick Fuld and his wife Kathy have begun selling off their prized collection of modern art.

The couple has been consigning parts of their collection to Christie's, the renowned auction house. 16 post-war drawings have been consigned with a pre-sale estimate of $15-$20 million. At its peak, Fuld's stake in Lehman was worth just under $1 billion, but those shares are now virtually worthless.

What does all this have to do with Lehman, the proposed bailout of the banking industry, and the economy? Nothing really. But at least it's now clear that the insiders will be suffering alongside taxpayers and foreclosed homeowners: Fuld has to part with $15 million worth of post-war drawings!

Who's going to buy that art, you ask? Perhaps hedge fund manager David Einhorn, who was one of the few people calling Lehman's bluff a few months ago, will drop a few bucks to redecorate his office.

Most investors/readers know about the stream of U.S. economic statistics originating from the U.S. Commerce and Labor Departments, and from other Washington agencies, that form the basis for 'taking the pulse' of the economy.

But more experienced investors know about that group of 'unofficial statistics' that fill-in the economic landscape and frequently provide clues regarding future economic activity that the others do not. In this category, you'll find mall traffic levels, those infamous corrugated box orders, and package deliveries, as metrics of significance.

And another metric worth keeping an eye on, in the interpretation of stock exchange specialists? The demand and prices for fine art.

Fine art, antiques, and collectibles are the aesthetic knick-knacks of the gentry. Or as one New York Stock Exchange (NYSE: NYX) specialist put it, "A lot of the other metrics measure how the little guy is doing. Art demand measures how the big guys are doing."

The significance? "When the little guy is pulling back, that's a concern. But when the big guys are pulling back, now that's a problem," he said.

Art demand slowdown telegraphing global slump?

Moreover, a problem may be surfacing with the 'big guys.' Sotheby's, the world's largest, publicly-traded auction house has dropped about 20% in the past week on concern the global art market may be slowing, Bloomberg News reported. Sotheby's (NYSE: BID) shares declined 39 cents to $22.64 in Friday afternoon trading.

Sotheby's contemporary art auction on Wednesday was not a confidence builder. The sale totaled $10.4 million, well below the $14 million high estimate, will only 69% of lots selling, Bloomberg News reported. In comparison, during a similar sale a year ago, 81% of lots were purchased.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Sotheby's.

Sotheby's (NYSE: BID) is the world's second-largest auctioneer of fine arts, antiques and collectibles, offering property in numerous collecting categories, including paintings, jewelry, decorative arts, and books.

Analysts expect Sotheby's to register strong revenue growth in 2008, with an improving financial position, and modest debt. Furthermore, costs remain reasonable. The Reuters F2008/F2009 EPS consensus estimates for the company are $2.82/$3.14.

Yesterday I wrote about the popularity of dumpster diving in Germany, and also told you alll a little about my less-than-glorious foray into the world of snagging other people's cast-offs.

Today's New York Times reports on one woman's extremely lucrative trash-picking adventure. Elizabeth Gibson was on her way to get coffee when she pulled a 38x51 inch painting out of someone else's trash. It turned out to be a piece by Rufino Tamayo that had been stolen 20 years ago, valued at about $1 million.

Amazingly, the widow of the man who purchased the painting has elected to put it up for sale and given Ms. Gibson a reward of just $15 thousand. Sotheby's, the auction house that will be selling the painting, is also paying her a small finder's fee.

While $15 thousand is hardly chump change, it looks like Gibson will mostly be gaining a great story to tell her grandchildren. You'd think the widow could have been more generous, given that the painting was 20 minutes away from landing at the dump.

With the news this morning that Madonna is potentially leaving Warner Music Group (NYSE: WMG) for tour promoter Live Nation (NYSE: LYV), the future of the record industry is again being questioned. In the wake of English band Radiohead's self-release online of its seventh album, any move away from the record industry is demanding notice. A move to a tour promoter with album and merchandise opportunities only gives artists more control over their product, as opposed to making numerous deals with separate entities.

The Wall Street Journal's article cites that "a range of players in the music business -- labels, concert promoters and even managers and ticketing companies -- are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise." That very sentiment spells doom for the record industry as the "newer" entities that enter the album-making business make offers that are often better than the deals the record labels offer.

The possibility of Madonna moving from Warner Music is only the most recent in a long line this year of successful artists moving from the big labels, but so far the question has revolved around embracing new technologies like the digital market. Paul McCartney shook up everything back in March when he moved from the Terra Firma-held EMI to Starbucks' (NASDAQ: SBUX) Hear Music, seizing on a market that had primarily been used for selling compilation CDs. McCartney's Memory Almost Full sold extremely well and catapulted him into the digital world. Radiohead's In Rainbows is this year's other strong case, though exact sales numbers are not available yet (however, the album's download site did get overloaded yesterday).

But the problems that face label groups like Warner and EMI are not limited to those companies. The entire business model for the music industry is being redrawn and recreated, but not by the labels. As the cases of Madonna, McCartney, and Radiohead illustrate, the artist is taking control of an industry that has long abused its power.

According to The Wall Street Journal, industry observers are predicting that the recent explosive growth in the art market could be reversing.

The Journal reports: "The sheer volume of works planned for sale is fueling the nervous buzz. Christie's has estimated the works it will have on the block at its major London sales in October at $154 million -- compared with the $83 million it made at those sales last year and $33 million in 2005. Sotheby's is selling 387 works at its London auctions next month, compared with 254 last year and 206 the year before."

Subprime woes and reduced Wall Street bonuses may have reverberations in the art market. Last week I wrote that hedge fund honchos are getting cheap -- no longer shelling out for the pricey real estate like they once did.

It looks like the art market could get very weak. The combination of hedge fund/private equity bosses becoming suddenly tight-fisted, and the potential for a supply glut could spell trouble.

But so far, the stock market doesn't appear to be worried. Shares of Sotheby's (NYSE: BID) are pretty close to an all-time high, but have exhibited great volatility during past periods of economic weakness. After reaching into the $40s in 1999, shares of the auctioneer sank into the single digits in 2002, perhaps aided by a price-fixing scandal.

If you haven't read or seen anything about the album cover the English band Hard-Fi created for their most recent album, you might be interested simply for the novelty of the approach. Once Upon a Time in the West was released last week (next week in the U.S.) with the band's name, the album title and the words "No Cover Art." larger than both as the cover image (or non-image).

The band has stated that they wished to "break the rules" of an increasingly digital market where album covers did not matter by simply not having any artwork. The accompanying artwork for the first single from the album tells the listener that an "expensive black and white photo of band" is not available in a more overt statement about the decline in importance for artwork to accompany an album. The band also told NME that "it gets harder to do something really interesting because of the size of CDs" and that they have been told that this move makes the album "the white album" for this generation. (8/18/2007, p.21) Of course, when the "white album" was released in 1968 it hardly mattered that the sleeve was white as much as it mattered that The Beatles were putting out a new album.

On the whole, the scheme seems like a fairly interesting marketing campaign. Reports indicate that Warner Music Group (NYSE: WMG) label executives were against the move, which has sparked harsh criticism from fans on the band's message boards. Despite these backlash, the lack of artwork and surrounding media coverage brought this potential listener to their website and clips of their songs which seems a successful ploy to bring in new listeners. It may only be a novelty bid in a saturated market but "no cover art" may just succeed and allow the band to reinsert the importance of music in selling music in the record industry.

The Financial Times has recently covered two different, unconventional "investments": art and wine. While I've definitely heard a lot about these two segments of the economy, I never really considered them to be an investment. I wonder how much hedge fund managers are contributing to this boom because I constantly hear of traders like Steve Cohen making huge art purchases or adding to their extensive wine cellars.

While art prices can move up and down based on their perceptions of value, one art collector was quoted as saying, "When I analyze a stock, I look at future income stream, how it is priced in relation to its competitors and the quality of management, and other criteria that can be measured quantitatively. The sole measure of an artwork is the cultural perception of value attributed to it. That is not something you can make any reasonable prediction about in relation to its future value." This is a very valid argument, but that doesn't mean there isn't an investment opportunity as many asset classes outside of stocks and bonds don't have true income streams -- think currencies, commodities, etc., yet macro funds have been able to extract profits from these assets nonetheless.

According to the article on wine, the index of investable wines is up 42% this year moving it to its highest level since its inception in 2000. As I said before, one must wonder how much of this move is new money quickly and rapidly building up their wine cellars, shocking the available supply.

Ten years ago, hedge funds and private equity funds were considered unconventional, but today they've become mainstay "alternative investments." Is it possible that wine and art will be mainstay investment opportunities several years from now?

MurderAuction.com is easily one of the creepiest websites I have ever visited. The site is a haven for collectors of "murderabilia" -- mementos related to the cases of famous criminals, including prison artwork like a sketch of Osama Bin Laden by Washington DC sniper Lee Boyd Malvo and the psychiatric evaluation of serial killer Ed Gein.

It's difficult for me, and probably most of our readers, to understand why anyone would want to own this stuff. Texas Senator John Cornyn has had enough, and has introduced legislation to put an end to this cottage industry. His law would make it illegal for state and federal prisoners to mail such items for the purpose of interstate commerce.

What's interesting is that prisoners are generally not allowed to run businesses behind bars anyway, and they generally don't profit from the sale of their artwork on sites like MurderAuction. Some inmates will send their work to followers who send them "fan mail" and then the work turns up online. But since the inmates aren't profiting and, in many cases aren't aware of the market for their work, it's hard to see how it qualifies as interstate commerce.

It's hard for me to understand why the government should play a role in this. It seems like a freedom of expression issue, and I don't see the point of using government resources to stop collectors from trading murderabilia online. If the prisoner if profiting, that's illegal anyway.

Of course, sites like eBay (NASDAQ: EBAY) should, and do, ban the listing of murderabilia on their sites. But why should Uncle Sam stop collectors from trading artwork?

The practice of architecture is more and more about sustainability every day. Sustainability is in vogue in every industry. I have been watching the dialog about yet another new dollar coin with mixed reactions. Since I am a designer as well as an investor I could not resist the opportunity to create something new. Once again the government has missed the boat. The new dollar should be made out of recycled material.

I think there should be a hard cardboard center with presidents' images and they should make it in cool colors. Then there should be a one millimeter outer ring of recycled metal that is the same from coin to coin and protects the cardboard core. This solution would be less expensive to make, lighter in weight, a little larger to distinguish from other coins, visually more interesting, and environmentally friendly.

Now if I can just think of a way to make the dollar sustainable from a value standpoint. That's much harder as we all know. But, I will let you know if I come up with anything. In the mean time maybe I'll mock-up my coin design and submit them to the government for review. And if they don't like the idea, then I will make them anyway and sell them as art. Then each will be worth more than a dollar! Hey maybe I'm on to something here?

Check out my other posts for BloggingStocks here.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.

After a long walk on the Venice Beach boardwalk (CA) yesterday I may have gotten notice of things to come. Speaking to several artists on the beach, I learned that they are having a tough summer. Business is noticeably slower this summer than last. They speculate that fuel prices and fewer people wanting to fly has reduced tourism and their customer base.

I have no way of knowing if there is a direct correlation but I can report that the boardwalk was packed and parking was hard to find. Based on my observations, it does not seem like a viable explanation. How could the beach be as crowded as ever and business be slower?

The answer is simple, although unscientific: Consumer priorities and discretionary spending have been altered. The number of people visiting the boardwalk may not be appreciably different. People still love the beach, the sites, the sounds and the people-watching. However, after spending more on gas to get there, ($3.15 to $3.45 per gallon) and paying more for parking ($5 if you walk a distance, to $15) they have less in their pockets. They buy hot dogs, pizza, ice cream, beer, and t-shirts. They have less money to spend on art, jewelery, and novelties.

Why Venice Beach as an indicator?