Sunday, November 6, 2011

Greek crisis causes panic in art salesroom

by John Dizard

Financial Times

November 6, 2011

This is arguing against interest, as the lawyers say, but it is a mistake for us to be talking, or writing, or investing, as if there is a "Greek crisis", or a "euro area crisis". Crises make journalists feel important, and investors feel a thrill of horror and excitement. By now, though, it should be clear that there isn't a defined beginning, peak, and end to this, as there is with a building fire or conventional war. This is a process, not a crash.

From the point of view of asset prices, the events we think of as "crises" or "bail-outs" are really just noises around a trend line. It's not a good trend line, such as those for medical advances, or auto engine reliability, but there are trades to be done as the crowd rushes from one side of the floor to the other.

You would think the established, serious, etc, European rich would not be subject to panic spasms, but they are. Last week's Impressionist and Modern sales at the New York auction houses were a good illustration.

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