Refer to :- Eddy Soetriyono
Global Economic Crisis
There is no doubt that economic factors do influence the art market, but the domino effect of the current global economic crisis leaves anyone without accurate prediction of its extent.
Though centered in North America, the sub-prime mortgage crisis in the United States in July 2007 made its impact felt globally, because loans issued in the real estate sector are linked to the world banking sector.
With the bankruptcy of 158 year-old Lehman Brothers Holding Inc., the fourth largest investment bank in the U.S., on 15 September 2008, the storm has now blown up to immense proportions a. Until recently, Lehman Brothers was known as the “professor of global finance”, it was a quality mainstay of the economic sector. However, today this “quality” has faded, with its shares nothing more than junk; not worth the paper they are printed on. Taken with a series of other cases, including the Enron energy debacle, and the Arthur Anderson bookkeeping scandal, which also sullied the names of the bankers J.P. Morgan and Merrill Lynch, the Lehman Brother bankruptcy has become a symbol of the lack of integrity in the market economy, which was analyzed in detail by 2001 Nobel Prize winner for economics, Joseph Stiglitz, in his books titled Globalization and Its Discontents and The Roaring Nineties: A New History of the World’s Most Prosperous Decade.
There is no denying it; the bankruptcy of Lehman Brothers has made investors question the credibility of other such institutions, not only on Wall Street, but all over the world. All of this has vastly expanded the meaning of “investment risk”; including for those who view art objects as investment items. This bankruptcy is also sure to have a domino impact on corporations globally, meaning the world economy is teetering on the brink of disaster.
Nevertheless, in the midst of the collapse of asset value as a result of the crisis in the United States, funds from the emerging markets (including in Asia) are pouring into this distressed superpower. Billions of investment dollars are going into the bonds being sold by the Bush administration.
As a result, the bankruptcies of Lehman Brothers, Bear Stearns, Fannie Mae, or even Washington Mutual, have not caused America to lose its credibility, neither have they caused investors to fear putting their funds into the United States. America’s country risk ranking has not decreased. People still prefer to hang on to U.S. dollars over any other currency, making the American dollar increasingly strong and invulnerable against the currencies of Asia - the won, rupee, peso, baht, rupiah, ringgit, and the Singapore dollar. Such a situation is certain to trigger inflation, with the result being that the public’s buying power will decrease.
In view of the importance of the above issues, C-ARTS Special Edition focuses Point of View column on the theme Global Economic Crisis and the Asian Art Market, which will seek meaning in this crisis, and, through a series of articles, put together a number of observations and opinions about what steps must be taken by auction houses and galleries in the face of this global economic crisis.
While it particularly relates to the world of art in Indonesia as a measuring rod for art circles in Southeast Asia, C-Arts regular edition (January 2009) will continue the indepth discussion. (#Special Edition)
The visual arts are art forms that create works which are primarily visual in nature, such as ceramics, drawing, painting, sculpture, architecture, printmaking, modern visual arts (photography, video, and filmmaking), design and crafts. These definitions should not be taken too strictly as many artistic disciplines (performing arts, conceptual art, textile arts) involve aspects of the visual arts as well as arts of other types. Also included within the visual arts are the applied arts such as industrial design, graphic design, fashion design, interior design and decorative art.