Hobby Panic in 2009

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Posted By: Matthew Pime

Joe,

My point is that there is a good possibility of a shift in perception in regards to high end tangible assets. Names such as Rembrandt, Warhol and Picasso will always have an inevitable following. Some of those effective 'tastes' will change for two reasons.

1. Classical culture in the arts isn't as appreciated in America as in prior decades. Much like coin collectors were positioned until the State Quarter phenomenon, the art crowd is largely an aging population. Unfortunately, fine art is not the media superstar it once was in prior decades. The multimedia experience of the 20th century further enhances future generations of high end collectors because they can better relate to what they have experienced firsthand. In the US, nostalgia is likely to play a increasing role in price, rather than obselete prestige.

That being said, I have dipped into the art market with Andy Warhol and Keith Haring. Their pieces sell well because of name recognition and the 'pop' nostalgia connected within. It's not the big names that will be affected- millions of dollars go into what I'd call 'fringe' art that is acquired for big numbers and has no 'name' behind it. Sure...you can like a piece or two...but to speculate on unknowns for big pricing is likely to fade in America. I believe acquired taste will almost completely be European driven in the coming decades.

Why...because people buy what they know, and what they like.

In regards to fantasy- I don't mean to be a 'party pooper', but its pretty ugly out there. The main problem is that the time value of money is at a standstill. We're also likely to see massive inflation as part of that recovery. I've been buying TIPS (Treasury Inflation Protected Bonds) as a hedge because of this assumption.

I do agree with Bruce in most cases. 'Depression' doesn't necessarily have to mean FDR policy and the 'Grapes of Wrath.' There are too many systems in place to have our cities overrun by massive homelessness and tumbleweeds flying through the streets. Things are tough, and most of it is by circumstance. He is right, because some will have to part with their most prized possessions to meet financial margin calls on their stock, real estate and business livelihoods.

...and this crazy situation has screwed many of those who suppossedly had 'recession proof businesses'

Think about this...oil has gone from $70 to $150 and back to $37 in just one year. That effects everyone. Airlines, municipalities and businesses abound locked in commodity contracts near the peaks because they were afraid it would go higher. Again, another economy killer because it all trickles down.

There are some that will be completely unaffected and may 'jump' economic classes simply by not being 'invested.' This could be the new wealth spectrum, and completely unlike previous 'rich' folk in prior generations. My guess is that their investments will be more simple than ever before.

MP