Advertising Controversy

Controversy arose in Romania when a firm was reportedly paid 900,000 euros to create a unique logo. It then presented a design featuring a graphic allegedly sourced from an internet image bank.

Anna Berezovskaya

Anna Berezovskaya, is a Russian painter from a small town 60km north of Moscow called Jakhroma. Since 8 yrs ago, she's had been having sold-out shows. And she's now only 26! A painting costs between $30,000 and $150,000 - although eight years ago, it was just $500. A look at her paintings one would understand why.  The images of Berezovskaya's  paintings are beautiful with whimsical touches, very imaginative & often quite fun.

 Berezovskaya admits that : "I find a lot of contemporary art today rather ugly. A lot of it doesn't speak to me." I really like that honesty !!! I share the same views, & I'm sure many do as well.

She commented on major Russian artist Kazimir Malevich who originated the avant-garde Suprematist movement by painting a black square on white canvas in 1915,  "There was a purpose to his art back then because it changed the way people think about what a painting can do. But that kind of art doesn't appeal to me. I want to put emotions, colour and stories into my work. I want my works to be enjoyed."   And that she did, extremely well!

On her series, “Modern Romanticism said .”: It is the view of my own world. I created this fantasyland where all the people there are kings, princes, princesses and knights, and I kind of live in it. I believe deep down in their hearts, everybody wants to be a prince or princess. 

When I was little, my parents were always busy working so I was left home alone all the time. Being an imaginative kid I loved reading fairytales and then started creating my own. When I became a painter, those fantasies naturally reflected in my paintings.

Once they exhibited a painting of mine of a fat woman staring at a lot of delicious food locked in a cage. A woman came to me and told me she would buy that painting to hang on the wall of her daughter’s bedroom to urge her to go to diet! I had never thought my painting could serve such a practical purpose. Haha!."

When ask why does she  think people like her artwork so much?

AB: I guess they like the coloring and composition of my paintings because they look pleasant. Also, a lot of painters nowadays are very keen on making their artwork political. They paint to announce their ideologies. That’s good, but doesn’t work for me. I just love painting beautiful and peaceful scenes. And I think everybody likes pure beauty, serenity and happiness.  

I really like her, her inspiration & also that her paintings are beautiful & do not have “any political ideologies” ….lol…..

Are Art funds good for the Art Market ?

Art funds provide a number of benefits to both the art market and investors.
By raising money from investors who are not currently art collectors, art funds bring new money into the art market which provides additional liquidity to the art market, which helps to both foster continued price appreciation in the market as well as stabilize the market in periods of severe economic downturns.
For individual investors seeking to add art as a part of their investment portfolios, art funds afford such investors with the opportunity to pool their funds with other investors, thereby diversifying their art holdings, and to benefit from the expertise of art fund managers who understand how to operate in what is generally known as a non-transparent, illiquid and unregulated industry.

Are Art Funds getting popular?

The last few years has seen a significant increase in the number of art investment funds that have launched or are in the process of being launched. Much of that growth is due to the increasing recognition by the investment community that
 (i) the art market continues to benefit from significant price appreciation,
(ii) traditional investments in stocks and bonds over the last decade have generated, and many expect will continue to generate, poor investment returns,
(iii) the ownership of art can serve as an inflationary hedge, especially in light of the inflationary monetary policies employed by many countries in response to the 2008 credit crisis and resulting recession,
(iv) art funds can produce returns that have little or no correlation to those of more traditional stock and bond investments thereby helping to diversify the overall risk of an investment portfolio, and
(v) the lack of regulation of the art market provides unique opportunities for arbitrage that can be exploited for the benefit of art fund investors.

Moreover, as most art funds are structured so as to weight art fund managers’ compensation towards performance incentives that involve a significant sharing of the gains earned by the art fund between the fund’s managers and its investors, talented art market professionals are electing in growing numbers to form or work for art funds so as to share in compensatory arrangements that have the potential to greatly exceed those of traditional positions within the art world.

You heard of Art Funds?

Well since we are on  the subject of Art, do you know what are art funds?

They are generally privately offered investment funds dedicated to the generation of returns through the acquisition and disposition of works of art. They are managed by a professional art investment management or advisory firm who receives a management fee and a portion of any returns delivered by the fund.

The underlying characteristics of art investment funds are diverse and vary from fund to fund. While all art funds utilize some form and degree of a traditional “buy and hold” strategy, art funds differ in their aggregate size, duration, investment focus, investment strategies and portfolio restrictions.

The unifying factor of all art investment vehicles is their focus on the art market, which is characterized by a lack of regulatory authority, deficient price discovery mechanisms, the non-transparency of the market and the subjective value and illiquid nature of fine art. Proponents of art investment funds argue that it is these very characteristics that generate the significant arbitrage opportunities within the market that seasoned art professionals can exploit for the benefit of the fund’s investors. Likewise, critics of art investment funds in turn point to such characteristics as denoting art as the riskiest asset class, thereby creating the potential for substantial investment losses among the fund’s investors.

   

Using Art to launder Money

It is often said that Art is a business custom-made for money laundering, with million-dollar sales conducted in secrecy and with virtually no oversight. Transactions are often between a seller listed as ‘private collection’ and the buyer, listed as ‘private collection as well. In any other business, no one would be able to get away with this. As a result there are no hard statistics on the amount of laundered money invested in art. Precisely because of that, can you imagine the amount of money that has been laundered this way? 

Typically, dirty money is laundered through the earnings of a legitimate business e.g. a club, restaurant , retail business. When this money come out the other end, they appear as business profit & look clean & legit. These people don't even mind paying a little tax...lol... 

Most of these industries have checks. Their accounts needs to be audited, invoices are needed & can be checked easily for fraud.  The art market lacks these safeguards. A canvas can be easily rolled up , moved round the world or stash in a closet. Prices can be adjusted easily, by millions of dollars; and the names of buyers and sellers tend to be guarded zealously, leaving authorities clueless on who was involved, where the money came from and whether the price was suspicious. 

But to dealers and their clients, secrecy is a crucial element of the art market’s mystique and practice. Those in the industry even dismissed the idea that using art to launder money was even a problem.  

However governments from many countries are not sitting still. For instance, the European Commission recently passed rules requiring galleries to report anyone who pays for a work with more than 7,500 euros in cash and to file suspicious-transaction reports.  

As of now in New York, victims of the fraud and money laundering scams of the disbarred lawyer M Dreier are still in court fighting over art he bought with some of the $700 million stolen from hedge funds and investors. At the moment 28 works by artists like Matisse, Warhol, Rothko and Damien Hirst are being stored by the federal government.

Tax-Free Zone for Art in China????

Beijing Gehua Cultural Development Group ( BGCDG ), a conglomerate owned by the Beijing municipal government  is trying to create a tax-free zone for companies in the arts-and-entertainment world in Beijing. The Freeport, expected to partially open next year, promises warehouses for art storage, offices for companies involved in everything from luxury goods to software design, and production facilities for film and television.

All services and goods exchanged at the Freeport, which is expected to cost  BGCDG  5 billion yuan (US$802.1 million) to build, will be free of government taxes. Last year, BGCDG  signed up English auction house Sotheby's as a partner to run an art-auction business out of the Freeport.

However not everyone thinks it’s a good idea. Critics feel  it is foolish to think creative industries would sprout the same way low-cost manufacturing did in China's special economic zone, as they are essentially different.

Right now BGCDG  is in negotiations to have the help of Euroasia Investment SA. The facility is modeled on Euroasia's existing Singapore Freeport facility, which is a high-security storage facility for art storage and tax-free trading of high-value collectibles. While a contract has yet to be signed, both said they are confident they will be able to complete a deal soon and have a facility running by 2014.

Euroasia is banking on demand from Chinese collectors who wish to avoid the hefty duties and levies on importing valuable art. Imported works of art are subject to a 34% tax of the purchased value. Many wealthy Chinese collectors who have bought art abroad have smuggled their works or played down the value of the works to customs to lessen the tax blow, but the Chinese government has begun to crack down on the evasion.

Hmmm..... so what does this mean? Well it's very interesting but a little  too chiam for people like us. But for those wealthy Chinese, that's something to look forward to!!!!

Changing art scene in Dubai

Dubai has long since been the a hub for the very rich & famous . Similarly  the Arab art scene has been flourishing and drawing the attention of global curators, critics and collectors.

What accounts for the rise in global popularity of Middle Eastern art? Well I bet , money has something to do with it. The prices of Arab art started to rise in auctions in 2007 - in tandem with Asian art prices - as more Arabs caught the art fever. When works by prominent Arab artists such as Parvis Tanavoli and Mahmoud Said crossed the million dollar mark at auctions, every wealthy Arab sat up and took notice.

Arab art boom

Only  17 years ago, there were only two galleries in Dubai. Posters were popular then, not paintings. Today, that has all changed, galleries are everywhere.  Within a short space of time, the people have started to refine their taste in art. First they started to buy paintings, but now they are buying artworks other than paintings - such as sculptures, installations and video works. They are buying art to show they've arrived. In the Middle East, as in Asia, art has become the latest signifier of wealth, status and refinement.

Well like they said,  when you have enough Ferraris and Lamborghinis, that's when you start collecting art. They are opening to art in a big way, not only are they buying it,  they've also become more open to letting their children become artists- isnt that great?  In fact according to a young artist, art is the "new, hot, glamorous job to be in". I guess the difference is they have money, don’t think there be a ‘struggling’ artist there anytime soon….lol…….

Unlike most cities around the world, Dubai, it seems, wants more artists. Its galleries now represent artists from all over the Arab region, from Egypt to Iran to Oman. Dubai has become the gateway to the art of the Middle East - just as Hong Kong is to China, and Singapore is to Southeast-Asia. What an exciting time !!! Would like to visit  one day!

Art Stage

If you are an art lover, & you've missed all the ads & newspaper reports for some reason, here is a reminder. This premier art fair ART STAGE is here, dont miss it!!!!

Art Stage Singapore will take place in Singapore for four consecutive days: from 24 – 27 January 2013 at Marina Bay Sands, Singapore.

This international trade show is unique as it will bring into lime light the importance and value of contemporary art and cultural works in the recent times. Well known and well established art industry from all over the world will take an active part in this event and will get a scope to have a face to face interaction with the reputed artists and creative workers.

Art Stage Singapore will prove to be beneficial for the art lovers and art enthusiasts as they will get a scope to improve and enhance their knowledge. The improved and enhanced knowledge will help in the advancement of art industry of the contemporary times.

Visitors' Profile

Art Stage Singapore will include visitors like art center, art gallery, financial industry, art collectors, art enthusiasts, art lovers, artists and art industry professionals

Happy new year!!!