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The Earning Power of Art

Leona Craig Art — Sun, 23 Oct 2011 09:33:19 GMT

Much to my surprise, I continue to hear a lot of talk about art funds and art stocks and their success at attracting investors, especially, here, in China. We even recently wrote a commentary about art funds, brushing off the very idea for anyone serious about investing in art. In the mean time, we keep hearing about more people jumping into the fray. In China, more and more people seem to be getting into the auction business, which has its shady side, and opening art stock funds and exchanges, too. And while sitting through a boring slideshow about why art can make money, I had a change of heart about the usefulness of these new art investment vehicles.

So, let us step back, first, to look at the basics of finance. Finance is the allocation of funds over time under conditions of risk. The central precept of financial theory is that an investment is worth the present value of its expected future cash flows, discounted back to the present at the investor’s required rate of return. Ex post, a return can have come from some kind of cash flow, like dividends, partnership distribution, and interest, and/or from capital gains. The focal point, then, becomes percentage annual return on investment, which is dollar return divided by investment. The other important detail from financial theory is that returns can be further enhanced with leverage and that risk can be diminished with hedging. The object is to get high return on investment, while minimizing risk.   And it is as much an art, as art, itself.

For traditional investments, like stocks, bonds and commodities, the asset backing the security contract is capable of generating cash from sales of a product at a fairly certain price, in the regular economy. A company makes earnings by making and selling computers, and from its net cash flow it can pay interest to bondholders and dividends to stockholders. A stockholder leverages his returns, first, through the use if cheap money provided by bondholders and by leveraging his own equity through margin borrowings against his stock. He can also make a capital gain or loss when he sells his holdings. A buyer of wheat futures can leverage his initial investment with margin borrowing and sell the wheat to a miller on the spot market at delivery time.   A farmer could hedge the sales price of crops he just planted by selling wheat futures due for delivery at harvest time.

Of course, the traditional investment industry has spawned many new products. There are options, real estate investment trusts, securitized mortgages, investment funds, investment advisors, investment analysts, investment consultants, and funds of funds, to name a few. From its primary businesses: collecting brokerage fees, investment banking fees, and income from proprietary trading, all low risk or no risk businesses, the investment community has grown with the growth of its products.

For the most part, those additional products are simply repackaging of the original traditional products; the ultimate packaging among them, over-the-counter derivatives. The idea behind some of the repacking is what is known in behavioral finance as reframing, usually with an obscure frame to show to the potential investor. The broker-dealers, the “sell-side”, are the real professionals. In addition, there is a “buy-side” of the investment business, which includes large institutional investors, funds, and retail investors. Indeed, more and more, over the past quarter century, the buy-side has tried to subsume or move more into the businesses of the sell-side with many examples of disastrous results leading to a number of financial crises. Investment products are created by both the buy side and the sell side, and the buy side has also moved into the fund business, during all of the merging and reshuffling that has gone on kin financial markets over the last few decades.

Art is a fairly simple investment v vehicle. In art, income is mostly in the form of capital gains. The institutional investors are museums, foundations and other large collectors, including corporations. Some of those institutional investors are capable of generating some cash flow from effective rental of art by selling admission to viewings and trading in exhibitions. Many museums do not do much trading in art but, instead, get art loans and gifts from collectors. Art dealers are the central professionals, and auction houses act as wholesale exchanges, mostly as brokers, but not, normally, as dealers.

Art dealers maintain inventories of art. They also do IPO’s of new art and act as market makers for their artists. They also function as brokers for other dealers and collectors. They can get one hundred percent interest-free leverage with no downside risk, in some of the transactions and services that they perform, acting as agents for artists and art sellers. They can earn commissions and can make capital gains. They might also generate income with charges for exhibitions or other types of space rental and from rental of art, itself.

Thus, art can generate capital gains as well as ordinary income. It can also be highly leveraged. Only an art dealer can be short against the box, which can be done, only, by broker-dealers in securities, too. In this situation, the dealer is effectively both long and short the same thing, with a percentage spread locked in. Moreover, dealers offer a display area, both in galleries and online. Art auction houses can take advantage of some, but not all, of the same types of leverage. For example, in the case of guarantees, they are giving a put option to the seller. Normally, dealers do not offer puts.

Art derives its value from quality of workmanship, scarcity, and its use for display or interior decoration. In display in museums, it generates ticket income or rental income from rentals to other museums. However, it seems that the income that many museums generate is insufficient to sustain their display businesses, in that many receive supplemental funding from donations, loans and gifts, and some have even had financial problems or closures, recently.

For interior decorating, some antique fixtures, like beds, chairs and couches, serve functional purposes for interior outfitting. Others, like paintings and sculpture, are purely for visual satisfaction and enjoyment but are, by no means, necessary for nest building.   Marketing and relative valuation give art its additional value. First art is valued relative to other art. Then, art is valued relative to other investment assets and necessary items of living. Thus, the value of much of art is tenuous, and there are examples of artists whose art has been in one day and practically worthless, the next. There has also been much volatility in art prices of even established artists, over the years.

Art funds are basically an attempt to leverage art, not the way that dealers do, but by using other people’s money, not the manager’s.   However, although the fund manager can make fees, the only way that the fund can earn returns for investors is from sales of art. The only way that investors can get money is from distributions of fund proceeds, if any, after sales are made, unless they can sell or cash out their fund investment, which is in most cases restricted. Investors also cannot enjoy the benefits of leverage or hedging.

Moreover, how will sales of their art be effected? The choices for these funds are to sell privately or through auctions or dealers. However,, unlike liquid investments, like stocks, art sales usually cannot be done on demand. Foot leather is required for private sales, sales through dealers can take time, and sales to dealers or through auctions houses are at discounts to retail value. Thus, there are severe limitations on both returns and risk management for investment in art funds. In the end, they provide a source of income for the creator and manager, just like other packaging in the investment business does. They also fit a perceived need or profile, just like other investments designed by the investment community.

Art stock exchanges, with limited numbers of stocks with very limited capitalizations, have popped up in several cities, in China, over the last year. These art securities cover portfolios of one artist’s works. The initial experiences were blowout pricing, resulting in indeterminate closure of trading. An art stock exchange was also opened in France. Certainly, if any depth of these markets were developed, they could be used by collectors, art funds and dealers, alike, if there were, in addition, the ability to sell them short. Then, you could hedge your actual art portfolio. Problems are: the ability to short, liquidity of the markets, limited number of artists and works covered, and mismatches of the underlying art-stock portfolio composition versus works held by an investor.

In summary, we see that art is useful for display, either for earning money from pay-for-view or, simply, for personal enjoyment. However, funds take advantage of neither of these aspects of art but only seek to benefit from eventual realized capital gains. Moreover, like funds of stocks, art funds will stay invested in art, in up markets and in down, and the ability to liquidate, in down markets, is much more limited than, say, it is for stocks. Funds also cannot take advantage of other tactics that are available to professional dealers, like maintaining partial monopolies on art and zero-cost leverage. Although that market does not have enough depth, at this point in its development, the art stock market could be potentially useful for real investors, in art, not as a means of investment but to hedge their real positions in art. Of course, in the absurd limit, if all art were held by funds and securitized, it would no longer have any intrinsic value, at all.

Pan He's sculpture, Tough Times, sells for ¥10 million at auction, in Beijing

Leona Craig Art — Sat, 08 Oct 2011 13:16:04 GMT

A copy of Pan He's sculpture, Tough Times (1956), recently sold for ¥10 million at an auction in Beijing. This was an artist's proof, in the smaller size version, 46 cm x 46 cm x 37 cm, shown below.

You can see the details at http://www.zggjysw.com/ConDetail.aspx?id=14424 .

You can read more about Pan He and this sculpture in previous posts on this blog. You can see the art by Pan He, included in the Leona Craig Art Gallery, on the Pan He Pages.

Leona Craig Art http://www.leonacraig.com

Contact: Craig Mattoli, Guangzhou, China: 86 136 3241 0877
11 Gui Gang Three Road, Dongshan Kou, Yuexiu district, Guangzhou, China 510080
Telephone: 086 020 37625069

Sculptor Chinese Sculptor Pan He: Red on the Outside, Contemporary on the Inside

Leona Craig Art — Sat, 01 Oct 2011 14:04:40 GMT

Guangzhou, September 27, 2011 - There are Chinese artists who poke fun at the Cultural Revolution and call it contemporary art, and there are Chinese artists who have been making contemporary statements with their art since before the Cultural Revolution. There are today’s stylish dissident artists, and there are those who dissented for years, back when it was even more dangerous. There are Chinese artists who have become crowd-pleasing commercial enterprises, and there are those who are more subtle, both in their statements and in their self-promotion. Pan He, who has been making art for sixty years, is one of the latter, and all through those years, his art has had much to say. While it may, at first, appear Red, on the outside, it has been expressing contemporary and, sometimes, even, bold statements, all through the history of the PRC, not retrospectively.

Yes, Pan He did reject the capitalist way of life and moved from Hong Kong to the mainland, in the middle of the twentieth century, but he and his art have not exactly been held back by the communist yolk. Born in the second quarter of the century to an intellectual family with a lawyer as a father, Pan grew up as an elite, and even though he chose to serve the people with his art, he never really was a common man.

The early recognition of his artistic talent reinforced his feelings of elitism, and after traveling and painting, in Europe, as a mere teen, he told his father that the only person who could teach him anything about art was Michelangelo. Indeed, one can see the classical Italian influence in much of his work. In other of his work, we see a style, more like that of Rodin, who was another sculptor who influenced him. And while some of his art may appear patriotic, on the outside, it is pure contemporary social and political commentary, on the inside.

Back in the 1950’s, while Pan was still in his twenties, his art was discovered by Chairman Mao, who chose one of his sculptures, “When I Grow Up,” to represent the New China, and the sculpture toured several countries as an art ambassador. The piece shows two children squatting and sharing their dreams of the future, while a teacher secretly listens in. It was made as a tribute to all the rural teachers, who were educating the masses, but who were looked down upon by the upper classes.

As Pan tells us, he only makes art when he has something to say, but he says it in so subtle a way that his benefactors never see red: they only see Red, while the thinking man sees beyond the Red veil. In fact, to him, that is the real beauty of art, especially, sculpture: that its message can be interpreted in a number of ways.

Indeed, he is a man of contradictions. He moved to the mainland, in rejection of capitalism, to make art for the people. In fact, much of his art has been commissioned by the government for. But the fees that he receives are in the millions, not the common man’s salary. Yet, he gives away many of his artist’s proofs of those sculptures because he thinks that art should not be sold. In truth, that is why he has never done an exhibition, in a gallery, in his seventy year career, until we convinced him to do the current exhibition at ours. He says that his art should be for the public, like his many public sculptures, yet, he has done many indoor museum exhibitions. In the end, he is a man of strong, yet, sometimes, conflicting, opinions, but the opinions that he expresses, through his art, are always uncompromising.

One of his most famous Red pieces, “Tough Times (1956),” was an outright challenge to the government. It is a sculpture of a young boy with a rifle, sitting at the knee of an old man playing a flute: both looking exhausted but cheerful. While, on the outside, it would appear to be a tribute to those who endured the hardships of the revolution, inside, it has meanings on a number of other levels. First, it is a remake of a sculpture that Pan made, as a teenager, in which a young boy is sitting on the floor, looking up, questioningly, to his father, seated on a rock. The meaning of the original piece was that his father, the intellectual lawyer, did not understand him, the young artist. The revised version was made in 1956, in response to the government request for artists to make paintings, glorifying the liberation of Hainan Island by the communists. First, he thought a sculpture would be better than a painting. Then, in researching the event, Pan was privy to secret papers that told the true story of the event, which was very unflattering to the communist party. More pitiable, out of a force of 40,000 sent to Hainan, only 24 survived: the man and boy, in Pan’s sculpture, were two of them. To him, it was incredible that they still remained positive after all that they had witnessed. When Pan completed his sculpture, he sent it, along with a letter, to Beijing, telling what it represented and that he knew the real story. As he awaited a response, he resigned himself to sudden “disappearance.” Surprisingly, one day, the sculpture appeared in hundreds of newspapers, around China, but the story behind it had been changed to a tribute to the Long March.

A decade later, during the Cultural Revolution, he was asked to make a statue of the Chairman, himself, for the Chairman’s hometown, in Hunan, and he made another bold stand. By then, Pan recognized Mao for what he really was: a tyrant. So, when he designed his sculpture, he portrayed him as the young poet idealist, who left Hunan to join the revolution, in Guangdong. While he informed those involved in the project that he wanted to depict the Chairman as the youthful rebel, who eventually would lead the country, his real reason was that he despised what Mao became after 1949. Although his inner dissent remained undiscovered, his outer portrayal was seen by some, as another form of dissent, and for his transgression he was carted off to jail and tortured, daily.

Indeed, although the young idealist artist, who left Hong Kong for the mainland because he thought that communism was preferable to capitalistic pursuits, has not only proved to be a good capitalist but has also had much to say, in his art, although with elegance and subtlety, against the system he embraced. When he gave us a tour of his sculpture garden, in Guangzhou, he was quick to point out that the arrangement begins with his history of modern China, back in the 1800’s, when a few Chinese intellectuals began embracing foreign ideas and sowing the seeds of revolt against the system and the closure of China to the West. Thus, he places his emphasis, not on Chairman Mao or the PRC, but on rejection of a closed, elitist system and the pursuit of new ideas.

He gained world attention when he made a bust of Albert Einstein, in 1978 after Deng Xiao Ping took control of China and once again opened China to the world. Pan’s point was both to encourage the development of science and education, in China, and to let the world know that that was what was taking place in the new, new China. As a matter of fact, he limited his sculpture to a to emphasize the mind, not the man. As a man who recognized the values of Western ideas, as a boy, he has continued to credit them in his art.

He has also been a champion of those who have been wronged by the state, going all the way back to the Ming Dynasty. His sculpture of Yuan Chong Huan shows, not only thoughtfulness, in approach, but also execution in a classical style that truly reminds us of Michelangelo. Yuan was the person who turned back the Manchu incursion, using Western military tactics. Since the Manchu could not defeat him, they used disinformation to topple him, and the emperor had him killed. In Pan’s original sculpture for Yuan’s hometown, Dongguan, Yuan is climbing the mountain, a metaphor for the emperor’s power, the wind sweeping his hair, clothing, and beard, and deferentially handing in his sword. It shows both the folly of leadership. It took another hundred years before Yuan’s name was cleared by the Qing emperor, who was descended from the Manchu who defeated the Ming.

When the government informed Marshal He Long’s widow that they wanted to have a sculpture created for his hometown to honor him, Pan He made it his mission to land the job. He Long was a hero of the communist revolution who was left to die in jail, during Mao’s Cultural Revolution. The Marshal is usually depicted atop his horse. But Pan convinced the widow that the horse should be diminutive, and the final result is a pillar of a man whose body is striated rock, like that, which lines the canyons of He Long’s hometown, and which frames the setting of his large statue. A miniaturized horse reverently nuzzles his master’s leg: Pan says, “See. Even the horse knows he’s a hero.”

In his symbol sculptures for cities, Pan has been both whimsical and serious. Around his “Fisher girl”, which sits on a rock outcropping in the sea, in Zhuhai, there grew a legend. The fisher girl waits, each night, for her lover to sneak over to Zhuhai from its sister city, Macau. Pan’s meaning behind the sculpture is that Chinese cities, like Zhuhai, have people who work very hard, extracting the wealth of China, in this case, pearls, which she is holding over her head, while Beijing takes all the wealth and the credit for their hard work.

In his “Spirit of Shenzhen”, the mainland modern metropolis sister city of Hong Kong, a bull is uprooting a tree stump. It could be taken as the work it took to build the city, but what it really shows is a bull tired already just beginning to pull out all the dead wood, in China In the 1980’s, he was sent to the city of Kelamayi, in Xingjian Province, where the Han had been working an oilfield. They wanted Pan to make a sculptural tribute to those Han oil workers. Then, he came upon a local family, who told him that the government was digging a four hundred mile long river extension to reward the local people. It was then that he decided to create a tribute sculpture, not to the Han, but instead to the local people. His sculpture, “Water Is Coming”, installed in 2002, when the river was completed, shows a Uyghur woman pouring water over her head from an oil worker’s hardhat.

In 1995, the city of Dongguan, a major factory city, had a contest to develop a symbol sculpture it. All of the sculptures submitted by the entrants focused on obvious modern commercial themes, which government found tedious, so, they called upon Pan He. He visited Dongguan, and as he was walking through the mountains, looking down on the city, his thought was that all of this industriousness of the Chinese people had really begun in the First Opium War, when the Chinese destroyed tons of opium at a small village inside the city of Dongguan. Many major battles were also fought in the region. In Pan’s mind, it was at that time that the real change came over the Chinese people to break the bondage of their past and begin to conceive a new future for themselves. Thus, his symbol sculpture simply shows two massive hands breaking an opium pipe in two.

Of course, Pan He did not become an artist just to comment on the state of society but also because he finds it fun to create. Several years ago when he was bed-ridden for months from an illness, his friends brought him clay to play with, and he made about fifty small busts of both men and women, which were then sent to the foundry to be cast in bronze. Even so, the press created a new Pan He myth, calling some of that series the “Eighteen Heroes”, while they were nothing more than Pan He and his friends at play. In more recent series, he did a tribute to the Hakka minority people, who live in the north of Guangdong. To us, these scenes from the lives of the Chinese minorities are one of the more precious forms of modern Chinese social commentary. Although the outside world sees China as looming metropolises, there are still over fifty minority peoples who are living much the same way as they have for hundreds of years, and, soon, they may fade away, as progress takes place in the headline China.

All told, Pan He has been creating thoughtful and contemporary art for over sixty years with major works numbering over 100, and with sixty collected by museums. He is the only Chinese artist to receive a national lifetime achievement award, twice. Not a day goes by when Pan He is not in some sort of news publication, in China, yet he is relatively unknown, in the West.

We are constantly on the lookout for great Chinese art, and we don’t just look for it in the usual places. From what we have discovered, there’s much more to modern Chinese art than what makes the headlines, and we endeavor to bring it to you through Leona Craig Art.

Although, at first blush, one might see Pan He’s art as Red, we see it as contemporary for over sixty years, from the China Republic to the modern PRC.

You can read the shortened version put out in a press release at MMD Newswire

About Leona Craig Art:

Leona Craig Art is a gallery of a different kind of Chinese contemporary art, focusing on fine art with more subtle, more meaningful social commentary from well-known Chinese artists, in modern oil and watercolor painting, sculpture, and more. The curator of the collection is Craig Mattoli, CEO of Red Hill Capital Corporation, who has been involved in both art and professional investment for several decades.

Contact:
Craig Mattoli, Guangzhou, China: 86 136 3241 0877
Website: http://www.leonacraig.com
11 Gui Gang Three Road, Dongshan Kou, Yuexiu district, Guangzhou, China 510080
Telephone: 086 020 37625069

Craig Mattoli of Leona Craig Art Discusses the Chinese Art Market in China Economic Review

Leona Craig Art — Fri, 02 Sep 2011 18:06:38 GMT

We were recently asked to write an article about the Chinese art market for China Economic Review. The final edited version to fit space is in the September 2011 issue. You can read it at
Painting by Numbers.

Pan He & Pan Fen Sculpture Exhibition Opening at Leona Craig Art, Guangzhou, on Guangzhou TV

Leona Craig Art — Sat, 27 Aug 2011 06:44:42 GMT

Well, this week, the two part piece by Guangzhou TV covering the opening of our ongoing sculpture exhibition by Pan He, the Michelangelo of China, and his son, Pan Fen, finally came out.

Although the descriptions and interviews are in Cantonese, except for mine, kit is a great show to watch. I am not just saying that because it's about the gallery. In fact, most of the things that we get done, here, in China, for the gallery, like brochures and books, come out less than good, and I have resigned myself to that fact [until that day when I just send one of the staff to sleep over at the printer's to let them do several trial runs with color and quality adjusted closer to perfect]. However, the editing of the coverage is really a work of art. Zhaijia, the host of the culture show for which this was done, is a foreign Chinese returned to work here, and I attribute the quality of the production to his higher standards.

So, take a look, it is a nice show, and the two parts together last about a half an hour.

Part 1
Part 2
Also, visit the website to see the sculptures by Pan He and Pan Fen, included in the exhibition. As Zhaijia recognized, Pan He exhibitions are usually held at major exhibitions, and it is rare to have so many of his small versions of sculptures, many of them original very limited edition artist's proofs, so rare that even Pan He, himself, is wondering how we were able to acquire them.

Hope you enjoy the show.

Craig Mattoli, Guangzhou, China: 86 136 3241 0877
Website: http://www.leonacraig.com

11 Gui Gang Three Road, Dongshan Kou, Yuexiu district,
Guangzhou, China 510080
广州市越秀区东山口龟岗三马路11号
086 020 37625069

Pan He and Pan Fen Exhibition Opening at Leona Craig Art Gallery, Guangzhou

Leona Craig Art — Tue, 16 Aug 2011 16:53:16 GMT

Our exhibition of sculpture by Pan He, the Michelangelo of China, and his son, Pan Fen, opened this past weekend at Leona Craig Art Gallery, in Guangzhou, China. The opening was a fun event, but the continuing exhibition, which lasts until the end of September is a bigger event. As we have noted, elsewhere, it is the first exhibition at a gallery that Pan He has ever agreed to. In his mind, his art is for the people, as in the public art that he creates. In our mind, people should develop a closer relationship with art, which is what our art inn, in the 1990's, was all about. In a gallery setting, people can be up close, in the warmth of nice all-round decoration, and have a chance to really look at and appreciate art on a more personal level.

Indeed, a TV station from Guangzhou asked if they could come to the opening because they were surprised that Pan He would do an exhibition in such a small intimate setting since he and his sculptures are so "big" and are usually only displayed in exhibitions at major museums. They were also surprised that we would want to handle an artist, who, to them, is a "red" artist, to which we answered that even though many of his topics are about China, its leaders, and its ways, there is often a subtext that is not very "red" at all. His sculpture of Mao for Mao's hometown is Young Mao, when he was idealistic and going off to Guangzhou to join the revolution, but he would never do a sculpture of him post-1949 because of what he ultimately became. His Bull of Shenzhen is pulling out dead wood stumps, and Pan points out that the bull is already tiring because there is so much dead wood to pull out. His Helmsman is a stong figure steering the ship, but the true meaning is which way will that ship finally be steered. In fact, while other Chinese artists, today, do obvious political art or speak out against the government, Pan He has his say, but with much more subtlety and elegance, not caring whether other get the joke or not.

We wanted to share pictures from the exhibition with you, here, so that you might share in our fun.

Ayu Chen, Craig Mattoli, Pan He, and Pan Fen

TV Host interviewing Pan He

TV cameraman filming Pan He and Pan Fen sculptures

Pan He and Pan Fen being interviewed for TV

The staff, ready for the opening

Ayu Chen, Pan Fe, and TV host

Playing with sculpture after the guests left

The girls put "do not touch" sign on their friend

Pan He and other artists lounging upstairs the gallery

Well, if you have time, during the next several weeks, stop by the gallery and spend some personal time with the exhibition.

Hope it was some fun for you too. We all had a blast. You can see all of the sculptures that we have in the exhibition on the Pan He and Pan Fen Pages of the Leona Craig Art website.

Introducing Sculpture by Pan Fen, Son of Pan He, at Leona Craig Art

Leona Craig Art — Wed, 03 Aug 2011 08:56:50 GMT

Leona Craig Art is pleased to announce the inclusion of works by PanFen (Frank Pan), son of the famous Chinese sculptor, Pan He, in our gallery offerings.

Born in 1964 to an already artistic family, Pan Fen eventually attended the Guangzhou Academy of Fine Arts, known for its tradition of fine art teachers and artists, to study sculpture, like his father before him. Initially, after graduation, he went to work for Zhujiang General Enterprises, a real estate company, where he was involved in planning the design and layout of building complexes. For him, it was like sculpture of a larger scale. His hometown, Guangzhou, whose Baiyun Hotel was the largest building, in China at the dawn of the new era of China's openness under Deng Xiao Ping, was a perfect breeding ground for such urbanization sculpture. It has been continuing that tradition of modernization in design, most recently with it's creation of Zhujiang Newtown with an opera house designed by Zaha Hadid, a floating stadium for the 2010 Asia Games, a financial center which will also house a Four Seasons Hotel, a new Museum and beautiful public spaces with green and sculpture. He also helped design the new Guangzhou Modern Museum of Art, which opened in spring 2011, including an outdoor fountain area with some of his sculptures. The Gunagzhou MOMA is locted on Ersha Island, which is also home of the not so old Guangzhou Concert Hall and Guangdong Museum.

In more recent years, he has been concentrating on sculpture, both smaller indoor pieces as well as major outdoor pieces for a number of cities around the country. Indeed, in his more recent concentration on more tradition sculpture in stone and metal, Pan Fen has been called upon to make public sculpture for some of those areas of Guangzhou's current urban renaissance. He was also the first mainland sculptor to win a competition for a piece of stainless steel public art for Hong Kong. He is also in charge of his father, Pan He's, sculpture garden, in Guangzhou, which is still under construction and which will eventually also include an indoor museum of his father's watercolor paintings and some smaller sculpture.

His work is included in an exhibition, August to September, 2011, at Leona Craig Art Gallery, in Guangzhou, which also includes works by his father.

Leona Craig Art is a gallery of a different kind of Chinese contemporary art, focusing on fine art with more subtle social commentary from well-known Chinese artists, in modern oil and watercolor painting, sculpture, Yixing teapot art, and Xiangxiu embroidery art. The curator of the collection is Craig Mattoli, who has been involved in both art and professional investment for several decades. Visit us in the Dongshan Kou district of old Guangzhou or on the web at Leona Craig Art .

Sculptor Pan He Agrees to First Gallery Exhibition in His 70 Year Career

Leona Craig Art — Tue, 02 Aug 2011 18:19:20 GMT

We had accumulated a number of sculptures by Pan He, and from what we had heard, other exhibitions have similar small numbers because small versions of his sculptures are quite rare. Thus, about a month or so ago, we began an exhibition. In the mean time, we have visited with him several times: at our gallery, at his home, and at his new sculpture garden, in Guangzhou. We also met his young son (born in 1964), Pan Fen (Frank Pan), who is a sculptor, in his own right, and is also in charge of limiting cast bronze copies of his fathers work.

In the end, we convinced both He and Fen to contribute, directly, to our exhibition, and on Sunday, August 14, 2011, we will open a sculpture exhibition: Two Generations of Pan Sculpture: Pan He and Pan Fen, at Leona Craig Art Gallery, in Guangzhou China.

You can read our press release at Pan Sculpture Press Release.

You can see sculptures from the two artists at Leona Craig Art at: Pan He Pages and Pan Fen Pages.

More Greed in the China Art Market: The Canton Art Salon 2011

Leona Craig Art — Sat, 16 Jul 2011 06:12:59 GMT

As I have noted, on a number of occasions, in a number of forums [see, for example, for a good overview], many people have become involved in the art market, in China, solely, because they have heard “it can make money.” We have seen people become art dealers, open art auction houses, and develop art securities, who have no idea about art or the market. Indeed, a recent experience provides a good example of the focus on money, in the art market, in China.

Art Canton is an art fair that was recently begun by inexperienced locals. There had been a Canton fair for art, run by the local government, in pernership with some experienced people from France, but the French dropped out, the government sold it to some other inexperienced locals, and it has gone slightly down hill. So, a few of the people who had been invloved with the original art fair began their own: Art Canton. Thus, Canton (Guangzhou, in Guangdong Province, in the new Beijing dialect), now, has two art fairs, both run by people who only see money in the fairs for art.

The people who run the new Art Canton, out of what used to be a site for the Canton Trade Fair, also rent the adjacent build, and they have convinced galleries to take up space, in that old office building, luring them with the carrot that a lot of collectors will stop by the Art Canton office, on one floor, and, then, go to see the galleries, on the other floors, while they’re at it (my sources tell me that that is not quite working out, like it was billed). They even had a mutual friend call me, recently, to say that they wanted to work more closely with me since I am a foreigner and an expert in the business. The friend offered that we might move our gallery there, even at a deep discount price on space. However, by the next day, the friend called again and said that someone else was interested in taking the still available space, so, I should make a decision quickly. So much for wanting to work with me: translation, they were trying to squeeze as much money out of the office building as they could; thought of me; then, forgot about me when they got a cold call on the space.

Not satisfied with earning money from the annual art fair and monthly money from galleries taking space in their office building, they recently divined another way to cash in on art: they would hold an “art salon”, sponsored by them, inviting collectors (at Y200/ticket) to view and, hopefully purchase, art with Art Canton, now, as the seller of art, not just an arranger of an art fair of dealers and artists. My first thought was: but they know nothing about art, art sales, or the artists whose paintings will be in the show. Moreover, it was explained to me that Art Canton would take 30 percent of the prices we set, which is inordinately high, but that objection was ameliorated by the additional information that that initial 30% would give them room to negotiate with people who were interested but wanted to pay less, and any discount to our retail price would come out of that 30 percent.. Still, my staff tried to convince me that, since it costs us nothing beyond the transport of art from the gallery to the office building, which is only a few miles, why not do it. Furthermore, they said that exposure would not hurt, and they made a deal for our people to be at the salon to discuss the art we entered with any potential buyers. So, I said ok, while also pointing out to them my initial impressions.

Then, as the time to deliver the art grew near, a contract was sent to us. In that contract, there was a clause that required our gallery to insure the art, while it was at their salon. Of course, we objected, and we explained to them that when art is consigned by one person to another, it is the receiver who is normally responsible for insurance, and that we would not sign the contract with that clause. The answer that came back was that since they lacked experience in such matters, they did not know (no surprise, there). We were assured that we would get a contract with a changed clause, but when it came, it simply removed the old clause, and there was no reference to insurance, at all, and we, again, said we would not sign. After that, the head of the organization disappeared for several days and was completely incommunicado: she could not be reached by phone or otherwise by her staff, so, we continued to hold off, while I reiterated to the staff their unprofessionalism. I told the staff that we should just forget it, they said that the agent for the salon said that all of our entries had been included in their catalogue for the salon, which, later turned out to be a blatant lie, anyway. Then, finally, as the date for delivery was upon us, we received a call telling us that the head of Art Canton would give us a separate sheet, beyond the contract that, apparently, all the other participants signed, accepting liability for damage or loss.

Several days later, when the event opened, we went to take a look. As we had been told, previously, which, again, I said was not only unprofessional but pure folly, the salon was staffed by volunteers, chummed from the local art schools. Of course, they had no idea about discussing any of the works of art, entered in the salon, but, at least, we did have our own staff peopling the salon in the area of our art. In fact, when I asked if my people would be paid by Art Canton or would get a commission on any sales they made, I was told that none of the volunteers were being paid, which, of course, meant to me that, not only did they have n o experience to staff the event but, also, no motivation to sell anything, either. That, to, later turned out to be a lie, as my staff asked the volunteers how much they were being paid, and they told them the truth. Worse still, the Art Canton Salon staff had put a painting, entered by another dealer, painted by an artist whose work we had also entered, two paintings away from ours, which was priced twenty percent higher than the other dealer’s. An important sculpture that we had entered was initially placed at a good spot, in the center of the exhibit and near a café area, the first day, but when we returned the second day, it had been relegated to a corner, difficult to even find.

Craig Mattoli,
Leona Craig Art, Guangzhou, China

Artist Li Zheng Tian (李正天): Sad Tactics to Cover Poor Practices

Leona Craig Art — Wed, 13 Jul 2011 04:39:29 GMT

Li Zheng Tian was a dissident artist, in the 1960’s, long before it became fashionable. In recent years, he has settled down, has opened his own atelier, and has written his own philosophy about art. Now, there are people trying to market his art. However, there are some problems with all that.

An amusing beginning to our story is that when I recently bought a book about Michelangelo for the gallery and one of my staff read it, she said: “Oh, look, it’s Li Zheng Tian’s philosophy of art.” Indeed, copying things is really at the heart of this commentary. Over the years, Li has made a number of paintings, and, then, has gone on to make many copies of those paintings. Worse still is that many of the copies were not really painted by him but, instead, by his students at the atelier and, then, signed by him. Even one of the artists whose work we have in our gallery spent some time at Li’s atelier, several years ago, and he told us that he even was one of the students who made copies of Li’s work.

Now, some dealers are trying to market Li’s work, and the existence of multiple copies of paintings has, naturally, presented them with problems, in their quest to boost his prices. When that marketing began, several years ago, I heard one option being discussed was buying up all the copies of each painting and destroying all but one. Of course, when there are as many as ten to twenty copies of a work, the use of such a that tactic would mean that the price of the one would have to be ten to twenty times the current price, just to break even. Then, I saw Li, along with one gallery's staff members [even less professional than his students], working on some of his paintings at a particular gallery, trying to make them different than the other copies. Loved seeing them use cans of spray paint on one of the paintings: reminded me of the graffiti I used to see on subway cars in New York City, but, then, isn't graffiti "in", these days, anyway. On another, Li was trying to make it look more like the computer enhanced version of that painting, which had appeared in a magazine, but, frankly, his efforts could not match the skill of the computer. If only he could paint as well as the computer-enhanced version made it appear that he could.

Lately, the tactics have turned both more devious and more heinous. At a recent auction of many of Li’s works by a well-known Taiwanese collector, none of the works sold, even at very low prices. Although we are not certain, that may have to do with one of the new tactics, which is for Li to deny that it is his work. It is but one more sad statement about what art has become for some people in the Chinese art market: it is more about money than art or integrity. It is also the reason that we, at Leona Craig Art, always get artists to personally sign certificates of authenticity for any of the work that we have in the gallery.

The second tactic that is being used in this new marketing effort for Li’s work is less heinous. Instead of the earlier thought of destroying all but one copy, which was economically unfeasible, the marketers have turned to spin. Now, they are saying that the reason that there are so many copies is that Li went on to make copy after copy, as he sought to perfect the paintings. Although that may convince some people, I, personally, see it as a sad attempt to cover the realities. First, I have paintings from other artists who have worked and reworked paintings, over years, until they felt satisfied with them. Even if it were true about Li, it would only say that he was in a rush to sell the art, rather than to create satisfactory works. However, this tactic also sidesteps the real truth, which is that many of those copies, if really perfected, were “perfected” by his student, not by him. Thus, in light of the reality, it says that his students are better artists than he, which is just one more reason that we have chosen, so far, to not become involved with his art.

In the art market, in China, we see countless examples of unethical practices and unprofessionalism. We also get many offers to participate, in the former, but we prefer to deal in art that we like by artists whom we respect, using practices that allow us to sleep soundly at night.

Craig Mattoli: Art Authority - article in July's Tianjin Plus magazine

Leona Craig Art — Sun, 10 Jul 2011 17:14:35 GMT

Tianjin Plus Magazine recently interviewed Craig Mattoli about the art market. The interview can be seen on page 23 of the July 2011 issue, which you can download at Tianjin Plus July 2011.

The New Venues in Art Investment: Will They Make a Difference?

Leona Craig Art — Sat, 04 Jun 2011 12:24:46 GMT

Especially in the new millennia, we have seen a small barrage of new “investment” venues for art. After the British Railroad Pension fund had a moderately successful run in art investment between the mid-1970’s and the end of the century, just under twelve per cent per annum, others contrived to make investment in art available to a target audience, through art investment funds and art stocks. While that might seem unnatural or unnerving to those of us who are interested in art for art’s sake, it is simply standard practice in the investment business. After all, most of the investment business is dedicated to marketing, and designing new investment vehicles that fill certain niches that those in that business perceive as ripe for the eager and uninformed public to be lured into. Thus, in order to discuss these new art investment venues, properly, we need, first, to put them in context with both the art market and the investment market.

As I look back over the three decades that I have been a professional investor, I recall early lessons that I learned after landing a job as a securities analyst on Wall Street. First, most of the investment business is really involved in marketing, with the objective of earning riskless commission or management fee dollars. The second thing that I learned is the low regard in which Wall Street, the “sell side” of securities, holds the “buy side”, fund managers and advisors. Although the buy side has made some progress in enticing some of the talent away from the sell side, over the years, the sell side remains dominant, peopled by the more talented players. Indeed, even as I teach university finance, today, I am amused to see academic “proofs” of market efficiency, i.e., that one cannot “beat the market”, using the returns of fund managers, whom the dominant side of the investment business look down upon for the very same reason.

When the sell side invests, through its proprietary trading businesses, it invests in arbitrage and other ways to take advantage of market inefficiencies. Indeed, the mushrooming growth of so-called hedge funds, over the last several decades was an attempt to take that sell side investment expertise into the realm of the buy side. The hedge fund business, as a result, became cluttered with marginal players and with hedge funds that were hedge funds, in name only. A hedge, after all, means to limit risk, and hedge funds, originally, employed true hedging techniques, in arbitrage businesses where they could earn high returns, especially with the leverage that is allowed for broker dealers on hedged positions. However, as the media and the public became aware of the opportunities offered to professionals, in certain arbitrage markets, funds arose, in response, heralding themselves as hedge funds or funds of absolute return because that is what the ravenous public demanded. In particular, as my original business of merger arbitrage became overrun by an explosion of new funds, many Wall Street firms began to ease out of the business and move into selling advise and recommendations to all of the nouveau hedge funds and retail investors who, through their inexpertise in the business, destroyed returns, pushing them from triple-digits, in the 1980’s, to single-digits, by the end of the century.

Of course, that example is but one of all that have occurred in the reinvention cycles of the investment business since it was originally invented in Italy, in the 1300’s. Professional investors constantly find and take advantage of new inefficient market opportunities, and when the general public finally catches on, the professionals quietly exit and move on to their next find, while the public pushes the market to a froth until it eventually crashes and devastates all of those marginal and Johnny-come-lately players. The psychology of greed and the continued belief in get-rich-quick investment schemes is what leads these lambs to slaughter, time and time, again.

In truth, there are no get rich quick schemes, in investment, other than the occasional spot of luck. What the professional investment business is really about is hard work and barriers to entry, in knowledge or capital. For example, in the merger arbitrage business, in addition to doing a lot of research and legwork on our own, we spent millions of dollars a year to hire lawyers to assist in analyzing and tracking the legal aspects of mergers, especially if they were contested. We had fifty private phone lines to other arbitrage departments and to brokers on the floors of major exchanges. Thus, capital and expertise were both barriers to entry. All of the newcomers and retail customers who thought that they could do the business, on their own, were only fooling themselves, and their inability to have access to the important analytical tools that are necessary to properly do the business resulted in inappropriate price levels and paltry returns.

An even more common example was in stock trading, in general. Through the early 1980’s, in the U.S., brokerage commissions were around 75¢/share. Thus, if a the price of a stock was, say, $10/share, it would cost you $1.50 for a round trip, which means that you would have to make a 15 percent return just to cover your commission costs. Indeed, the barrier to entry was the approximately $1 million that it cost to buy a seat on the New York Stock Exchange (NYSE). However, people figured out a way around that high cost of entry by registering with the National Association of Securities Dealers (NASD) and gaining access to the pennies per share that broker dealers pay for their transactions. Thereafter, people set up discount brokers and, eventually, on-line brokers, who charged pennies per share for commissions without even a phone call to a broker. The result that I saw, in the U.S., in the late 1990’s, and, in China, in the middle of the next decade, was that many people believed that they could trade stocks as well as professionals, and huge run-up’s and crashes, in the stock markets were a result. In the U.S., the market lost 80% on the NASDAQ stock market, in 2001; in China, the loss was around 70 percent of market value, in 2008.

The art markets are inefficient, but their inefficiency is quite different from those that exist in securities and commodities markets. In the latter markets, there are central exchanges, like the NYSE, for buying and selling. Smaller, second tier companies, who cannot qualify to list their securities on major exchanges, might be traded in the over-the-counter (OTC) markets, which are comprised of networks of dealers, each maintaining their own bid and ask prices and inventories of certain securities. In both cases for securities trading, the markets are daily auction markets. In the art markets, auction markets are wholesale inter-dealer markets, while art dealers are retail markets, although dealers also maintain their own interdealer wholesale markets. Thus, there is no direct analogy between art markets and the other traditional investment markets. Moreover, in those other markets, the investment is fungible: one share of IBM stock is the same as any other share; gold is gold. In the art markets, one painting by Monet is not the same as every other painting by Monet. In this situation, there is only one copy or a limited edition, as in the case of Lithographs made and signed by an artist. If a buyer/investor wants a painting, there is only one place to buy it: the specific dealer, auction house, collector, or artist who currently owns it. As a result, the analogy between the art market and the traditional investment markets breaks down, even further. A better analogy between art and investment might be with venture capital or private equity.

Information is the most important thing, in any investment business, and effective price discovery is an important piece of information. Indeed, the continuous daily price-reports on securities contribute to a certain amount of efficiency, in those markets. A similar price discovery mechanism is not in place for the art markets, and because of the breaks in analogy between art and traditional investment markets, it would be quite difficult to create. The new language in investment would say that there is a lack of transparency in the art markets, and we have been hearing that word being used in discussions of the art markets, lately, too. An appropriate venue for transparent price discovery, in the art markets, would be an on-line platform, in which all dealers, auctions, and collectors have all of their art, displayed with an offer price, and similar ability for buyers to enter bids. Indeed, with all of the information on-line, today, pricing in the art markets has become more efficient than it was in the 1980’s. However, there is not the frequency of auctions that there is in securities, there is no dealer reporting of sales prices for what they sell, and the non-fungiblity of artworks further limits the use of the price information that is available.

In that regard, art dealers will continue to maintain a certain advantage, in the art markets, because, like the sell side in securities, they are the professionals nearest to the business. They have connections or even exclusive contracts with artists, and they establish and maintain their own networks of information and trading with other dealers and collectors, in addition to being aware of all of the public information that is available to others. Moreover, they hold inventories of specific works of art, gaining total monopolies over those: infinite barriers. They also bridge the retail and wholesale segments of the market.

Over my lifetime, I have seen many new investment vehicles designed and marketed by the investment community. Some are developed to fill a general need, like commodities futures and stock options, but most will also become the subject of speculation and abuse. Some are developed to fill a niche that the investment business perceives is ripe for filling, like the LYONS (liquid yield options notes) that Merrill Lynch designed in the 1980’s when someone from the Money Market Accounts department noted that many of the holders of money market funds also put some of their money into stock options. Although LYONS sounded like a great chance to make high returns, in the end, as is often the case with such designs, the holders made very little. Our latest financial crisis was caused by mortgage-backed securities, which were originally invented over half a century ago to allow banks to increase liquidity to be able to create more new home loans, in the U.S., by packaging and securitizing older mortgage loans. The abuse came when Lehman Brothers packaged very high risk loans and led investors to believe in yet another high-return get-rich-quick scheme.

Especially in the local Chinese art market, I have already seen an abundance of people entering the market, as dealers, auctioneers, and collectors, who have no knowledge of or experience with art and who have entered the business only because they hear it can make money. Those things, themselves, will cause some market distortions, yet they will also create opportunities for the true professional. We have seen banks adding art advisors to their wealth management divisions. Now, we see art funds and art stocks in the news as the latest art investment vehicles, designed to attract those with no knowledge of art or with monetary barriers to entry into the dealer business, both inside and outside China. Although newly designed investments can and have hurt the traditional investment markets, as we see it, art funds and stocks will have little effect on the art market, in general, but only on those individuals who venture into investing in them.

Investment has its reason for being in that some people are willing to give up current consumption and save some current income. People are willing to lend out or invest their cash savings, only if they expect to get back more buying power than they had when they saved it. That sets up an interest rate structure, depending on inflation, time to maturity, and risk, among financial investments, given their expected future cash flow generation. Art began as decoration and adornment. Craftsmen and artists made furniture, decorative art, sculpture and paintings of people and events. Eventually, value was placed on the works of certain masters whose creations stood up to the test of time and quality. Beyond that quality, supply, and demand issues, there is a marketing factor, which has an even greater role in the art markets than in the other traditional investment markets, even in their expanded form of today. However, the real purpose and value of art is in being added to a room or a museum, not in sitting in a vault with ownership shares attached.

Thus, art funds and art stocks offer only the chance of appreciation of the value of the underlying art. There may be some income distributions, if, for example, the fund sells some art and distributes some of the proceeds of the sales. However, there is no guarantee that prices of the underlying art will appreciate. Tastes and attitudes change, and there are many examples of artists who were “in”, one day, and “out”, the next. The demand side of the market is shaped by marketing from both dealers and critics. The supply is fixed for dead artists but is ever increasing for living artists, albeit it limited, in some way. In truth, we have even seen examples of living artists destroying the values of existing works by producing a number of copies after an original was sold.

As we have noted, in general, fund managers, even most of the new funds who called themselves hedge funds, are usually not the true professionals, in any investment venue. If one invests in a fund, he will pay a fund management fee, whether the fund makes money or not. Money might be made on appreciation of the works, and some cash flows might be generated by the occasional sale, resulting in special dividend payments. However, the art will sit in storage, missing another advantage of the professional, the art dealers. The fund may allow some people to overcome some capital barriers to entry by pooling a larger amount of capital to be able to buy more expensive works of art. We have even heard of a specialty art fund that focuses on buying art from distressed seller, which is similar to the vulture funds previously created to earn money from corporate bankruptcies or from mortgage foreclosures. Moreover, such a fund will be in competition with auction houses and dealers, who will maintain certain advantages over them. The question is: will that kind of niche fund be able to maintain high returns over time? In the end, all such funds will have little effect on the art market, as a whole, but will only provide miniscule additional competition. Non-tradable funds will limit ability to liquidate your art investment, while exchange-traded funds, like one recently launched on Russia’s MICEX stock exchange, may increase liquidity but might also quickly move to bubble prices, as has happened with several recent launches of art stocks, in China.

So far, concerning art stocks, there has been the launch of an art stock exchange, in France, which securitizes works of art, sells the shares and trades them in an auction. In China, both the Tianjin and Shenzhen Cultural departments have set up portfolios of artists and sold shares that were tradable on an on-line auction. About a month ago, news leaked out that the Tianjin Exchange had indefinitely halted trading as the value of the stock of a particular artist bubbled to a price equivalent of twenty times his last art auction record. Seeking further information about the exchange, a number of news agencies and investigators were met by closed lips. Through our own research, we have found that a similar state of affairs also currently exists at the Shenzhen art exchange. Shenzhen is making plans to develop more of an on-line presence, including offering access to art stock trading to a larger population and sales of art on-line. A similar art exchange has been in the works, in Guangzhou, but still has not yet made its debut.

In the final analysis, what is the point in bidding up the price of a single work of art or art portfolio stock? In order to actually realize the value of the art underlying the stock, the work would actually have to be sold in the art market, not the art stock market, which, unlike the art stock market, will not overprice works, and on eventual liquidation of the stock or portfolio, investors will end up with realized losses. In other investment trading, professionals consider the interconnections, like the price of oil per barrel versus the price per ton of coal; FX futures connected with spot FX prices and interest term rates and forwards. So far, art stock market participants are not doing that but instead are wildly and blindly bidding up prices of art stocks, while ignoring the realities in the real markets for art.

Again, we believe that art stocks will have more of an effect on the wealth of those who venture in, than on the art market, in general. They will also have a propensity to bubble because their small size versus the potential pool of investors may contribute to irrational bidding because of the limited quantity. That was partly the reason that the Shanghai stock index came to a froth a few years back, as millions of Chinese nouveau investors, able to trade on-line, were met with insufficient relative supply of equities. The rapid growth of issues, in that market, will help it iron out the volatility, over time. In the art market, on the other hand, securitization of art will always be limited because most people buy art to display and to enjoy in their homes and offices, and art would lose its true value, if all of it was securitized and relegated to vaults.

In the end, I believe that art funds and stocks are just one more investment instrument designed to convince the unsophisticated investor that there is yet another get rich quick scheme, and certain investors will, once again, become ensnared in the latest trap. In my personal investments in art over the past five decades, I have found that if I buy art that I like, and I use it for decoration, making my home or office more comfortable and inviting, then, later, when I sell it, I will make some money. Making yet one more tailor-made investment vehicles to draw in the masses, especially one in which the art never even gets used, but is only the focus of monetary gain, has the potential to create boom and bust for only those who become involved with them.

My advice to those who want to participate in the art market is, first, learn to appreciate art for its true worth. If you cannot do that, then, do not even bother trying to invest in art. Thereafter, depending on how much money you have to invest, find some good art by searching dealers and auctions, including on-line resources. Do your own homework to decide what is a reasonable price to pay for any particular piece of art. Then, begin your collection, your art portfolio, and use it for your own enjoyment and for the enjoyment of your family and friends. As time goes on, add to your collection, and sell pieces whose prices have appreciated. You will find, eventually, as have I, that, in retrospect, you will have made a respectable return on your investment.

Craig Mattoli,
Leona Craig Art
Guangzhou, China
86 136 3241 0877

Website: http://www.leonacraig.com
11 Gui Gang Three Road, Dongshan Kou, Yuexiu district,
Guangzhou, China 510080
广州市越秀区东山口龟岗三马路11号
086 020 37625069

Pan He Sculpture At Leona Craig Art Gallery, In Guangzhou, China

Leona Craig Art — Mon, 23 May 2011 11:43:23 GMT

We just put out a press release about the sculpture by Pan He that we are accumulating in the Leona Craig Gallery, which you can read at http://www.officialwire.com/main.php?action=posted_news&rid=53248 .

潘鹤雕塑展美国LC艺廊广州中国

Leona Craig Art — Mon, 23 May 2011 11:33:59 GMT

即使从来没有听说过潘鹤这个名字，只要我们提及几个著名的城市雕塑，人们马上恍然大悟，原来是他做的。当然，艺术圈里的人都对这位曾获得两次终身成就奖的雕塑大家再熟悉不过，因为在国内外不同城市里都分布着他的雕塑，作为城市的象征，例如深圳的《开荒牛》，珠海的《渔女》。通常，他的大作品都分布在城市的著名景点，而小作品一般也只陈列在美术馆等公共区域供人观赏。因此，我们LC画廊因为有几件潘鹤的小雕塑而引以为荣。这位被称为“中国的罗丹”的雕塑大家曾经创作了一百多座户外雕塑，分布在国内外68个大城市的中央广场。

出生于1925年，潘鹤从小就对雕塑有着独特的情怀，对米开朗琪罗非常崇拜。家境的富裕，父亲的鼓励使他坚持艺术创作，才造就了今天这位伟大的雕塑家。早在二十世纪五十年代时候，他的作品《当我长大的时候》代表新生的人民共和国，先后被送到瑞士，波兰参加展览，同时还获得毛泽东主席的厚爱。作品《珠海渔女》成为珠海著名的旅游景点，深圳的《开荒牛》鼓舞着几代人不断奋斗，而广州的《五羊雕塑》也在他的参与下完成的。

在与潘鹤的谈话中，他表示，通常他有话要表达的时候才会进行创作，且会用一种含蓄的方式表达自己的想法。像《居里夫人》，《踩你都傻》，《自我完善》，《想不通》，这一系列的作品都表达了潘老作为一个雕塑大家内心深处的真实情感。在《居里夫人》像里，居里夫人是原子弹的发明者，可后人却利用这项发明作为战斗武器，表达了雕塑家对世事的无奈之情。在雕塑《贺龙魂归故里》里，为了平反伟大元帅贺龙的英雄形象，潘鹤在张家界贺龙的家乡做了一座户外雕塑，旁边还配了伴随着贺元帅战胜无数场战争的马匹，讽刺地暗示连畜生都知道元帅的英明，以此向人民诉说着一个不平的年代，一个个英雄被迫害的悲惨故事。而在《开荒牛》里，潘老在牛的后面做了一个老树根，象征封建主义，表达深圳要改革开放，走向科技发展，那么就要把封建主义连根拔起。仔细看开荒牛，发现其前腿已经竭尽全力，象征铲除封建的任务是艰巨的。

潘鹤不仅把雕塑作为自己的创作乐趣，同时，他以一种特殊的方式教育和引导千千万万的人们群众。而且，在他眼里，艺术创作的目的不是为了商业，不是为了金钱，而是承载着一种精神。在文革时，他受委托制作大型毛泽东像，可在运输的过程中需要分开两截，却惨被认为是冒犯毛泽东而被关押。可在几年前，毛泽东的家乡请来潘鹤为博物馆做毛泽东像，他当时要求的制作条件并不是金钱，而是一封简单的道歉信，以还他当年一个清白。潘老主张艺术应当与大家分享，应该是一种精神享受，因此，他的许多创作都分布在大城市的重要景点，以供众人观赏。

最近，在广东省政府的支持下，广州市海珠区人民政府为潘鹤建造的雕塑园正式落成，它是目前国内唯一由政府出资建造的雕塑家个人雕塑园，园内占地面积38亩，展示了潘老从艺以来的大多数作品，反映了中国从19世纪中到21世纪初的历史发展。园内还将建造室内博物馆，主要陈列潘老的小件雕塑及早期的水彩作品。

目前，在位于东山口的LC艺廊里陈列了好几件潘老的作品，其中包括艺术家重要时期的代表作。每个雕塑背后都诉说着一个故事，承载着一个雕塑家的创作精神。

LC艺廊以推广中国现当代艺术为主，展品包括油画，雕塑，湘绣和紫砂壶。画廊总监兼策展人马特利精心挑选画廊的所有展品，他在艺术品收藏交易行业已经有30多年的从业经验，同时，他授教于本地一所大学，担当金融和经济学教授。

联系方式：020-37625069 13632407809
联系地址：广州市越秀区东山口龟岗三马路11号首层
网站：www.leonacraig.com

Bruce Lee Sculpture by Cao Chong En in Leona Craig Art Gallery, in Guangzhou

Leona Craig Art — Sun, 15 May 2011 17:24:00 GMT

Around 2005, Cao Ching En was commissioned to make sculptures of Bruce Lee. He made an 8 meter high version for Lee's ancestoral hometown, Shunde, to the west of Guangzhou, and a 2.5 meter high version, which is located on the waterfront of the Kowloon side of Hong Kong SAR on the Avenue of the stars.

Recently, Cao came to visit us at Leona Craig's LC Yilang, in the Dongshan Kou section of Guangzhou, China, and we visited him at his studios, on the south side of the Pearl River, in Guangzhou. We recently acquired some of his work, and we like to verify the art that we get into the gallery, so, we invited him over. He is a truly delightful man with the heart of a little boy, and even though he is in his 70's, he tells us he still works on his own sculptures, not delegating the work to his apprentices, like so many other artists.

On our trip to visit him, we also got a small version of his Bruce Lee sculpture.

Bruce Lee by Cao Chong En

He also gave us a tour around several of the buildings in which he has his studios set up. During his long career he has created over 2000 individual works, and he tells us that about one-third of them are stored in the one studio on an upper floor. We got to tour gthat room, too, and we took a picture because it was so fun.

Cao Chong En's sculpture vault

As you can see, stone sculptors create a lot of dust. Indeed, there was sculpture everywhere, in the downsatirs levels of the studios, out front, out back. Some were made of stone, some made of marble, some made of clay, some blanks to make bronze castings, and some bronze casting parts of scultures, ready for assembly.

Clay sculptures and bronze parts

Ayu even got to help spray down some clay sculptures that are being created, now, by Cao.

All and all, it was a throughly enjoyable time.

You can see some of the sculpture by Cao Chong En on the Cao Chong En Page of our on-line gallery, or come visit us at LC Yilang, in Guangzhou, to see what we currently have available, in sculpture from Cao Chong En, and more.

Craig Mattoli, Guangzhou, China: 86 136 3241 0877
Website: http://www.leonacraig.com

11 Gui Gang Three Road, Dongshan Kou, Yuexiu district,
Guangzhou, China 510080
广州市越秀区东山口龟岗三马路11号
086 020 37625069

The Chinese Art Markets, Spring 2011

Leona Craig Art — Sat, 23 Apr 2011 03:44:00 GMT

There has been much hoopla, in the news, about the Chinese art sales, for the last several months. It began with the sale of a Chinese vase that had expected to achieve an auction price of several thousand dollars, but which brought tens of millions at a small auction house in England. A similar event occurred at another auction house in the early spring. Other hardy sales continued, in modern paintings. To top it off, Artprice awarded China the number one spot in the art markets. Only days before, the British Art Market Federation had given China, only second place.

By the time I was on Beijing International Radio, in the beginning of April, the true signs were beginning to show. First of all, the buyer had not yet paid on that vase from the beginning of November. One could look further back to the YSL sale of Zodiac Fountain heads, a year or so earlier. Indeed, by the time that the second vase sold, in March, for an exorbitant price versus another pre-sale estimate in the thousands, collectors from all over the world were asking what I thought was going on with those mysterious sales. Many have their own theories, which involve one sort of "funny business" or another. By early April, because of this issue of non-payment, Sotheby's Hong Kong required $8 million deposits to bid on its collection of ceramics from a well-known collection.

Well, lets start with the claim that China is now the number one art market. The survey includes only major auction houses, so, for one thing, it also does not include the gallery, retail market, which is quite large in Europe and the U.S. Moreover, in the U.S., for example, from personal experience, I know that there are many small, weekly auctions, and there are also many flea markets where one can browse and even make good finds. While I have heard that there are flea markets, in Beijing, there are none here, in Guangzhou, that I have ever seen or heard of. The gallery market is also way behind Europe and the U.S. Moreover, form personal experience, also, I know that auction records, in China, are not always completely accurate. For example, I have seen a number of sales in the auction records, yet I know that the items are still at the same dealer's galleries that they were at before the auction. As the head of Bejing's Christie's affiliate who as part of the interview on Beijing Radio pointed out, often an auction will ask an owner of an important piece to put it into auction. There after, bidding will go on to push the price to an extreme level, and at the end, the item is returned to the original collector, while the record shows that it has been sold at a very high price. I know of many other things that go on at the local auctions, all of which are not exactly above board. Another recent article in the London Telegraph tells of how bribes are often paid through art auctions. In their scenario the bribee is given a piece of crappy ceramic art, and the briber bids up the price to Y50,000 or more. Given all of those things, first, we cannot trust the results of auctions, in China, and, second, if you included the total market for art and antiques, China would fall way short of other markets in the West.

Internally, I have not noticed that artists are asking for more money for their works, and people are still trying to beat me down on price, even though we price things reasonably. While prices have firmed over the past year or so that is only natural, given that there was a boom and bust, in the Chinese art market around 2008. The only exception is in Yixing teapot art. Over the past 6 months or so, some teapot artists have raised their prices to us by as much as 100%. We already have written articles about what we consider to be over-pricing in that market, and our response to most of those increases has been to drop the artists from our list.

As an arbitrageur, I know that what one reads in the newspaper is not always true, so, I am always difficult to convince. In the case of the hype in the Chinese art markets, I believe that it is just that: hype. Guy Ullens who has been collecting Chinese art since the 1960's and who was trying to have an art museum in Beijing, recently sold his collection, which is certainly not a positive sign for the markets. I also believe that it is not good for markets to have so much misinformation, and it is dangerous to have amateurs in markets. In the past year or so, many art funds have cropped up, which makes art more about money than about art. Even art stock markets have begun, including one in Tianjin, China, on which trading was halted several weeks back because the price of an artist's painting's shares went to the equivalent of 18 times his last auction market price. As someone who has been observing the evolution of many markets over the last 3 to 4 decades, I consider those things to be bad for the art market.

Bubbles in markets are always caused when the general publish rushes in after they have read about all the fuss in a market. That happened in stocks, in the U.S., in the late 1990's when everyone and his brother became expert stock traders, able to circumvent brokers and investment professionals and trade stocks on-line, and they bid the NASDAQ up to 5000; the eventual crash put it back at around 1000, down 80%. The same has recently happened in the Chinese stock market, and some believe that it is happening, still, in the Chinese real estate market. It also happened in my original market, merger arbitrage, in the 1990's, when many non-experts entered the market and totally reeked havoc on returns. A big problem, in the Chinese art market, beyond what we have already mentioned, is that, first, there is not a culture of home decoration, in place, in China, and, second, too many people with no expertise have gotten into the market because they have heard it can make money. Chinese with a lot of money, on the other hand, tend to show it off, and thinking of reasonable prices often does not enter the equation. Couple that with all of the taunting by the press as to why the Chinese, themselves, cannot afford their own art. Face is everything, and only the facial parts of many things, therefore, are important. That can account, at least partly, for both over-paying and fails-to-pay. It has been going on in the Yixing teapot art market for quite some time. Since Yixing teapots are necessarily Chinese, they have been marketed as one true pure form of Chinese art, and extremely high prices are paid for teapots by many famous artists. When prices get beyond $20,000 for something of which many copies have been made and given our acquaintance with other more reasonably priced artists who also make very few copies of top notch art, we feel that the risks are too high. Another questionable recent sale was a teapot by Gu Jing Zhou, selling for several million dollars. Be that as it may, we have been careful to avoid teapot art the we feel is overpriced, relative to overall art markets, and we have been dealing in only those which we feel ar reasonably priced.

Thus, while the Chinese art markets have their problems, most of the market is still relatively calm and, in fact, underdeveloped, in reality. As a result, we believe that there are still many opportunities, especially in the mid-range and emreging parts of the market. If you're invested in the high end, you might want to consider lightening up and putting your money to work in less visible segments of the market.

We have included links to many of the recent news articles, below.

The Thing about all the Fun at the Auction...
Tianjin Exchange Hypes Art for Money's Sake
Runaway Chinese Art Stock Exchange Halts trading on Top Painting after Price Surge
Major Chinese Ceramics Sale Fails to Live Up to Hype
Auction Clampdown as Non-payers Hurt $120 Billion Asia Market
Chinese Art Market Skyrockets, but do Buyers Actually Pay?
Chinese Vase Frenzy: Bribery and the Auction house
Flop art: Warhol dream fund turns to nightmare
Russia launches $470 million exchange-traded art fund
2011-04-08 China's Booming Art Market: Beijing International Radio
Artprice: the 2010 Art Market Annual Report - China Winner of the Past Decade
China’s $8.3 Billion Art Market Overtakes U.K., Report Says
Chinese Buying Spree, Record Painting boost $54.9 Million Hong Kong Sale
For Guy Ullens, the dream of a Chinese art museum "is over"
Art Funds Return

You can read more articles on the Art News page of our website.

Craig Mattoli, Guangzhou, China: 86 136 3241 0877
Website: http://www.leonacraig.com

11 Gui Gang Three Road, Dongshan Kou, Yuexiu district,
Guangzhou, China 510080
广州市越秀区东山口龟岗三马路11号
086 020 37625069

Visiting with Sculptor Pan He (潘鹤) and His Sculpture Garden, in Guangzhou

Leona Craig Art — Tue, 19 Apr 2011 09:39:00 GMT

Although naughty, media-conscious contemporary artists, like Zhang Huan with his train wrecks and ash Buddhas, and the Luo Brothers with their painted fiberglass dolls, grab the headlines, in the international press, Pan He has been using his sculpture to make social commentary, in China, for over half a century. However, Pan, having grown up in a well-to-do family, in the first half of the 1900's, and having been creating art since that time, has learned to say what he has to say, in more subtle statements. He had even traveled to Europe, several times, to experience outside life, culture, and art before the Communists came to power, in 1949. In truth, there are, on average, about 3 articles per day, in the Chinese press, every day, about Pan He and his work, not just when he creates art that the Western press thinks is outrageous or naughty.

Pan He was inspired at an early age by the works of Michelangelo and Rodin, and many have called him the Rodin and the Michelangelo of Modern China. In his 20's, his work, When I Grow Up, was included in the national art exhibition and came to the attention of Chairman Mao. In fact, that work was Chosen to tour several foreign countries, as the new national china image.

When I Grow Up by Pan He

A few years later, his piece, Hard Times, a commentary on life, in China, during the "famine", also was favored by Mao, and as a result, he was asked to make a sculpture of the Chairman to be erected in his home town, in Hunan. Pan chose a younger, idealistic Mao with longer hair, before he became the tyrant who closed China to the outside world, like so many emperors had done, in the past.  Although people were dissatisfied with his choice, he went ahead. As he was nearing cmpletion of the large stone sculpture, which was so large that it was being carved kin two halves, the authorities jailed him, accusing him of thrying to desecrsate the chairman by cutting him in half. Indeed, recently, when he was requested by the Chinese government to make a second sculpture of Mao, a copy of which is in our gallery, he asked only for a written apology for his treatment during his first Mao project, and he got it.
  Mao by Pan He

Although he doesn't really like art dealers, and he mostly gives away his smaller versions of sculpture to friends, he did come and visit us at Leona Craig's Art Gallery, in Guangzhou, recently, to see the sculpture of his that we have been acquiring, and, then, to take us to visit the new sculpture garden and future museum that Guangzhou is building for him and his works.

He tells us that he only makes art when he has someting to say. He says that sculpture allows for more freedom of interpretation and commentary, and, while his commentary is not always complimentary, the authorities interpret it as such by missing the real points. The Helmsman, a larger work of which we have a copy in the gallery, is one of the sculptures included in his garden. While one might see a strong helmsman at the wheel of the ship, Pan's real question, in this piece, is which way will his country eventually be steered?

The Helmsman by Pan He

Even the layout of Pan's sculpture garden contains a subtle message. After going in, there is a map built into the walk, at the beginning of the park, as shown in these photos.



The story begins with "Survival", in the mid-19th century, which features the sculptures, opium wars, a sculpture of Hong Xu Quan, who organized the Taiping Heavenly movement, which was one of the beginning movements of revolt against the Qing Dynasty, and Scolars, Kang You Wei and Liang Qi Chao who were dedicated to bringing Western knowledge into China, as shown below.



The next section of the park is called "Independence" and is about the early part of the 20th century, during which there were a number of revolutions, beginning with the fall of the qing dynasty bringing in knowledge from the outside into china, in the Qing Dynasty. A sculpture of Sun Yat Sen is manditory for this section, also included are "Get out of my Country", addressing the Japanese invasion, and "Tough Times".

Of course, Mao is also in that section. After that comes "Wealth", which includes many sculptures atht have become the symbols of cities, like Shenzhen, Guangzhou, Xinjiang, and Zhuhai. The final section is dedicated to "Peace". We show a selection of other pieces, included in the sculpture garde, below.











There are many more sculptures in the park, and there are many good stories that go along with each, but we wanted to get this post up, so that we could share a good bit of it, now. Check back, as we will update this entry as time allows.

To see some of the sculptures by Pan He that we have in our gallery at any given time, you can visit the Pan He Page of our website.

Hope you enjoy the tour...we did, and we had a fun afternoon visiting at his apartment, at our gallery, and in the sculpture park with Pan He, the Rodin of China.

Craig Mattoli & Ayu Chen
Leona Craig Art
Guangzhou, China

Website: http://www.leonacraig.com
11 Gui Gang Three Road, Dongshan Kou, Yuexiu district,
Guangzhou, China 510080
广州市越秀区东山口龟岗三马路11号
086 020 37625069

Craig Mattoli of Leona Craig Art Talks about the Chinese Art Market on Beijing International Radio

Leona Craig Art — Sun, 10 Apr 2011 13:19:00 GMT

On Friday, April 8, 2011, Craig Mattoli, head of Red Hill Capital and curator of Leona Craig Art, Guangzhou, was included on a panel of three people, discussing the Chinese art market on Beijing International Radio's Beyond beijing.
You can listen to the broadcast on the following link: Booming China Art Market .

Please listen in. We hope that you enjoy it.

You can read more about recent developments in the art markets on the Leona Craig website, on the Art News Page.

Craig Mattoli,
Leona Craig Art

Recent Works from Dapu (Zhang Ai Min; 张爱民) on the Tibetan Plateau

Leona Craig Art — Fri, 18 Mar 2011 17:57:00 GMT

Our artist Dapu (Zhang Ai Min; 张爱民) lives and paints in Qinghai Province, China, on the Tibetan plateau. He traveled to the Tibetan plateau several years ago to do a few paintings, and he was so taken by the scenery and the gentle people that he moved his family there, so, he could devote all of his time to chronicling life, in the area.

That makes him and his paintings special in a number of ways. While some artists take a short trip to paint scenes from the isolated Tibetan Plateau, Dapu is living there, experiencing life, getting to know the people, and painting the many, varied scenes of life, there, as he experiences it, day to day. More importantly, Dapu does not, like many other contemporary artists, just paint a picture of a photograph, he paints the real thing, and, as a result, his paintings are filled with all of the emotion and excitement that he is feeling when he comes across a scene that he simply has to get down on canvas. The artists-philospoher, Li Zheng Tian, gave him his name, Dapu, which means without guile, because of his dedication to capturing Tibet and it's people in painting, instead of doing more commerial works, like Li and many other contemporary artsts do. But we are happy he has chosen this path, and we are always quite taken by the art that he produces.

He is a younger artist whose works are being collected by a number of prominent Chinese collectors, but he is still relatively unknow. We met Dapu at an art fair a little over a year ago, and we just loved his work. Moreover, in the short time that we have been collecting and dealing in his paintings, he has shown admirable development and growth in his technique and style. Over the last month or so we have acquired a number of beautiful and thoughful new paintings from him, and we wanted to share them.

Summer in the Chai Da Mu Basin, 180x110 cm

The Colors of Tibet, 130x110 cm

The Pulse of Life in the Grasslands, 150x80 cm

Dreaming of a Bright Future

You can see more from Dapu on the Dapu pages of the Leona Craig Website. We hope that you enjoy his work as much as we do.

Craig Mattoli,
Leona Craig Art, Guangzhou, China

Happy Lunar New Year from Leona Craig Art: Chinese year of the rabbit; Vietnam year of the cat

Leona Craig Art — Sun, 06 Feb 2011 05:14:00 GMT

新年快乐。。。Happy Lunar New Year from all of us at Leona Craig Art, Guangzhou, China

from Craig, Ayu, Fannie, Long Long, Carrie, and Yi Ling
Leona Craig Art and L. C. Yilang, Guangzhou, China: 86 136 3241 0877
Website: http://www.leonacraig.com

11 Gui Gang Three Road, Dongshan Kou, Yuexiu district,
Guangzhou, China 510080
广州市越秀区东山口龟岗三马路11号
086 020 37625069