“The bubble in contemporary art is about to pop. It has exhibited all the classic features of the South Sea bubble of 1720 or the tulip madness of the 1630s. It has been the bubble of bubbles - balancing precariously on top of other now-burst bubbles in credit, housing and commodities - and inflating more dramatically than all of them. […] In his book, Manias, Panics, and Crashes, Charles Kindleberger observed that manias typically start with a ‘displacement’ that excites speculative interest. It may come from a new object of investment or from the increased profitability of existing investments. It is followed by positive feedback as rising prices encourage less experienced investors to enter the market. Then, as the mania gets a grip, speculation becomes more diffuse and spreads to other types of asset. Fresh assets are created at an ever faster rate to take advantage of the euphoria and investors try to increase their gains by borrowing to buy assets or using derivatives. Credit ultimately becomes overextended, swindling and fraud proliferate, and the mania ends in panic as investors seek to liquidate their positions. The art market has adhered spookily to Kindleberger’s model.” - full story (via things magazine)