Last week the Art Investment Council (AIC) presented a private panel: Is the Art Market in a Bubble?

Moderated by Stephen Brodie, partner at Herrick, Feinstein LLP, the panelists consisted of Benjamin Mandel, Economist at the Federal Reserve Bank of New York, Michael Moses, Co-Founder of Beautiful Asset Advisors, Michael Plummer, Co Founder & Principal at Artvest Partners LLC and Barrett White, Senior Vice President, Christie’s, Post War & Contemporary Art.

Michael Moses described a market bubble in terms of return: a bubble means annual growth of at least 25% per year, for at least five years in a row. A few obvious examples include Japan during the 1980’s and the U.S. from 1995 to 2000.

During discussion, all panelists confirmed what experienced professionals working in the field know well, and that which makes it such a unique beast –more than any other, the art market is driven by emotion, collector psychology and confidence (or lack there of) in the market. Following the 2008 economic collapse, the market experienced the shortest contraction in history (3 years) due largely to consumer confidence in art as an asset class. Those who stayed away from the sales in 2009 began to feel they were missing out on some favorable prices, and those who had refrained from selling saw sales jump.

Other topics of discussion throughout the evening included art funds (15-20 years in the future), online price databases (collectors love them while dealers feel they can betray their own purchase prices to clients) and regulations and commission transparency along the lines of the real estate market (it will happen when the scale of the art market demands it).

The final verdict? The general consensus among all was that the art market is not in a bubble – yet. What leads to a bubble? Panelists cited troubles in China, which constitutes 40% of the auction market, and the struggling Euro. Perhaps the most insightful explanation (or warning) of a bubble is the ignoring of connoisseurship in one’s field. This in turns leads to inflated prices being paid for inferior works, a phenomenon seen in the early to mid 2000’s.

Art lovers were blessed with perfect weather last week at the 2012 Biennale des Antiquaires held in Paris’s Grand Palais. In its 26^th year, the fair is the foremost showcase of art and antiques for dealers from the Société National des Antiquaries (SNA).

In a venue designed by Karl Lagerfeld this year, dealers exhibited in lanes of two-storey white shop fronts, and there was no shortage of stunning antiques to admire. Amongst a healthy mix of old, new and Revivalist pieces was a rare, blue slant top desk varnished in the Chinese taste, by Pierre IV Migeon and the “frères Martin,” France c. 1735 offered by Anne-Marie Monin (Paris), an ornamented walnut and marble cabinet by Édouard Lièvre c.1875 offered by Galerie Marc Maison (Paris), and an 1874 Emile Reiber rosewood, ebony, walnut, gilded and silvered bronze corner cabinet with enameled cloisonné offered by Oscar Graf (Paris).

While galleries such as Richard Green (London), Galerie Mendes (Paris) and others brought striking examples of Dutch floral and Old Master work, the fine art leaned toward European Modern and Contemporary. Italians Lucio Fontana and Georgio Morandi appeared beside the French: Yves Klein, Fernand Leger, Simon Hantai. One stand-out was Galerie Patrice Trigano (Paris) showing a selection of still life paintings by the self taught Séraphine de Senlis. The man of the hour? Fellow primitive Jean Dubuffet, with pieces being offered by no fewer than 20 galleries including Galerie Zlotowski (Paris) whose booth featured Dubuffet en Papier, a grouping of the artist’s works on paper.

Last, but certainly not least were the jewels. Cartier, Van Cleef & Arpels, Dior, Bulgari, Piaget, Siegelson (New York), Chanel, Boucheron (Paris), Chaumet (Paris), and Wallace Chan (Hong Kong) - the list goes on.

If you were looking for sparkle, one couldn’t have asked for a better venue. Spirits (along with Mr. Lagerfeld’s balloon) seemed high.