In his blog of April 2nd, Felix Salmon interprets UBS' decision to shutter its art-advisory division as a positive presager of the death of the idea of art as an asset. Specifically, he writes:

UBS was always well placed to be the last man standing in the inevitable shakeout of art-advisory departments in investment banks. It had the most rich clients, and it invested by far the most money in pushing itself as the only bank which could manage both dollars and Diebenkorns. So this announcement is pretty shocking — but also a little heartening, to those of us who love art for its intrinsic rather than its monetary value.

Salmon's position flies in the face of centuries which have witnessed the happy coexistence of art's aesthetic and financial benefits and begs the question: Since when did intrinsic artistic value negate intrinsic economic value?

Today, art inspires a significantly higher degree of confidence than many of the nearest AAA-rated financial instruments. Salmon's argument seems more in tune with that sector of the art world cognoscenti intent on keeping those economic benefits from accruing to anyone outside of a tightly prescribed buying and selling circle. Such a stance contributes to keeping art at the level of a discretionary whim, a Saturday afternoon indulgence rather than an economic or any other necessity.

Let's take a look at what actually unfolded at UBS. To date, the bank has posted six consecutive quarters with tens of billions in asset writedowns, watched its stock price decline from $36 a year ago to $10 today, and has had its debt placed on credit watch by at least one of the major credit rating agencies. UBS' efforts to sell some of its major assets carry more than a whiff of desperation, it's cut thousands of jobs, and the bank itself has been rumored to be for sale. 

All of the above combine to leave little in the way of the reputational capital required for the inspiration of confidence in wealth management clients. So the announcement of UBS' exit from the art-advisory business is really not shocking at all. Salmon's imputation of his own agenda onto the actions of a diversified financial institution in the current economic climate is amateurish at best. Art as an asset didn't implode, UBS did.