Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes…”Stocks, bonds, art, housing, VC portfolios of billion-dollar startups… everything’s on the line.”
by Wolf Richter
WolfStreet.com
May 14, 2015
Since last week, $2.1 billion worth of artworks have changed hands at Christie’s and Sotheby’s in New York. “Les Femmes d’Alger (Version ‘O’)” by Pablo Picasso sold for $179.4 million, highest price ever paid for a painting at an auction. The bronze, “L’Homme au Doigt,” by Swiss artiest Alberto Giacometti went for $141.3 million, a record for a sculpture.
There was Mark Rothko’s abstract painting “No. 10,” for $81.9 million, another Picasso, a Van Gogh, Lucian Freud’s “Benefits Supervisor Resting,” for $56.2 million, an Andy Warhol, Claude Monet’s “Nympheas” for $54 million, a Francis Bacon for $47.8 million, Rothko’s “Untitled (Yellow and Blue),” which describes it perfectly, for $46.5 million. It was an international feast of money: At Christie’s, there were bidders from 35 countries, at Sotheby’s from over 40 countries.
These sales will goose second quarter GDP by over $2 billion, not counting the money spent on luxury hotels, restaurants, parties, transportation, gifts, and the like. This is how the “wealth effect” is supposed to work – cranking up the real economy. Central banks, and particularly the Fed, which instigated it, have been saying this for years. We grudgingly admit the “wealth effect” worked. This side of the economy is hopping.
The Rest…HERE
