http://amarginofsafety.com/2014/09/23/contemporary-art-auctions-reach-records/?utm_source=rss&utm_medium=rss&utm_campaign=contemporary-art-auctions-reach-records "...to distill the secret of sound investment into three words..." Mon, 24 Aug 2015 14:39:02 +0000 hourly 1 http://wordpress.org/?v=3.2 http://amarginofsafety.com/2014/09/23/contemporary-art-auctions-reach-records/comment-page-1/#comment-40939 Ray Galkowski, CFA Mon, 24 Aug 2015 14:39:02 +0000 http://amarginofsafety.com/?p=1806#comment-40939 QE and ZIRP flooded the markets with cash that had to go somewhere. Most of it ended up in the hands of people who have the ability to borrow and spend at low rates. Companies issued debt at low rates to buy back their stock and buy other businesses and the corporate executives who get paid mostly in stock (options, etc.) are the beneficiaries. So, a significant amount of QE and ZIRP got into the hands of people who are likely to bid up the prices of things like art. QE and ZIRP first found its way into the stock market. Those options paid for art and other luxury items. QE and ZIRP flooded the markets with cash that had to go somewhere. Most of it ended up in the hands of people who have the ability to borrow and spend at low rates. Companies issued debt at low rates to buy back their stock and buy other businesses and the corporate executives who get paid mostly in stock (options, etc.) are the beneficiaries. So, a significant amount of QE and ZIRP got into the hands of people who are likely to bid up the prices of things like art. QE and ZIRP first found its way into the stock market. Those options paid for art and other luxury items.

]]> http://amarginofsafety.com/2014/09/23/contemporary-art-auctions-reach-records/comment-page-1/#comment-28287 Kyle Tue, 23 Sep 2014 22:33:25 +0000 http://amarginofsafety.com/?p=1806#comment-28287 Please help me understand how the art market relates to QE. Low rates on fixed income make investors want to buy expensive art? Where is the proof of that? Are you saying people are buying art at auctions to bid it up higher at another auction? Like a momentum stock that keeps going higher and higher despite a low intrinsic value, like Tulipmania? Please help me understand how the art market relates to QE. Low rates on fixed income make investors want to buy expensive art? Where is the proof of that? Are you saying people are buying art at auctions to bid it up higher at another auction? Like a momentum stock that keeps going higher and higher despite a low intrinsic value, like Tulipmania?

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