{"id":8148,"date":"2015-05-15T06:21:16","date_gmt":"2015-05-15T11:21:16","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8148"},"modified":"2015-05-15T06:21:16","modified_gmt":"2015-05-15T11:21:16","slug":"afraid-of-losing-trillions-wall-street-fights-fed-rate-hikes","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8148","title":{"rendered":"Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes"},"content":{"rendered":"

Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes<\/a><\/h3>\n

Since last week, $2.1 billion worth of artworks have changed hands at Christie\u2019s and Sotheby\u2019s in New York. \u201cLes Femmes d\u2019Alger (Version \u2018O\u2019)<\/u><\/a>\u201d by Pablo Picasso sold for $179.4 million, highest price ever paid for a painting at an auction. The bronze, \u201cL\u2019Homme au Doigt<\/u><\/a>,\u201d by Swiss artiest Alberto Giacometti went for $141.3 million, a record for a sculpture.<\/p>\n

There was Mark Rothko\u2019s abstract painting \u201cNo. 10<\/u><\/a>,\u201d for $81.9 million, another Picasso, a Van Gogh, Lucian Freud\u2019s \u201cBenefits Supervisor Resting<\/u><\/a>,\u201d for $56.2 million, an Andy Warhol, Claude Monet\u2019s \u201cNympheas\u201d for $54 million, a Francis Bacon for $47.8 million, Rothko\u2019s \u201cUntitled (Yellow and Blue),\u201d which describes it perfectly, for $46.5 million.\u00a0It was an international feast of money: At Christie\u2019s, there were bidders from 35 countries, at Sotheby\u2019s from over 40 countries.<\/p>\n

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 \u201cwealth effect\u201d is supposed to work \u2013 cranking up the real economy. Central banks, and particularly the Fed, which instigated it, have been saying this for years. We grudgingly admit the \u201cwealth effect\u201d worked. This side of the economy is\u00a0hopping<\/em>.<\/p>\n

It so happens that the St. Louis Fed, which apparently hasn\u2019t gotten the memo,\u00a0reported<\/u><\/a>that \u201cthe middle class may be under more pressure than you think.\u201d It determined that the \u201cmiddle class,\u201d as defined in the report, has seen its median income fall by 16% between 1989 and 2013.<\/p>\n

Yet there\u2019s a problem in this gorgeous scenario: the Fed has stopped QE last year and since then has been engaged in a veritable cacophony about raising rates. It could end the party. Bonds, stocks, and art could crash. Fed heads have vaguely threatened to do it for months but keep pushing that vague threat further into the future every time the market backs off its all-time high just a little.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Afraid of Losing Trillions, Wall Street Fights Fed Rate Hikes Since last week, $2.1 billion worth of artworks have changed hands at Christie\u2019s and Sotheby\u2019s in New York. \u201cLes Femmes d\u2019Alger (Version \u2018O\u2019)\u201d by Pablo Picasso sold for $179.4 million, highest price ever paid for a painting at an auction. The bronze, \u201cL\u2019Homme au Doigt,\u201d […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,305,1154,431,661,662,860],"class_list":["post-8148","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-federal-reserve","tag-interest-rate-policy","tag-interest-rates","tag-qe","tag-quantitative-easing","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8148"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8148\/revisions"}],"predecessor-version":[{"id":8149,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8148\/revisions\/8149"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}