James Grant, publisher of Grant’s Interest Rate Observer, talks about Federal Reserve policy, investment strategy and the sale of one of Edvard Munch’s four versions of “The Scream” for $119.9 million. Sotheby’s managed a record price and sale tally at last night’s auction in New York. Grant speaks with Deirdre Bolton on Bloomberg Television’s “Money Moves.”

(Note: I disagree with Grant about Art)

Source: Bloomberg, May 3 2012

Category: Video

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5 Responses to “Grant on `Scream’ Painting, Fed’s `Hall of Mirrors’”

  1. PeterR says:

    Mr. Grant is brilliant as always, if a bit ascetic!

    Take-away? Washington DC especially the Fed is an increasingly powerful Joker or wild card in our, indeed the world’s, economy with its “wall-to-wall manipulation.” — “The giant squid of squids.”

    Not sure BR why you disagree with him about Art, but I understood him to say, mainly, that the high price paid for The Scream reflects investors’ desires to move away from paper investments to hard investments such as art, essentially another commodity although granted (no pun intended) in this case the art was on canvas (basically a coarse paper of sorts, of course!).

    Is it crazy to pay $120 million for this work of art as an investment? Maybe or maybe not? Time will tell.

    Have a good weekend.

  2. It’s not a question of whether art is worthwhile… it IS. For me aesthetics are primary.

    And it’s not a question about the quality of this or any other particular painting….

    For me it’s a question of how the distribution of ‘decision-power tokens’ (money) across a social body affects valuations.

    Now its certainly impossible to quantify what would make this piece 120 times more valuable to someone than 120 other paintings valued at $1 million each.

    But here’s my question:

    In a hypothetical society where everyone had exactly the same amount of money… What price would it (or any piece of similar perceived quality and scarcity) bring?

    Conversely, in a highly stratified society… what price? Especially if many on the low end saw $120 million as literally the difference between life and death…. and had the power to disrupt the status quo… (this is what I call the justice imperative arising out of the ICT and the Ultimatum Game dilemma).

    The price of art may not so much reflect the ‘artistic’ level of a society… but may be an indicator of distorted incentive structures and extreme imbalances.

    I don’t want to be a spoil sport… and not suggesting that this is some harbinger of the apocalypse… but insane prices for the work of dead artists never cheers me up.

  3. jswap says:

    “(Note: I disagree with Grant about Art)”

    Grant said Bernanke is driving art prices. That’s the only statement on art I heard. Is that what you disagree with?

  4. boveri says:

    $120 million for the Scream says that the buyer has so much excess capital on his hands that there is no further motivation for him to deploy capital that would accelerate economic activity for all society.

    He therefore needed to be taxed more heavily to relieve him of non-productive monies. What could be simpler to comprehend?

  5. ConscienceofaConservative says:

    Bloomberg has an interesting piece on economic performance before and after we got off the gold standard including cpi change and economic growth rates.