More Bubble Signs: Jay Z raps the Warhol, Korea’s Invisible Tower

When the art markets become mainstream and appear priced to perfection then they could be indications of escalating overconfidence and or a culmination of a mania phase of the bubble cycle

Could rapper Jay Z rapping about Warhol, Basquiat and Art Basel signal an art bubble? Market guru James Grant thinks so.

From the CNBC:

Market guru James Grant quotes Jay Z's "Picasso Baby" in his latest Grant's Interest Rate Observer, arguing that prices in the contemporary art market may not be justified by long-term value. While well-hyped artists like Jeff Koons, Damien Hirst and Jean-Michel Basquiat are fetching eight-digit prices, it's unclear whether their work will withstand the test of time, art critics and museums.

It's hard to tell, for instance, whether one of Koons' famous pieces, "New Hoover"—four vacuum cleaners in an acrylic case —will be valued as a work of genius or "just another vacuum cleaner," Grant said.

"Modern art is valued in terms of modern money," he wrote. The Fed's low-interest-rate policies have driven the wealthy increasingly to collectibles of all kinds, including art, cars and jewels. "Miniature interest rates have reduced the opportunity cost of investing in any kind of nonyielding asset."

And while Koons and Basquiat are hot now, they might end up like the English portraits of the early 19th century, whose frenzied boom was followed by a spectacular bust. Prices never recovered.

The zero bound rates or free money chasing of asset markets has apparently percolated into the art markets. 

But the property sector has been ground zero for asset bubbles (aside from the stock markets).

 

Mushrooming signature skyscrapers almost everywhere (see previous post here here and here) appear as intensifying signs of an inflating bubble. One symptom: the skyscraper curse or monuments of grandeurs

From the Business Insider

The world will soon have its first "invisible" skyscraper.

There's no construction date yet for the planned 1,476-foot tower, called Tower Infinity. But its architects have just been granted a construction permit to begin building outside of Seoul, South Korea near Incheon International Airport.

The visionaries behind the project, GDS Architects, will make the tower appear "invisible" using an LED facade system with optical cameras to display what's directly behind the building. When turned on, the "reflective skin" of the building will give the illusion that Tower Infinity is blending in with the skyline.

The building's projections may also be used for broadcasting special events, or for advertising purposes, according to GDS Architects.

The tower itself has an impressive profile, with a main spire flanked on either side by two separate building wings. Tower Infinity will be used primarily for entertainment and leisure purposes, and is set to include a 4D theater, restaurants, a water park, landscaped gardens, and the third-highest observation deck in the world.

The actions of the bond vigilantes will determine whether these markets are bubbles or not.  My guess is on the affirmative