“The money craze hit the wine market as well. After all, if you can’t afford the big estate or the Ferrari, you can still have the best wines. Like 12 bottles of Domaine de la Romanée-Conti Grand Cru 1978 vintage for $39,500 per bottle. In all fairness this went to a thirsty Chinese buyer at a Hong Kong sale last September. In a recent New York auction someone paid only $14,000 for 3 bottles of Romanée-Conti, 1999 vintage.

By the way, at an auction of Chinese art in Hong Kong a few days ago, prices went through the roof. A tiny Ming dynasty porcelain cup, a rarity called the Meiyintang “chicken cup” (it had little chickens painted on it) sold for $36 million. I’m a fan of Chinese art, but really, $36 million?

Marginal cars, marginal art, marginal properties, marginal watches, and overpriced wine. That tells me that there is too much money sloshing around. When money like that is tossed around by those who have benefited from the Fed’s largesse, there is something wrong. I’ve seen too many cycles to be fooled again by money steroids. These phenomena repeat themselves over and over with every cycle and nobody seems to notice or even care while the markets are hot. They think the party will last forever. But it never does.

These are bad signs for those who are fully invested and highly leveraged.”

When The Top Goes Over-The-Top: What The Soaring Price Of Ferraris, Wine And Art Tell Us


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