William Grant is an economic and quasi-political commentator who recently wrote an article on what he believes is growing irrationality in the investment world. He picks two events that occurred on November 15:
(1) the sale at auction of Leonardo da Vinci’s Salvator Mundi for $450.3 million – a painting that sold for $10,000 as recently as 2005 – and (2) Société Générale’s overwhelming success of in selling €500 million in 3-year senior unsecured zero-coupon bonds of Veolia, a former water and wastewater treatment provider turned global entertainment wannabe. The unsecured notes were priced to yield -0.026%.
“That’s right,” says Grant, “a BBB-rated company managed to convince investors to pay them, at issuance, for the privilege of lending the company money.”
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