For years, tourists have been able to experience a taste of Europe at hotels in Las Vegas – the gondolas at The Venetian, the Eiffel Tower at Paris Las Vegas, and the fountains at The Bellagio are examples. In Dubai, however, developers are taking the concept to a much more luxurious level.
After delaying construction due to the global financial crisis, the Kleindienst Group is starting work this year on an island resort called The Heart of Europe, which is part of Dubai’s The World islands development. Six man-made islands—named after Europe, Sweden, Monaco, Germany, Switzerland, and St. Petersburg—will be located about 2.5 miles off the coast of Dubai and will offer visitors a taste of European architecture, culture and food.
Travelers who are already familiar with Europe – the real one – may be more interested in the project’s luxury villas, called Floating Seahorses. As the name suggests, the villas will float in an open aquarium featuring an artificial coral reef and marine life, including endangered seahorses. Each villa will have three levels, and the main bedroom and bathroom will be underwater—meaning guests can view the sea life from the comfort of their own beds.
My Country for Your Picasso
Could a piece of art be worth more than an entire nation? An auction at Christie’s this week in New York suggested the answer might be yes. On Monday, Pablo Picasso’s 1955 masterpiece “Women of Algiers,” a colorful depiction of several women in a harem, sold for $179.4 million, to an anonymous bidder.
To put that amount in perspective, it’s more than the gross domestic product of the Pacific island nation of Kiribati, which was $169 million in 2013. The previous world record for a piece of art sold at auction was Francis Bacon’s “Three Studies of Lucian Freud,” which fetched $142.4 million in 2013.
There’s so much money floating around in today’s high-end art market that Christie’s set nine more world records at the auction, including the $141.3 million sale of Alberto Giacometti’s “Pointing Man,” more than triple the previous record for the sale of a sculpture.
A rare piece of wartime memorabilia is going under the hammer at Christie’s in London. A mint condition Supermarine Spitfire Mk. 1, an iconic British fighter aircraft used during the Second World War, will be auctioned in July. The P9374/G-MK1A disappeared in May 1940 after its pilot, Officer Peter Cazenove, was forced to crash land on Calais beach during an air battle over Dunkirk.
Cazenove survived the incident, but the plane was swallowed up by the sand and it remained hidden there for the next 40 years. After the much-admired aircraft was discovered in September 1980, a group of 12 engineers spent three years bringing it back to life, using many of its original components.
The owner, American philanthropist and art collector Thomas Kaplan, plans to donate the proceeds of the sale to charities, including the Royal Air Force Benevolent Fund, which helps veterans and their families. Kaplan also owns the only other fully restored Mk. 1 Spitfire, the N3200, which he plans to give to the Imperial War Museum in Duxford, England. The P9374 is expected to fetch up to $3.9 million so its next owner will need deep pockets. A flying license would be handy too.
Looking for Better Growth? Adjust Again.
When U.S. first-quarter GDP growth came in at just 0.2 percent, economists were taken by surprise. They had expected stronger numbers, especially after jobs data ad been so strong. It turns out they may not have been wrong after all. Researchers at the Federal Reserve of San Francisco say that although the GDP data released by the Bureau of Economic Analysis is seasonally adjusted, it still exhibits “calendar-based fluctuations.”
This so-called “residual seasonality” is common in the first quarter because seasonal patterns such as holiday schedules and weather variations aren’t fully accounted for—even in the adjusted data. Because of this, first-quarter GDP has been consistently weak for the past 25 years. In the 1990s, growth averaged 1 percentage point lower in the first quarter than in the rest of the year. Between 2000 and 2014, the shortfall was 2.3 percentage points.
What is the solution offered by economists Glenn D. Rudebusch, Daniel Wilson, and Tim Mahedy? They suggest adding a second layer of seasonal adjustment to ensure all of the seasonal variations are covered, which would boost last quarter’s GDP number to 1.8 percent. That’s means there’s “a good chance,” the economists say, “that underlying economic growth so far this year was substantially stronger than reported.”
First published in The Financialist in May 2015.