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In the flask, the liquid oxygen is blue. The magnet does not retain any of the liquid nitrogen, but liquid oxygen collects between the magnet's poles.
The oxygen is blue and paramagnetic (i.e. attracted to a magnet) for the same reason: the two unpaired electrons in its outermost orbital. The electrons both create a magnetic assymetry in the oxygen molecules and absorb light in the red portion of the visible spectrum. This light absorbtion is a two-molecule/one-photon transition with a wavelength of 630 nm. The entire equation to explain the oxygen's color is:
2 O2(3Sg) + hv -> 2 O2(1Dg)
This is the opposite of the transition that gives rise to the red glow in the singlet oxygen chemiluminescence demonstration. A single photon carries enough energy to excite two O2 molecules simultaneously. This transition is not observed in small amounts of oxygen gas at low pressures due to the very low probability of this three-body process. In the liquid, however, this transition is rather common because, as a general rule, the volume of a gas decreases by a factor of about 800 when it forms a liquid.
This material is based upon work supported by the National Science Foundation under Grant Number 1246120