What may have lead to the current loss of wind beneath our wings.
Bear
Posts: 18,953 ✭✭✭
1. Too much of the greater fool theory,
in many dealers buying coins at auctions
at inflated prices to sell at hyper inflated prices.
2. Mint sales of sets sucking up available cash from collectors and
dealers alike.
3.If you look at recent auctions, the quality of offerings has been dropping
overall. Too much dross not enough quality.
4.The toned coin scandal has scared many average collectors from this aspect
of collecting. Fearful of being left holding the bag when the game of musical chairs stops.
5. In a long term rising market, many dealers get sloppy in managing their overhead and
in maintaining good customer service.
6. The crunch of increasing consumer debt and the start of a housing decline has caused many
collectors to become more conservative in their spending habits.
7. The instinctive tightning in grading expectations has begun in the market place.
8. Marginal dealers are feeling a cash flow pinch with the plunging precious metal prices.
What metals stock they hold has become a declining asset.
9. Coin Market declines always start unexpectedly, suddenly and in a manner totally unexpected.
Just when everyone is singing hallalulah for the sky is the limit, the wings fall off the plane.
10. Down turns may be precipitated at a particular time ,by the above events and may be worsend
by such event, they are a normal and periodic part of any bussiness or collecting cycle.Keep your head
and this too shall pass.
in many dealers buying coins at auctions
at inflated prices to sell at hyper inflated prices.
2. Mint sales of sets sucking up available cash from collectors and
dealers alike.
3.If you look at recent auctions, the quality of offerings has been dropping
overall. Too much dross not enough quality.
4.The toned coin scandal has scared many average collectors from this aspect
of collecting. Fearful of being left holding the bag when the game of musical chairs stops.
5. In a long term rising market, many dealers get sloppy in managing their overhead and
in maintaining good customer service.
6. The crunch of increasing consumer debt and the start of a housing decline has caused many
collectors to become more conservative in their spending habits.
7. The instinctive tightning in grading expectations has begun in the market place.
8. Marginal dealers are feeling a cash flow pinch with the plunging precious metal prices.
What metals stock they hold has become a declining asset.
9. Coin Market declines always start unexpectedly, suddenly and in a manner totally unexpected.
Just when everyone is singing hallalulah for the sky is the limit, the wings fall off the plane.
10. Down turns may be precipitated at a particular time ,by the above events and may be worsend
by such event, they are a normal and periodic part of any bussiness or collecting cycle.Keep your head
and this too shall pass.
There once was a place called
Camelot
Camelot
0
Comments
<< <i>1. Too much of the greater fool theory,
in many dealers buying coins at auctions
at inflated prices to sell at hyper inflated prices.
2. Mint sales of sets sucking up available cash from collectors and
dealers alike.
3.If you look at recent auctions, the quality of offerings has been dropping
overall. Too much dross not enough quality.
4.The toned coin scandal has scared many average collectors from this aspect
of collecting. Fearful of being left holding the bag when the game of musical chairs stops.
5. In a long term rising market, many dealers get sloppy in managing their overhead and
in maintaining good customer service.
6. The crunch of increasing consumer debt and the start of a housing decline has caused many
collectors to become more conservative in their spending habits.
7. The instinctive tightning in grading expectations has begun in the market place.
8. Marginal dealers are feeling a cash flow pinch with the plunging precious metal prices.
What metals stock they hold has become a declining asset.
9. Coin Market declines always start unexpectedly, suddenly and in a manner totally unexpected.
Just when everyone is singing hallalulah for the sky is the limit, the wings fall off the plane.
10. Down turns may be precipitated at a particular time ,by the above events and may be worsend
by such event, they are a normal and periodic part of any bussiness or collecting cycle.Keep your head
and this too shall pass. >>
Wise old bears always keep their cupboards full of jelly donuts.
hi, i'm tom.
i do not doctor coins like some who post in here.
And everything I would like to be?
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>I feel as though this is the beginning of the end. When dealers start talking of bears, it is too late for the market to be salvaged. I foresee coins selling at firesale prices in the near future (at least the common ones). >>
Let it happen in January! I'll have some funds then
Still wanna invest in coins? The big rip the past few years would have been in the stock market which is nearing an all time high.
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
I hardly think the economy is great. Just my perception.
I think the white house likes to say that things are great...but they are far from.
John
siliconvalleycoins.com
<< <i>I hardly think the economy is great. Just my perception.
I think the white house likes to say that things are great...but they are far from. >>
So, Bush took the wind.
<< <i> I dunno...I believe the national unemployment rate is 5%. To me, that means that 95% of Americans are working. >>
Just for clarity, the unemployment rate would reflect the percentage of persons employed and actively seeking employment as 100% total. That is to say, of those who are either working or actively pursuing employment, 5% of them are not currently employed.
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
I doubt the coin market will stop its run. It won't be as steep but it will continue to increase, all the signs are there.
From my perspective it appears like it's a situation of dealers caught with too much inflated price inventory and it's summer, things were slow.
If the market is going into the crapper how is it Buffalo sales are so strong and stupid money chases FS, MS70 bullion? How can anniversary sets costing stiff money get sold out in a matter of hours?
If the market is headed south, it's in these areas where plastic determines the price and not the grade. Rare coins which are accumulated by collectors [not investors] will always be rare and sought after long after the slab mania subsides.
<< <i>5. In a long term rising market, many dealers get sloppy in managing their overhead and
in maintaining good customer service. >>
That's an excellent observation. And by the way, this is a very well thought out post. Thanks Bear.
<< <i>I'm glad a buyer's market may be upon us. >>
I am too. But remember, a seller's market brings out the best coins and we've seen some awsome stuff in the last few years.
The resurgence in interest in collecting and entry of new collectors drives up prices, but at some point people are priced out of the market, or begin to believe that prices are more likely to go down than to go up further.
The rising market brought large volumes of coins to auction. Perhaps too much. Most collectors have only so much free cash to spend on a hobby or an “investment” vehicle.
Hot markets attract speculators who are out to make a quick profit. These are often the first buyers to abandon the market once prices stop rising rapidly. This leads to both increased inventory available for sale and decreased demand as the speculators sell out and exit the market.
The “generic” gold market gets over inflated by gold fever. If you are convinced that gold is going to continue to rise, why pay a premium for a generic numismatic item, when the money taken up by that premium could instead be invested in more bullion coins? At some point people figure that out, usually after gold prices have declined, with the result that the overpriced generic gold takes a bigger tumble than bullion.
Rising prices makes doctoring more profitable. This leads to fear and scandal as more and more “made” coins are discovered. Eg. a smart collector who likes blue proof IHCs should be making certain that they can differentiate between tissue toning and MS70 toning. The concern over doctoring alone should make buyers more cautious but can also lead to a wider loss of confidence, causing buyers abandoning a market niche.
CG
<< <i>
<< <i> I dunno...I believe the national unemployment rate is 5%. To me, that means that 95% of Americans are working. >>
Just for clarity, the unemployment rate would reflect the percentage of persons employed and actively seeking employment as 100% total. That is to say, of those who are either working or actively pursuing employment, 5% of them are not currently employed. >>
Those that are not actively seeking work are usually undesirerable workers. The economy is probably operating at near full employment.
Knowledge is the enemy of fear
<< <i>
If the market is going into the crapper how is it Buffalo sales are so strong and stupid money chases FS, MS70 bullion? How can anniversary sets costing stiff money get sold out in a matter of hours?
If the market is headed south, it's in these areas where plastic determines the price and not the grade. Rare coins which are accumulated by collectors [not investors] will always be rare and sought after long after the slab mania subsides. >>
It's still common knowledge that these coins are crap. Market tops are usually formed when everyone agrees the sky is the only limiting factor.
I think you'll also be hard pressed to find a lot of speculating and investing in these coins. It may be true that buyers of these are less sophisticated than buyers of classic gold but that doesn't necessarily mean they are buying them primarily to make money. How many moderns do you think were in the Ohio worker's comp hoard?
The late comers who overbought crap under the assumption that a rising tide raises all ships are sitting on a bunch of overpriced common material.
It is the second group of material that keeps hitting the markets, often with unrealistic reserves because
"I paid X amount, i wount take less that 0.9 * X"
People are being more selective, and the nice coins will still enjoy strong demand from collectors, but since many specultors are in a cash crunch, bidding might not get crazy.
A witty saying proves nothing- Voltaire (1694 - 1778)
An error does not become truth by reason of multiplied propagation, nor
does the truth become error because nobody will see it. -Mohandas K. Gandhi (1869-1948)
There will always be more supply in the coin indusrty... The mint sees to it.
There will always be large volume dealers creating low supply issues which influence the market ie. market makers
The only way to increase demand is to educate new coin collectors in a positive way.
So are you guys basicly saying, me stating in a not-so-polite manner (oops...sorry), that the coin hobby is getting too expensive for you to participate in so this is why you are predicting a demise?
You know, Yankees or Red Sox tickets were once cheap and one can argue the game used to be "the game" way back when, but today those stadiums are still full and the seats aren't cheap.
Granted, different people occupy those seats, but the seats are filled nevertheless.
Sorry to be so direct.
Casino gambling has not particularly helped. (most of that credit card debt is for cash).
Scenario A: Bob works all day, it's Friday. Bob wants to find great coins on ebay. Bob's wife wants dinner a movie and maybe a trip to the casino. Who wins?
Scenario B: Bob works all day and moonlights in the evenings. Bob wants to head to the coin show this weekend. Bob's wife needs groceries, the lawn mowed, hedge trimmed, a few other honey-do's, and some money to go to the casino. Who wins ?
Okay, I solved the problems of the world. What's for dinner ?
as a side note:
My name's not Bob !
<< <i>Good point, Curly. The great economy, low interest rates, low inflation, low unemployment and the rapidly falling price of oil/gasoline all bode well for everyone. >>
Looks like the Paulson pre-election smoke and mirrors trick actually has some people fooled.
Don't believe the inflation figures unless you think your food/electric/insurance bills are only 5% higher than 2 years ago. Of course the price of energy/gas/oil has been removed from the CPI too.
The low interest rates are fine as long as US Banks continue to buy treasury bills with new printed dollars through foreign banks. That will change when the election is over.
The unemployment figures don't include the 20 buck/hr factory workers who are now making 7$/hr at WalMart. Nor the ones who have been unable to find even that.
The rapidly falling price of gasoline.....Gee I haven't seen that at the pump. Do you really think it will get back under $2 anytime soon??
All is not well on the US financial front and the average coin collector owes more on 18% Credit Cards than their collection is worth.
<< <i>1. Too much of the greater fool theory,
in many dealers buying coins at auctions
at inflated prices to sell at hyper inflated prices.
2. Mint sales of sets sucking up available cash from collectors and
dealers alike.
3.If you look at recent auctions, the quality of offerings has been dropping
overall. Too much dross not enough quality.
4.The toned coin scandal has scared many average collectors from this aspect
of collecting. Fearful of being left holding the bag when the game of musical chairs stops.
5. In a long term rising market, many dealers get sloppy in managing their overhead and
in maintaining good customer service.
6. The crunch of increasing consumer debt and the start of a housing decline has caused many
collectors to become more conservative in their spending habits.
7. The instinctive tightning in grading expectations has begun in the market place.
8. Marginal dealers are feeling a cash flow pinch with the plunging precious metal prices.
What metals stock they hold has become a declining asset.
9. Coin Market declines always start unexpectedly, suddenly and in a manner totally unexpected.
Just when everyone is singing hallalulah for the sky is the limit, the wings fall off the plane.
10. Down turns may be precipitated at a particular time ,by the above events and may be worsend
by such event, they are a normal and periodic part of any bussiness or collecting cycle.Keep your head
and this too shall pass. >>
Well said!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
coynclecter - You live in a HOLE??? Gas has gone down 20- to 25% in the past TWO WEEKS nationally. I am actually quite surprised at this. There is still a heavy refining process burden, and I don't know how the discovery of new oil would make that much of a difference.
Who is saying the markets are near record highs??? There is just stock sector repositioning, and don't believe everything the liberal media reports. As of TODAY, 421 of the S&P 500 stocks since the beginning of year 2000, are still valued LESS THAN TODAY!!! THAT IS 6 3/4 YEARS!!! Remember, the NASDAQ was above 5000 once. Low 2000's isn't close to any "records".
Commodities are taking a breather due to demand. Mainly building materials, (steel included). We all know the housing market is slowing, but far from "busting". Anyway, the demand for lumber, steel, etc. down, the higher supply (supposedly) of oil and gas, and WALLA:
The other metals go down with the other commodities. Maybe as a ripple effect, but inflation fears subsiding, the Middel East conflicts and oil settling down have a major effect.
What does this have to do with coins??? Gold and Silver of course:
You have to use common sense regarding all markets. Gold and Silver have literally JUMPED to unsupported high levels in the past couple years, and is still quite high. On the supply side, do you not think the U.S. Mint took advantage of these higher prices with their buffalo gold and silver mint sets??? HELLO!!!! Why are so many talking about gold and silver going down and "hurting" the coin market? What?? Did you expect Gold to go to $800???
Just like oil ws going to $100 a barrel, a Florida home will go up 30% a year, and Yahoo stock was gonna go to $400 a share years ago.
Reality overnight throws a blanket over the herd and greed.
<< <i>The rapidly falling price of gasoline.....Gee I haven't seen that at the pump. Do you really think it will get back under $2 anytime soon?? >>
Yeah, already happened.
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
what else can we do ????
lets all jump off the nearest cliff befor were hit in the head as apparently the sky is falling !
Somebody is still going for the nice ones!!!!
1944-D 50C MS67 PCGS Walker
I'd say Coynclecter has the Paulsen pre-election rigging story quite right. The same crap occurred in Aug-Oct of 2003. What discovery of new oil? The news about the oil in the Gulf of Mexico is miles below the ocean floor and miles into the earth's crust. The technology isn't even quite there and it will be 5+ years before anything comes out of there. The amount of risk involved is huge so who is going to take it? The so-called new oil is probably more natural gas than anything since that is typically what lives at those depths.
I guess that the price of gas, oil and PM's going down means that all the ills of the economy that were present in May are now all fixed.
Congratulations to the Bush team for fixing all that in only 4 months. Great job guys.
Who is saying the markets are near record highs???
I agree on that. Stock performance has been sideways or flat for the better part of 10 years. No great story on that. For every winner there are just as many losers. Factor in the "real" inflation of 6-8% and most "winning" stocks are losers as well. It's great to pay taxes
on a 6-8% inflation as well.
Just like oil ws going to $100 a barrel, a Florida home will go up 30% a year, and Yahoo stock was gonna go to $400 a share years ago.
Reality overnight throws a blanket over the herd and greed.
Oil will make $100 per barrel. Is it time for another Lloyd Lotto? It may take 5 years but it's headed there long before the Dow reaches
36,000.
Unemployment, if all those truly unemployed or who have given up looking or accepted McJobs in place of $50K per year is running 12%.
Of course it looks much better for the BLS to report a 5% figure and keep that happy face smiling.
roadrunner
<< <i>I foresee coins selling at firesale prices in the near future (at least the common ones). >>
I sure as hell hope so. Then again how can you sustain a continually rising market when 98% of what is available is overgraded junk.
Why do you think certain big ticket dealers with their overgraded coins (yep in looking at some of them they look like they were either submitted a gadzillion times or somebody gave them the grade based on whos name is on the invoice) are hitting on you guys here? They certainly aren't selling these coins to the public at shows (don't have the money) or anyone who will take the time to see if they make the grade. I've seen them on the bourse - they have even by my table to try to sell their overgraded wares to me at bid LOL. Sorry I pass - too busy buying American Eagle Gold near melt or decently graded coins from others that actually make the grade LOL. The big dealers running down wanabees - they can just KMA. With their overgraded big ticket coins they're even bigger racketeers than wanabees ha ha.
Due to the market slowness I am only offering walkup sellers around 65% of CDN bid right now. One guy was rather hacked at my offer on his 2 dozen lot of slabs s(65% of CDN bid) but then came back to sell them to me cause no one else would pay what I was or just did not have the funds. There is not Santa in numismatics and I am not gonna be the bank for rare coins either. If I can not buy at my price and instantly make a profit - sorry - pass!
We should have our own CNBC "happy face vs. frown face". Bet we would get good ratings!!!
<<that all the ills of the economy>> What ills?? Oil and gas has gone down. That makes consumers feel better, and save a ton of money. Especialy since winter is coming.
<<Congratulations to the Bush team for fixing all that in only 4 months. Great job guys.>>
Presidents and "their teams" do nothing to turn the economy one way or another. It's primarily luck for them. Besides, there was nothing to fix. The markets moved in the way they moved, and thus, cheaper commodities and higher stock values.
<< <i>11. killing the OF. >>
But soon, this will provide a thermal updraft
Buy quality coins
Pay a reasonable and realistic price
Hold the coins for 5-10 years
You should be able to reap financial reward, as well
as have years of enjoyment as well as make new friends.
Camelot
hyper modern plastic market
Credit of the consumer maxed to the hilt (essentially 0% savings)
The same consumers have looted their mortgage equity to buy
plasma TV's, hummers, and consumer goods.
$1 Trillion in ARM mortgage debt to be adjusted upwards in 2007.
A govt that is basically broke with a large chunk of our assets
owned by foreign nations. We can become "unbroke" by giving
away more of those assets. The number grows steadily.
Real hourly wages that have been dropping for decades. The
worker is making less while the corporations/govt are getting more.
Bogus BLS stats: rather than the 3-4% inflation, 5% unemployment
that they state, it's more like 6-8% and 10-12%. See "stats" link
below by John Williams.
Bubbled mortgage market ready to deflate.
TIC, Current Account, and Budget deficits that are in a word: "ugly"
$300 TRILLION in derivative risks (compare that to 1980's number
which was a tiny fraction of that). JPM alone added $5 TRILLION
of derivatives to their "portfolio" just in one quarter this year!
An economy that is dependent on war and consumerism for survival.
(hint: consumerism is now on the downturn)
Borrowing $2 Billion per day to float the US economy
An economy where most of the job creation in the last few years
were either govt jobs, housing related jobs, or service related jobs
in the entertainment/hotel/restaurant areas...not in bottom line
production. Watch those babies go away shortly. And let's not
forget the BLS's BD model that counts 900,000 new jobs each
year because they think they should.
A major recession is looming and it's only a matter of how long the Treasury and FED can keep it at bay through market manipulations
of the Plunge Protection Team and Exchange Stabilization Fund.
I hope they can keep it at bay through at least 2007. Because the
GDP numbers are goosed more than ever, it will take longer this time around for an official verdict to be publicized and awake the masses. But first, they have to do whatever it takes to show "happy" numbers leading into the election. Once that's accomplished, then we can see where the numbers will honestly trend to. $3.25 gas is not conducive to the republican party goals.
$2.25-$2.50 gas will do just fine to secure the election. Then as winter hits......back we go.
Ills? Yeah, I don't see any either.
roadrunner
I see homes being built everywhere in the six figure bracket.
I see at least two cars in front of every house.
I see every major highway full of automobiles.
I see people shopping all over the place.
I don't see people starving.
I don't see people being refused medical treatment.
I don't see kids not being made available to an education.
I don't see people living on the streets (unless they choose to do so).
I guess I just don't see the doom and gloom that has been forcasted for the last couple of decades.
To me, the promise of America if that every person will have the opportunity to make it, the rest should be up to the individual.
To keep this post on coins, I hope the market on them hits rock bottom because I am a pure collector and that helps me.
<< <i>Curly clearly you don't live on the south side of Chicago where I work. >>
Is there something in my post that doesn't apply to the south side of Chicago?
<< <i>Pharmer,
I hardly think the economy is great. Just my perception.
I think the white house likes to say that things are great...but they are far from.
John >>
When in doublt blame Bush...just silly! Blame him for a bad hair day while you're at it.
It's called supply and demand, cycles and opportunities...which is what this is for the next few months.
<< <i>A lot of you guys throw figures out there that I don't understand. All I know is what I see when I look around me.
I see homes being built everywhere in the six figure bracket.
I see at least two cars in front of every house.
I see every major highway full of automobiles.
I see people shopping all over the place.
I don't see people starving.
I don't see people being refused medical treatment.
I don't see kids not being made available to an education.
I don't see people living on the streets (unless they choose to do so).
I guess I just don't see the doom and gloom that has been forcasted for the last couple of decades.
To me, the promise of America if that every person will have the opportunity to make it, the rest should be up to the individual.
To keep this post on coins, I hope the market on them hits rock bottom because I am a pure collector and that helps me. >>
There are a lot of things you don't see because you don't know where to look.
A lot of people are hurting with their finances but they keep it to themselves and it is not really obvious.
I see lists of homes once a week in the newspaper that have been foreclosed (including 6 figure houses in "nice" areas)
I see a long line of people outside at a local soup kitchen once a week on my way home from work (that line is not getting
smaller).
etc. etc. On the surface things look wonderful, scratch it a little bit and you will seen things are not necessarily so great.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I now live on social security and investments. If my investments had went to hell (and some of them did) it wouldn't be anyone's fault but mine.
I honestly don't think that the economy is bad just because some people are struggling in it.
Lord, I love coin collecting.