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Are we approaching bubble status?

Look, I get it folks! Pre-war vs modern, investment vs non-investment arguments.

Noticing some INSANE closing prices:

'67 PSA 8 Carew: just sold for $900
'63 Rose 7's: well above $1,000, 8's over $2,000
Anyone watch the Andrew Luck auction?: $42,000!!!
A lot of us watched the Brett and Yount hammer price.

I'm not trying to re-hash an exhausting debate.
I'd like to see prices stabilize and come back down to earth before we reach bubble status.

Maybe the market's a little too excited about the new baseball season? Who knows!
Anyone else got some insane closing prices to post?

«1

Comments

  • I wish I did, but you would probably know about it.

    I am going to hedge a guess and say nothing will be stable until, say, every pack of 1968 Topps has been unearthed and as far as we know, all Rod Carew cards now have their whereabouts known, and those deemded as gradable has been graded. At which case a true price can be given. Until such time, I would think prices will flux based on interest, quality, and rarity of the grade. Obviously a 9 and 10 would prove most rare in this case, and so it is unlikely at this point that many more will be graded at such high levels. Given these variables and other unforseen factors (a movie about Rod Carew, his death, etc), generally, Rod Carew probably has reached a more stable level of selling than something like a Bryce Harper whose cards have not even begun to get graded (nor are they at this time needed unless for the sake of your PC). Most modern stuff are 10's out of the pack. But older stuff are not so there is still the likelyhood of cards being pulled that could be 10's or otherwise. Its a volatile hobby with multiple factors to truly stabelize. And with sources like eBay, everyone is a dealer, and so competition will create a further uneven marketplace.
  • JaktJakt Posts: 573
    I don't know what the pop reports show on the Carew and Rose (and am too lazy too look right now) but for ANY auction with a player who is STILL in the game to end at $42K is just INSANE!

    That may not be a function of a bubble but rather the complete loss of rational thought. What is the buyer hoping to achieve with that purchase?
    I'm building a 1968 and a 1970 Topps set. I have lots of 1970s and 1960s to offer in trade.
  • MattyCMattyC Posts: 1,335 ✭✭
    I hear you, but I don't see those prices as insane. Those prices are just what someone is willing to pay. If a guy has the coin and wants to spend it on something he loves, I say have fun. Also we're talking about some very high end items in their respective arenas, and such items don't often tank. The PSA 8 Carew is still a great card of one of the greatest pure hitters of all time, and Rose's RC is a must-have for many a collection. I don't see strong sales of such seminal HOFer cards being a threat to prices in terms of a bubble bursting.
  • doog71doog71 Posts: 405 ✭✭
    Sure, how about the PSA 10 1981 Topps Rose that hammered at $2,564 a few days back?
  • MattyCMattyC Posts: 1,335 ✭✭
    One cannot discount the power of the Registry.
  • My goodness Bernanke has now managed to create a bubble in baseball cards.
  • emaremar Posts: 697 ✭✭✭✭


    << <i>One cannot discount the power of the Registry. >>



    P*ssing contest...
    Yesterday my 6 month old mini pinscher tried to go up against the neighbor big dog....
    Raised his back leg at the pole and peed on his front leg instead LOL image
  • JustinsShoeboxJustinsShoebox Posts: 1,301 ✭✭✭


    << <i>Sure, how about the PSA 10 1981 Topps Rose that hammered at $2,564 a few days back? >>



    If it was the 180 Rose, it is pretty difficult to 10. None of the top 5 registry set holders of this set have this card yet; only 4 examples.

    Justin
  • I love threads like this -- really gets to the heart of the graded card's ability to increase sale prices.

    The 1981 Rose had 19 bids, the first 17 up to $1100 and then two bidders going way past that to $2564.

    I looked at the pop report for 1981 Topps and PSA 10 looks hard to pick up. Must be all those unopened
    hoarders keeping supply down. LOL

    It's not unusual in other collectible markets for collectors to pay a significant for the very best examples
    of an item. PSA 10 is that.

    But I am surprised to see PSA 8s going way past typical pricing. 1968 is my favorite set and I've seen prices
    going signifciantly up for a lot of high-grade HOF cards cards in the last few years, but generally PSA 9 and 10.



    The greatest trick the devil ever pulled was to convince the PSA 10 collector he didn't exist.

    DaveB in St.Louis
  • Stone193Stone193 Posts: 24,351 ✭✭✭✭✭


    << <i>Are we approaching bubble status? >>





    << <i>I'm not trying to re-hash an exhausting debate. >>



    Hiya emar

    I think you are asking that "same ole" question.

    However, IMO, you have that right and people have the option to respond or not.

    I've been collecting for a bit now and don't have the foggiest idea?

    Ya know? I think it gets down to individual taste.

    Anyone who hasn't thought of cards as an investment at some time during their "collecting cycle" may be fooling themselves?

    My take? I've learned - from experience - to collect "what" I like - for fun - since collecting for "investment" seems like work. And I already have a job. The trite statement of the month!

    If anyone is collecting for investment? I wish them all the best. I've just learned that it just doesn't bring me happiness.

    I wrote a segment on "my contribution to collecting..." And haven't added anything to it in a while - ya might find it fun to do a chronology on your collecting experience. I know I learned a lot of myself - with respect to a hobby.

    I bought a ton of stuff - with no idea why? No focus. No budget.

    Well - I think I best give someone else a chance to talk on this! image

    edit: the "insane prices" on some cards is part of the "charm" of the hobby - if ya got'em? Sell'em! The Registry? Sure - a motivator. My take? A piece of marketing genius!
    Mike
  • JoeBanzaiJoeBanzai Posts: 11,171 ✭✭✭✭✭
    I took a look at the Luck auction and was dumbfounded!

    $40,000.00 for a player with one year of professional experience. One hit away from retirement. $40,000.00, unbelievably, five people besides the winner, bidding at $40,000.00or more.

    Joe
    2013,14 and 15 Certificate Award Winner Harmon Killebrew Master Set and Master Topps Set


  • << <i>I took a look at the Luck auction and was dumbfounded!

    $40,000.00 for a player with one year of professional experience. One hit away from retirement. $40,000.00, unbelievably, five people besides the winner, bidding at $40,000.00or more.

    Joe >>



    I think thats half of Luck's 2012 salary.
  • olb31olb31 Posts: 2,900 ✭✭✭✭✭


    << <i>Sure, how about the PSA 10 1981 Topps Rose that hammered at $2,564 a few days back? >>



    i have 1 of 3 1981 topps rose's bgs 9.5. any idea what that could fetch based on the psa 10 sale?
    Work hard and you will succeed!!
  • JustinsShoeboxJustinsShoebox Posts: 1,301 ✭✭✭


    << <i>

    << <i>Sure, how about the PSA 10 1981 Topps Rose that hammered at $2,564 a few days back? >>



    i have 1 of 3 1981 topps rose's bgs 9.5. any idea what that could fetch based on the psa 10 sale? >>



    Post a scan and perhaps we can give some idea. 9.5 doesn't automatically mean 10.

    As far as the market craziness. I see this most often at the beginning of every year with sales. I love getting fast pops and turns this time of year. Lots of tax money available for collectors. It's not usually sustainable throughout the year, but you can bet lots of money is spent Q1 of every year due to available money. I know that's the case with me. image

    Justin
  • What is your definition of investment? How long do you plan on holding on to the investment? I buy and sell a lot of cards (almost all are of the lower price variety) but I never buy with the intent of holding on to them for a certain amount of time. I do what a lot of people do, try to find cards for less than their true value and sell for close to their true value.

    If I had to pick something to buy and sit on for X amount of years, I have no idea what I would buy.
  • JMDVMJMDVM Posts: 950 ✭✭✭


    << <i>I took a look at the Luck auction and was dumbfounded!

    $40,000.00 for a player with one year of professional experience. One hit away from retirement. $40,000.00, unbelievably, five people besides the winner, bidding at $40,000.00or more.

    Joe >>



    Not sure this was a real sale. THe card was re-listed
  • JoeBanzaiJoeBanzai Posts: 11,171 ✭✭✭✭✭


    << <i>

    << <i>I took a look at the Luck auction and was dumbfounded!

    $40,000.00 for a player with one year of professional experience. One hit away from retirement. $40,000.00, unbelievably, five people besides the winner, bidding at $40,000.00or more.

    Joe >>



    Not sure this was a real sale. THe card was re-listed >>



    I noticed the winner was not a registered user, that doesn't matter! Five people also bid over $40,000.00. The odds on Luck being a HOF'er are very long, he has tremendous talent, but as I said, he has one year under his belt and football is a tough sport.

    Joe
    2013,14 and 15 Certificate Award Winner Harmon Killebrew Master Set and Master Topps Set
  • This is why I perfer Pre-War. Most of the cards before 1950 that are gradeable (I'm not talking Authentic throu VG3) have been graded. How many American Caramel, Play Ball or Goudey Packs do you see??

    Packs from the 1950's till 1970's are out their, just do a web search. The 1980's till now is junk wax (I know the junk wax era ended aroung 95-97.) The cards were produced and sold all over the country, many people getting ready to retire still have their box. But, do not care about the value. The kids can have it when they die.

    I do know the argument, Black Swamp Find. These are rare occurances (a different rare than listed on ebay in the Sports Card section). These Populations do not jump like the rest from one year to the next. That is why I believe these are a much better and more stable investment. Pick up a few HOF'ERS you should do good.

    Dave
  • Many were asking if Gold was reaching a bubble status recently.
    Everyone was buying gold. Buying Gold signs and stores were opening up across the country.

    I think cards would reach a bubble status if lots of new stores were opening up, and lots of new
    people entered the game because they saw easy money. That's usually a sign of a bubble.

    I don't see that here.
  • epatmythesepatmythes Posts: 1,514 ✭✭✭
    There are still a ton of people out there that love sports cards...

    Yesterday's big news headlines read, something like this from CNN, "What a quarter! Dow and S&P at record highs"...

    I ain't one of them, but there are plenty of people out there with f it money, and I guess they believe now is as good a time as any to have fun with it!
  • Dpeck100Dpeck100 Posts: 10,910 ✭✭✭✭✭
    Andrew Luck second time


    Here is the link to the second go round of the Andrew Luck referenced. The under bidders were most likely having fun too on the first one. With a little digging so were these bidders.


    Sold for $7,500




  • I don't know if we are moving towards the bubble however, I am getting more than I thought I would, selling cards now. I have sold cards for 3x to 4x the amount I paid just a couple of years ago. Mind you these are not high grade, high value cards either. So I don't know whats happening right now but, I'm loving it.
  • mcadamsmcadams Posts: 2,611 ✭✭✭
    Price appreciation rarely occurs smoothly, as your Financial Advisor may predict. It occurs rapidly and in bunches. Prices of things (stocks, Real Estate, commodities, cards) move sideways or with little price changes for long periods of time, and then have rather rapid moves up or down.

    That being said, I certainly do not see a bubble in cards right now. What I see is a newfound appreciation for the ultra high end of the market. But for mid-grade stuff and even PSA9 graded HOF RCs from the 70's-80's, I don't see prices rising at all. I think the collector base has just shifted their interests upstream. Instead of holding 15 PSA 9's of a group of players, people would rather hold 2 or 3 PSA10s instead. When you see people bidding up 8's and 9's, let me know.
    Successful transactions with: thedutymon, tsalems1, davidpuddy, probstein123, lodibrewfan, gododgersfan, dialj, jwgators, copperjj, larryp, hookem, boopotts, crimsontider, rogermnj, swartz1, Counselor

    Always buying Bobby Cox inserts. PM me.
  • Of course it is a bubble. There is no intrinsic value in a subjectively graded piece of cardboard featuring a man in a funny outfit. I can't understand why intelligent people speculate in a market that is completely driven by the opinion of some random person behind a curtain.

    The only safe bet in the hobby is big cards (Goudey Ruth, T206 Cobb, CJ Joe Jackson, ect...) in low grade condition. These cards will always be desirable. Don't cost much, won't sell for much more, but will never lose value. Sooner or later people who pay $8k for a 1978 Molitor/Trammell PSA10 will have to come to the realization that is is nothing but an overpriced piece of cardboard that few people really want. Too much value is in the label. If grading companies didn't exist you think someone would pay $8k for that card? Nope. The seller would have a hard time getting $100 for it.

    Think Dutch tulip mania.

    image


  • << <i>This is why I perfer Pre-War. Most of the cards before 1950 that are gradeable (I'm not talking Authentic throu VG3) have been graded. How many American Caramel, Play Ball or Goudey Packs do you see??

    Packs from the 1950's till 1970's are out their, just do a web search. The 1980's till now is junk wax (I know the junk wax era ended aroung 95-97.) The cards were produced and sold all over the country, many people getting ready to retire still have their box. But, do not care about the value. The kids can have it when they die.

    I do know the argument, Black Swamp Find. These are rare occurances (a different rare than listed on ebay in the Sports Card section). These Populations do not jump like the rest from one year to the next. That is why I believe these are a much better and more stable investment. Pick up a few HOF'ERS you should do good.

    Dave >>



    +1
    The greatest trick the devil ever pulled was to convince the PSA 10 collector he didn't exist.

    DaveB in St.Louis
  • There is currently a bubble in specific areas of the market. T206 backs is a prime example.
  • ndleondleo Posts: 4,064 ✭✭✭✭✭
    Graded sportscards are a legit asset class, just like art or even gold. There is a liquid exchange (ebay) and the market info is generally distributed evenly. I've heard the "no intrinsic value" argument for a while now. This hobby is over 100 years old, I think the value question has already been resolved.

    If would have dumped all of my 401(k) money into high grade vintage instead of stocks in 2002 after the tech bubble, I would have made much more money.
    Mike
  • Well since speculators are buying cards and trying to sell at higher prices, then there is a bubble since it is no longer card collectors alone that are fuelling demand.
    Prices will drop when the speculators get out and move to the next hottest thing.
  • DodgerfanjohnDodgerfanjohn Posts: 489 ✭✭✭


    << <i>Graded sportscards are a legit asset class, just like art or even gold. There is a liquid exchange (ebay) and the market info is generally distributed evenly. I've heard the "no intrinsic value" argument for a while now. This hobby is over 100 years old, I think the value question has already been resolved.

    If would have dumped all of my 401(k) money into high grade vintage instead of stocks in 2002 after the tech bubble, I would have made much more money. >>



    HUH?

    The stock market closed today almost 4000 points higher than the 2002 highwater mark, and around 8-9K higher than in 2000.

    I don't understand the hyperbolic statements made on this forum, nor do I understand the misrepresentation used by adjusting time frames to fit scenarios.

    Its almost like people are using a form of post purchase rationalization.


  • << <i>

    image >>



    I would say we are past the bear trap of 08 and since the media have been covering some big auctions, that would put the market somewhere around enthusiasm on the curve. Greed will follow soon as there are some signs of it (high BIN's, buying too much) already.
  • DodgerfanjohnDodgerfanjohn Posts: 489 ✭✭✭


    << <i>Graded sportscards are a legit asset class, just like art or even gold. There is a liquid exchange (ebay) and the market info is generally distributed evenly. I've heard the "no intrinsic value" argument for a while now. This hobby is over 100 years old, I think the value question has already been resolved.

    If would have dumped all of my 401(k) money into high grade vintage instead of stocks in 2002 after the tech bubble, I would have made much more money. >>



    I think thats the point Bigjed was attempting to make.

    Without underlying fundamental support, its basically just a big pyramid scheme and everyone hopes they are not the sucker at the end of the line holding the bag.

    Underlying fundamental support is people who are long term hobbiests buying higher end cards for personal pleasure or what Dpeck posted a few weeks back about conspicuous consumption(rich people buying bragging rights).

    Considering the level of shilling thats been exposed in this arena, I'd argue that realized prices are less about boys with deep pockets and more about forcing up the prices that one or two OCD collectors has to pay.

    Whatever. Its not a venue I'm gonna dump money into, and its debatable whether or not I'll still be into collecting enough at the moment the bubble bursts to come back and mock those who were left holding the bag.
  • emaremar Posts: 697 ✭✭✭✭


    << <i>Well since speculators are buying cards and trying to sell at higher prices, then there is a bubble since it is no longer card collectors alone that are fuelling demand.
    Prices will drop when the speculators get out and move to the next hottest thing. >>



    I disagree with the speculators concept.
    Speculators got burnt during the dot-com bust when betting on a company with a 50000 p/e.
    The bid/ask spread is too far apart with collectibles...listing fees, selling fees, shipping fees. You need to sell at too great of an "ask" price to show a profit.

    Speculators typically are good at pushing prices up and getting out at the right time.
    There's too much involved for liquidating a position with collectibles.
    I'm not saying we're not in a bubble. Maybe a little bit of irrational exuberance at times.


    Erick

  • Speculators are lazy by nature and are looking for the quick score so they can move
    on to their next speculative nature and avoid having to hold full-time jobs. LOL. And
    they have the attention span of a gnat.

    I don't think sports cards today can support the kind of big buy-in and quick turnover that defines
    true speculation. The older good stuff is too expensive, and the newer cheap stuff is not likely to
    yield enough $$$. You really need that buy low sell high secanario that doesn't exist in an easily
    monetizing fashion and we don't have that now in cards.

    Are some people still dabbling in cards mainly for investment purposes? Surely, but I don't
    think they're a large part of the market today.

    Just my .02 worth.

    The greatest trick the devil ever pulled was to convince the PSA 10 collector he didn't exist.

    DaveB in St.Louis
  • ndleondleo Posts: 4,064 ✭✭✭✭✭


    << <i>

    << <i>Graded sportscards are a legit asset class, just like art or even gold. There is a liquid exchange (ebay) and the market info is generally distributed evenly. I've heard the "no intrinsic value" argument for a while now. This hobby is over 100 years old, I think the value question has already been resolved.

    If would have dumped all of my 401(k) money into high grade vintage instead of stocks in 2002 after the tech bubble, I would have made much more money. >>



    HUH?

    The stock market closed today almost 4000 points higher than the 2002 highwater mark, and around 8-9K higher than in 2000.

    I don't understand the hyperbolic statements made on this forum, nor do I understand the misrepresentation used by adjusting time frames to fit scenarios.

    Its almost like people are using a form of post purchase rationalization. >>



    The market was around 10K in 2000. Since then it has crashed to around 7500 four times and 6500 once. It has it 14,000 three times. Unless I timed it perfectly and bet all my money at the bottom, the typical return is 40% over 13 years. This assumes that I would have not panicked and sold my stock like a lot of people did.

    If I bought high grade vintage and rookie cards instead, I would have been ahead and had a lot more fun doing it. If you think sportscards are any less valuable than stock, tell that to the former GM, Washington Mutual, and Lehman Brothers stockholders.

    Mike
  • ndleondleo Posts: 4,064 ✭✭✭✭✭


    << <i>

    << <i>Well since speculators are buying cards and trying to sell at higher prices, then there is a bubble since it is no longer card collectors alone that are fuelling demand.
    Prices will drop when the speculators get out and move to the next hottest thing. >>



    I disagree with the speculators concept.
    Speculators got burnt during the dot-com bust when betting on a company with a 50000 p/e.
    The bid/ask spread is too far apart with collectibles...listing fees, selling fees, shipping fees. You need to sell at too great of an "ask" price to show a profit.

    Speculators typically are good at pushing prices up and getting out at the right time.
    There's too much involved for liquidating a position with collectibles.
    I'm not saying we're not in a bubble. Maybe a little bit of irrational exuberance at times.


    Erick >>



    Send your collection to Brent or Rick and you're done selling.

    Bottom line is high quality stuff always has value.
    Mike
  • PSASAPPSASAP Posts: 2,284 ✭✭✭
    With the low interest rates that banks are paying (Chase is currently paying .2% annually) there will be an incentive to take some of that money and buy cards, with the hope of flipping them for more. Really, how hard is it to beat .2%?
  • hammeredhammered Posts: 2,671 ✭✭✭
    "This hobby is over 100 years old, I think the value question has already been resolved."

    ∧ This is the only part of the discussion that is relevant, IMO
    I recall experts saying in the early 90's that the ceiling was about to collapse on the sportscard market
  • ClockworkAngelClockworkAngel Posts: 1,994 ✭✭✭


    << <i>"This hobby is over 100 years old, I think the value question has already been resolved."

    ∧ This is the only part of the discussion that is relevant, IMO
    I recall experts saying in the early 90's that the ceiling was about to collapse on the sportscard market >>



    And it did.

    But then PSA started grading cards and 20 years later we have a new and very different ceiling
    The Clockwork Angel Collection...brought to you by Bank of America, Wells Fargo, and Chase
    TheClockworkAngelCollection
  • ClockworkAngelClockworkAngel Posts: 1,994 ✭✭✭


    << <i>Of course it is a bubble. There is no intrinsic value in a subjectively graded piece of cardboard featuring a man in a funny outfit. I can't understand why intelligent people speculate in a market that is completely driven by the opinion of some random person behind a curtain.

    The only safe bet in the hobby is big cards (Goudey Ruth, T206 Cobb, CJ Joe Jackson, ect...) in low grade condition. These cards will always be desirable. Don't cost much, won't sell for much more, but will never lose value. Sooner or later people who pay $8k for a 1978 Molitor/Trammell PSA10 will have to come to the realization that is is nothing but an overpriced piece of cardboard that few people really want. Too much value is in the label. If grading companies didn't exist you think someone would pay $8k for that card? Nope. The seller would have a hard time getting $100 for it.

    Think Dutch tulip mania.

    image >>



    I spent a little over $4000 for that same Molitor 1 year ago in the DMitri Young auction and very clearly remember a few heckles from board members about the price I paid. And of course there were many other cards sold in that auction that had experts from the forum shaking their heads saying they couldn't possibly hold their value. I wonder what all those same cards would go for right now.
    The Clockwork Angel Collection...brought to you by Bank of America, Wells Fargo, and Chase
    TheClockworkAngelCollection
  • mcadamsmcadams Posts: 2,611 ✭✭✭


    << <i>I spent a little over $4000 for that same Molitor 1 year ago in the DMitri Young auction and very clearly remember a few heckles from board members about the price I paid. And of course there were many other cards sold in that auction that had experts from the forum shaking their heads saying they couldn't possibly hold their value. I wonder what all those same cards would go for right now. >>



    I too remember the hecklers in that thread and I'm glad that time has proven you correct (at least over the short-run). Even without the recent spike in low pop psa 10's, I think you'll do well over the long-run with your purchase, simply because it has Dmitri's name on the flip. That auction has taken on a special place in collecting history, and I think collectors want to have a piece of that auction in their collection.
    Successful transactions with: thedutymon, tsalems1, davidpuddy, probstein123, lodibrewfan, gododgersfan, dialj, jwgators, copperjj, larryp, hookem, boopotts, crimsontider, rogermnj, swartz1, Counselor

    Always buying Bobby Cox inserts. PM me.


  • << <i>

    << <i>I spent a little over $4000 for that same Molitor 1 year ago in the DMitri Young auction and very clearly remember a few heckles from board members about the price I paid. And of course there were many other cards sold in that auction that had experts from the forum shaking their heads saying they couldn't possibly hold their value. I wonder what all those same cards would go for right now. >>



    I too remember the hecklers in that thread and I'm glad that time has proven you correct (at least over the short-run). Even without the recent spike in low pop psa 10's, I think you'll do well over the long-run with your purchase, simply because it has Dmitri's name on the flip. That auction has taken on a special place in collecting history, and I think collectors want to have a piece of that auction in their collection. >>



    +1
    The greatest trick the devil ever pulled was to convince the PSA 10 collector he didn't exist.

    DaveB in St.Louis
  • GB5HOFGB5HOF Posts: 590


    << <i>

    << <i>I spent a little over $4000 for that same Molitor 1 year ago in the DMitri Young auction and very clearly remember a few heckles from board members about the price I paid. And of course there were many other cards sold in that auction that had experts from the forum shaking their heads saying they couldn't possibly hold their value. I wonder what all those same cards would go for right now. >>



    For the Molly that you spent $4,569.60 on, in the right white border next to U.L. Washington there's a long vertical scratch, that's just on the holder right?

    There's also a dot dead center to the top on the card and two dots to the left of Trammell. My guess is those issues kept the card price a bit down compared to the one that sold recently on ebay, which is the finest example I've ever seen. Yours has fantastic centering, sharp corners, and great coloring ... a solid ten IMO but I think the ebay one that sold is a better example.

    IMO, it's just too easy to shill auctions these days so I don't participate in big dollar ones, either on or offbay.

    As for the bubble, I think it's the unlimited unopened bubble that's burst. The notion that there is an endless supply of material out there. There simply isn't, it's dried up and now people are starting to pay crazy amounts for material ... sometimes even from sketchy sources.

    This will carryover into the graded card market since people simply won't have as many premium examples to send in for grading. >>



    Jesus...its like the guy at the poker table who's not involved in the hand telling the loser of a huge pot how he would have played the hand better.
  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>I think we are in a bubble in almost all asset classes, sports cards being one of them. There's a TON of cash out there looking for a home and it's finding its way into everything. IMO, one of two macroeconomic events will occur:

    1) This Fed policy of ours will lead to a fairly large recession (possible mild depression) within the next 5 years which will cause a significant pullback in the prices of stocks, real estate and most all collectibles.

    2) It will lead to runaway inflation which causes price spikes in everything, though cards benefiting not anywhere near as much as traditional asset classes. On a nominal basis, that might be very good, but in real terms, not remotely impressive. >>




    You do understand that this 'ton of cash' you speak of is being held by banks in the form of reserves, correct? When I read posts like this it makes me suspect that people don't really understand what it is the creates inflationary pressure on a currency.

    Here's a short piece that should help clear up some of the misconceptions I've seen on this board regarding the relationship between QE and inflation. It's not dead-on, but it gives you a general idea of what's actually going on.
  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>

    << <i>

    << <i>I think we are in a bubble in almost all asset classes, sports cards being one of them. There's a TON of cash out there looking for a home and it's finding its way into everything. IMO, one of two macroeconomic events will occur:

    1) This Fed policy of ours will lead to a fairly large recession (possible mild depression) within the next 5 years which will cause a significant pullback in the prices of stocks, real estate and most all collectibles.

    2) It will lead to runaway inflation which causes price spikes in everything, though cards benefiting not anywhere near as much as traditional asset classes. On a nominal basis, that might be very good, but in real terms, not remotely impressive. >>




    You do understand that this 'ton of cash' you speak of is being held by banks in the form of reserves, correct? When I read posts like this it makes me suspect that people don't really understand what it is the creates inflationary pressure on a currency.

    Here's a short piece that should help clear up some of the misconceptions I've seen on this board regarding the relationship between QE and inflation. It's not dead-on, but it gives you a general idea of what's actually going on. >>





    You do understand that that is not the "ton of cash" I'm referring to? Do you believe for one second that we would be having these kinds of results in the sports card world without the explosive results being fueled in the equities markets, which is a direct result of Fed policy? When I read posts like your's, it makes me suspect that people don't really understand the interrelationships within our economy. >>




    OK, I'll bite. What is this 'ton of cash'? And how is it measured? M1? M2?


  • << <i>

    << <i>I think we are in a bubble in almost all asset classes, sports cards being one of them. There's a TON of cash out there looking for a home and it's finding its way into everything. IMO, one of two macroeconomic events will occur:

    1) This Fed policy of ours will lead to a fairly large recession (possible mild depression) within the next 5 years which will cause a significant pullback in the prices of stocks, real estate and most all collectibles.

    2) It will lead to runaway inflation which causes price spikes in everything, though cards benefiting not anywhere near as much as traditional asset classes. On a nominal basis, that might be very good, but in real terms, not remotely impressive. >>




    You do understand that this 'ton of cash' you speak of is being held by banks in the form of reserves, correct? When I read posts like this it makes me suspect that people don't really understand what it is the creates inflationary pressure on a currency.

    Here's a short piece that should help clear up some of the misconceptions I've seen on this board regarding the relationship between QE and inflation. It's not dead-on, but it gives you a general idea of what's actually going on. >>



    The hyperinflation argument is more based on a currency crisis and a loss of confidence in the dollar.
  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>boopotts,

    Are you seriously that dense? Bank reserves don't buy cards. INDIVIDUALS do. And when the markets are rolling high, there's "A TON OF CASH" in people's pockets burning a hole. It's called the 'wealth effect'. Look it up if it's too complicated for you. >>



    Ah, do you know what M1 and M2 are? Because it doesn't sound here like you do. Moving on...

    What is 'this Fed policy of ours' , and why you think the Fed's behavior will lead us into an economic downswing? Also, why we haven't seen any inflationary pressure for the last three years, despite the huge increase in the monetary base?
  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>

    << <i>

    << <i>boopotts,

    Are you seriously that dense? Bank reserves don't buy cards. INDIVIDUALS do. And when the markets are rolling high, there's "A TON OF CASH" in people's pockets burning a hole. It's called the 'wealth effect'. Look it up if it's too complicated for you. >>



    Ah- I get it now. You don't know what M1 or M2 mean. Very well- we move on. As always, thanks for playing. >>





    Even though it's been a few years since I received my Economics degree, I think I have a pretty firm grasp of what such simple concepts are. But I seriously wonder if YOU understand what they mean if you feel the need to inject them in such a superfluous manner. >>



    If I ask you about M1 or M2, and you start screaming about how you're talking about 'individuals and not reserves', then I think I have every right to wonder, since neither M1 or M2 measure reserves.
  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>

    << <i>

    << <i>I think we are in a bubble in almost all asset classes, sports cards being one of them. There's a TON of cash out there looking for a home and it's finding its way into everything. IMO, one of two macroeconomic events will occur:

    1) This Fed policy of ours will lead to a fairly large recession (possible mild depression) within the next 5 years which will cause a significant pullback in the prices of stocks, real estate and most all collectibles.

    2) It will lead to runaway inflation which causes price spikes in everything, though cards benefiting not anywhere near as much as traditional asset classes. On a nominal basis, that might be very good, but in real terms, not remotely impressive. >>




    You do understand that this 'ton of cash' you speak of is being held by banks in the form of reserves, correct? When I read posts like this it makes me suspect that people don't really understand what it is the creates inflationary pressure on a currency.

    Here's a short piece that should help clear up some of the misconceptions I've seen on this board regarding the relationship between QE and inflation. It's not dead-on, but it gives you a general idea of what's actually going on. >>



    The hyperinflation argument is more based on a currency crisis and a loss of confidence in the dollar. >>



    Fair enough. And where, exactly, is the evidence for this impending loss of confidence in the dollar?
  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>

    << <i>
    If I ask you about M1 or M2, and you start screaming about how you're talking about 'individuals and not reserves', then I think I have every right to wonder, since neither M1 or M2 measure reserves. >>




    First off, I don't "scream", I capitalize for emphasis. Secondly, why ask me about such an irrelevant topic? You first brought up the topic of "reserves" with your comment of:

    "You do understand that this 'ton of cash' you speak of is being held by banks in the form of reserves"

    or did you not write that? Tough to tell with your silly need to edit so many of your nonsensical postings. >>



    Just to recap:

    1) You said that people are flush with cash, owing to large returns from equities.
    2) I asked you for some evidence for this influx of cash into the economy, and asked if you were going to direct me to M1, or M2, or some other measure for money, to back up this claim.
    3) You said that you were talking about individuals, and not reserves, which would imply that M1 or M2 are irrelevant because they measure reserves.

    That, I think, is a fairly faithful accounting of the discussion to date. But no matter. I'm actually willing to have this talk, but before I get any deeper into this I'll ask you to answer the questions I posed above.

    1) People have been warning that runaway inflation is just around the corner ever since QE2, and yet is hasn't happened- and, as evidenced the price of the T10 year, the market isn't expecting runaway inflation anytime soon. Why do you think this is?

    2) What is a liquidity trap?

  • BoopottsBoopotts Posts: 6,784 ✭✭

    If I ask you about M1 or M2, and you start screaming about how you're talking about 'individuals and not reserves', then I think I have every right to wonder, since neither M1 or M2 measure reserves. >>




    First off, I don't "scream", I capitalize for emphasis. Secondly, why ask me about such an irrelevant topic? You first brought up the topic of "reserves" with your comment of:

    "You do understand that this 'ton of cash' you speak of is being held by banks in the form of reserves"

    or did you not write that? Tough to tell with your silly need to edit so many of your nonsensical postings.


    ////////////////////////////////////////////////

    Just to recap:

    1) You said that people are flush with cash, owing to large returns from equities.
    2) I asked you for some evidence for this influx of cash into the economy, and asked if you were going to direct me to M1, or M2, or some other measure for money, to back up this claim.
    3) You said that you were talking about individuals, and not reserves, which would imply that M1 or M2 are irrelevant because they measure reserves.

    That, I think, is a fairly faithful accounting of the discussion to date. But no matter. I'm actually willing to have this talk, but before I get any deeper into this I'll ask you to answer the following questions (one of which I believe I posed above).

    1) People have been warning that runaway inflation is just around the corner ever since QE2, and yet is hasn't happened- and, as evidenced the price of the T10 year, the market isn't expecting runaway inflation anytime soon. Why do you think this is?

    2) What is a liquidity trap?
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