Options
PCGS will loan you 75% of value of your PCGS coins so you can have more opportunites to participate
Frankcoins
Posts: 4,572 ✭✭✭
If this isn't a recipe for an impending collapse...Sounds like the schemes that were outlawed after the 1929 stock market crash. Obviously you would have to buy
only PCGS coins with the borrowed money, so that those coins ALSO would be eligible for loans to buy more PCGS coins which are eligible for loans to buy more PCGS coins
which are eligible for loans to buy more PCGS coins...
Collectors Finance Corp. Offers Increased Loans
- June 5, 2008
(Santa Ana, California) – Collectors Finance Corporation (CFC) has increased its loan-to-value rates to offer collectors and dealers additional cash for loans on PCGS-certified coins held as collateral.
“We’re now lending 75 percent of the value of PCGS-graded generic gold and vintage coins; 65 percent on certified modern coins; and 80 percent of metal value on certified bullion coins,” said Mike Lewis, President of CFC, a division of Collectors Universe, Inc. (NASDAQ: CLCT).
“Our key dealers requested that we increase our loan-to-value rates so they could have more opportunities to participate in the hot market for high-end, vintage coins. We’ve been able to increase these rates for coins because of their recent history of limited negative-price variability and their improved market liquidity.”
The interest rate charged by CFC is Prime Rate plus four percent, and loans can be made for a maximum term of one year.
only PCGS coins with the borrowed money, so that those coins ALSO would be eligible for loans to buy more PCGS coins which are eligible for loans to buy more PCGS coins
which are eligible for loans to buy more PCGS coins...
Collectors Finance Corp. Offers Increased Loans
- June 5, 2008
(Santa Ana, California) – Collectors Finance Corporation (CFC) has increased its loan-to-value rates to offer collectors and dealers additional cash for loans on PCGS-certified coins held as collateral.
“We’re now lending 75 percent of the value of PCGS-graded generic gold and vintage coins; 65 percent on certified modern coins; and 80 percent of metal value on certified bullion coins,” said Mike Lewis, President of CFC, a division of Collectors Universe, Inc. (NASDAQ: CLCT).
“Our key dealers requested that we increase our loan-to-value rates so they could have more opportunities to participate in the hot market for high-end, vintage coins. We’ve been able to increase these rates for coins because of their recent history of limited negative-price variability and their improved market liquidity.”
The interest rate charged by CFC is Prime Rate plus four percent, and loans can be made for a maximum term of one year.
Frank Provasek - PCGS Authorized Dealer, Life Member ANA, Member TNA. www.frankcoins.com
0
Comments
The devil is in the details.
This is not inherently bad but will prove to be so in the first major downturn in the coin market.
I thought we had just learned the lesson twice: dot.com and righ risk home loans.
Repeat after me:
There is not top.
There is no top.
THERE IS NO TOP!!!
You must believe!
<< <i>A very dangerous game, if you ask me....high interest rate and your coins are held as collateral...now tell me in a falling market how you would get out fast enough to save your undies.....this should not be legal! >>
I'd venture a guess that this would be a short term situation and I doubt that we are talking putting up your 1884-O Morgans in PCGS ms63 as collateral.
<< <i>If this isn't a recipe for an impending collapse...Sounds like the schemes that were outlawed after the 1929 stock market crash. Obviously you would have to buy
only PCGS coins with the borrowed money, so that those coins ALSO would be eligible for loans to buy more PCGS coins which are eligible for loans to buy more PCGS coins
which are eligible for loans to buy more PCGS coins...
Collectors Finance Corp. Offers Increased Loans
- June 5, 2008
(Santa Ana, California) – Collectors Finance Corporation (CFC) has increased its loan-to-value rates to offer collectors and dealers additional cash for loans on PCGS-certified coins held as collateral.
“We’re now lending 75 percent of the value of PCGS-graded generic gold and vintage coins; 65 percent on certified modern coins; and 80 percent of metal value on certified bullion coins,” said Mike Lewis, President of CFC, a division of Collectors Universe, Inc. (NASDAQ: CLCT).
“Our key dealers requested that we increase our loan-to-value rates so they could have more opportunities to participate in the hot market for high-end, vintage coins. We’ve been able to increase these rates for coins because of their recent history of limited negative-price variability and their improved market liquidity.”
The interest rate charged by CFC is Prime Rate plus four percent, and loans can be made for a maximum term of one year. >>
omg i NEW they thought they were there own government, they better wake up fast. If they plan on following American government policy they will fall off the map.. This is exactly there view IMO.
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
<< <i>This service has been available in several forms for a while, at least a couple of years. I have no idea how many folks use it, but I suspect that it is mostly for dealers to get capital for their business. >>
well if you are regulating the prices, then the manipulation calls for an sec meeting, and a fraud to devalue, and default...
Class action..
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
Well this is a business and the great USA. I always wondered how some dealers worked their bottom line. Amazes me everyday when I learn something new on the board or CW magazine.
<< <i>
<< <i>This service has been available in several forms for a while, at least a couple of years. I have no idea how many folks use it, but I suspect that it is mostly for dealers to get capital for their business. >>
well if you are regulating the prices, then the manipulation calls for an sec meeting, and a fraud to devalue, and default...
Class action.. >>
I do not know what the heck you are talking about, and I suspect that you do not either.
<< <i>
<< <i>
<< <i>This service has been available in several forms for a while, at least a couple of years. I have no idea how many folks use it, but I suspect that it is mostly for dealers to get capital for their business. >>
well if you are regulating the prices, then the manipulation calls for an sec meeting, and a fraud to devalue, and default...
Class action.. >>
I do not know what the heck you are talking about, and I suspect that you do not either. >>
Ill help you read between the lines, If i control the price of a coin, I am a manipulator.
If i loan you money on a coin, I devalue the coins first, then loan you the money. If Im a buyer of silver American eagles, I crash the prices before I accept them from collectors.. get it?
its called market manipulation, and its illegal...
ps Now bush wants to blow up Iran...
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
<< <i>
<< <i>
<< <i>
<< <i>This service has been available in several forms for a while, at least a couple of years. I have no idea how many folks use it, but I suspect that it is mostly for dealers to get capital for their business. >>
well if you are regulating the prices, then the manipulation calls for an sec meeting, and a fraud to devalue, and default...
Class action.. >>
I do not know what the heck you are talking about, and I suspect that you do not either. >>
Ill help you read between the lines, If i control the price of a coin, I am a manipulator.
If i loan you money on a coin, I devalue the coins first, then loan you the money. Im a buyer of silver American eagles. but before I buy, I crash the prices.. get it?
its called market manipulation, and its illegal... >>
I would like to respond, but first I must attend to black helicopters that are circling my office...
<< <i>
<< <i>
<< <i>
<< <i>
<< <i>This service has been available in several forms for a while, at least a couple of years. I have no idea how many folks use it, but I suspect that it is mostly for dealers to get capital for their business. >>
well if you are regulating the prices, then the manipulation calls for an sec meeting, and a fraud to devalue, and default...
Class action.. >>
I do not know what the heck you are talking about, and I suspect that you do not either. >>
Ill help you read between the lines, If i control the price of a coin, I am a manipulator.
If i loan you money on a coin, I devalue the coins first, then loan you the money. Im a buyer of silver American eagles. but before I buy, I crash the prices.. get it?
its called market manipulation, and its illegal... >>
I would like to respond, but first I must attend to black helicopters that are circling my office... >>
well well well, talk about a total disregard for ethics in business.
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
<< <i>This does not seem much different than buying securities using margin capital from a broker. That is not illegal, so why should this be illegal? PCGS is loaning their money, and have every right to require a certain form of collateral. >>
Because of the direct influences they have across the entire dealer community.
Because they have the ability to control, or make the market. manipulate coin values, as per the price guide, and there connections with all of the above.
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
<< <i>When you are a coin grader and there are only two that really count and you being regarded as the Highest or most valued Grading company which makes a market in coins, yes there is a conflict of interest here! It only makes the hobby look bad and full of scams! >>
correction not look bad, IS BAD. Is full of scams...
PS. CNBC used the Armageddon WORD AGAIN..
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
<< <i>
<< <i>
<< <i>
<< <i>
<< <i>
<< <i>This service has been available in several forms for a while, at least a couple of years. I have no idea how many folks use it, but I suspect that it is mostly for dealers to get capital for their business. >>
well if you are regulating the prices, then the manipulation calls for an sec meeting, and a fraud to devalue, and default...
Class action.. >>
I do not know what the heck you are talking about, and I suspect that you do not either. >>
Ill help you read between the lines, If i control the price of a coin, I am a manipulator.
If i loan you money on a coin, I devalue the coins first, then loan you the money. Im a buyer of silver American eagles. but before I buy, I crash the prices.. get it?
its called market manipulation, and its illegal... >>
I would like to respond, but first I must attend to black helicopters that are circling my office... >>
well well well, talk about a total disregard for ethics in business. >>
PCGS does not control the market value of PCGS graded coins. PCGS is lending people money based on the value of their coins, as collateral. There are other companies, including NGC and Heritage, that will do the same thing. In a complete sentence, preferably with proper syntax and spelling, show me with proof or real life examples where there is an ethical issue, and I will chase away the black helicopters and address the issue.
I think if there were a problem with this, we would have heard about it in this very forum. Every other complaint, big or small, eventually bubbles up here.
<< <i>I think if there were a problem with this, we would have heard about it in this very forum. Every other complaint, big or small, eventually bubbles up here. >>
You just did hear it.
Like every other American, blinded, and passive to what is reality.
Like I said, its a community of dealers. Like a credit union, or a central bank.
I don't need proof, because I clearly see my point of view as being a valid one.
You can continue on the path to darkness, but I will continue to seek the light..
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
If the market starts slowing down, then they'll probably just readjust their loan-to-value limits.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
<< <i>ps Now bush wants to blow up Iran... >>
Ah, yes. Somehow I knew this was all his fault.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
Camelot
<< <i>You have to have pretty crappy credit if you can't borrow money for better than prime plus 4%. >>
Prime plus 4% isn't a terrible rate for an unsecured bank loan, but for a secured loan it's terrible. Though in reality if I loved debt that much, I could take a cash advance on my Amex at prime + 0%.
In honor of the memory of Cpl. Michael E. Thompson
<< <i>This is not a new program. However, I think one might infer how accurate PCGS believes their own price guide to be by looking at the percentage-to-value loans they will make. In a scenario where there is a default on the loan it will be up to PCGS to liquidate the material, so they cannot loan more money than the material is actually worth or they expose themselves to additional losses. This means that their 75%, 65% and 80% loan limits might be used to give a qualitative feel of the market relative to their quantitative price guide. >>
I also wonder if these loan limits will be reduced downward if the market starts to get significantly softer. -- and trigger "margin calls" to make the downward trajectory even more pronounced.
<< <i>This does not seem much different than buying securities using margin capital from a broker. That is not illegal, so why should this be illegal? PCGS is loaning their money, and have every right to require a certain form of collateral. >>
There is a potential conflict of interest, since the company that loans the money is also able to influence the value of the collateral.
Loosen the grading just a tad, especially on modern 70s, and the value of ther collateral would drop enough that your
loan would be called in, and unless the borrower was able to put up more cash, his coins would be liquidated.
The flip side, would your raw coins have a chance to receive the grade they really deserved iif it
meant that adding to a pop 1 coin would mean that PCGS would be subjecting themself to market losses
on the coins they hold as colateral?
And PCGS also owns the Certified Coin Exchange. An exchange also has some power to manipulate prices
through their membership requirements and trading rules.
When the government wanted to step in 15 years ago and regulate the coin market, requiring a 1099 form
on every coin transaction, and making proposed rules that coins could be sold only through "registered brokers,"
the grading services and big dealers (through ICTA and the PNG) were able to
stop it by arguring BUT COINS ARE COLLECTIBLES, NOT SECURITIES!
Such an argument could not be made today to a government desperate for revenue.
San Diego, CA
<< <i>Where is the SEC?
Coins aren't governed under securities law, so the SEC would have no jurisdiction. If any government alphabet soup agency had any jurisdiction, it would most likely be the FTC, I think.
As long as PCGS doesn't control the market in tin foil hats, you'll be fine.
Russ, NCNE
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
<< <i>
<< <i>This does not seem much different than buying securities using margin capital from a broker. That is not illegal, so why should this be illegal? PCGS is loaning their money, and have every right to require a certain form of collateral. >>
There is a potential conflict of interest, since the company that loans the money is also able to influence the value of the collateral.
Loosen the grading just a tad, especially on modern 70s, and the value of ther collateral would drop enough that your
loan would be called in, and unless the borrower was able to put up more cash, his coins would be liquidated.
The flip side, would your raw coins have a chance to receive the grade they really deserved iif it
meant that adding to a pop 1 coin would mean that PCGS would be subjecting themself to market losses
on the coins they hold as colateral?
And PCGS also owns the Certified Coin Exchange. An exchange also has some power to manipulate prices
through their membership requirements and trading rules.
When the government wanted to step in 15 years ago and regulate the coin market, requiring a 1099 form
on every coin transaction, and making proposed rules that coins could be sold only through "registered brokers,"
the grading services and big dealers (through ICTA and the PNG) were able to
stop it by arguring BUT COINS ARE COLLECTIBLES, NOT SECURITIES!
Such an argument could not be made today to a government desperate for revenue. >>
Everything you said is valid, looks like a loop hole that can be, and has been extorted..
A loophole is a weakness or exception that allows a system, such as a law or security, to be circumvented or otherwise avoided. Loopholes are searched for and used strategically in a variety of circumstances, including taxes, elections, politics, the criminal justice system, or in breeches of security.
A loophole in a law often contravenes the intent of the law without technically breaking it. For example, in some places, one may avoid paying taxes to the jurisdiction by forming a second residence in another location, or a commercial property can be built in a residential zone if it is made also for residential use.
In a security system, the one who breaches the system (such as an inmate escaping from prison or a terrorist) exploits the loophole during breach. Such weaknesses are often studied in advance by the violator, who spends time observing and learning the routine of the system and sometimes conducts surreptitious tests until such a loophole can be found.
An example of a legal loophole:
* In 2005, Wal-Mart planned a store in Calvert County, Maryland. While a law in the county restricted the size of a retail store to 75,000 square feet, Wal-Mart considered a plan that would dodge this restriction by building two separate smaller stores. Though Wal-Mart later withdrew this controversial plan[1], the plan highlighted a legal loophole.
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
<< <i>In 2005, Wal-Mart planned a store in Calvert County, Maryland. While a law in the county restricted the size of a retail store to 75,000 square feet, Wal-Mart considered a plan that would dodge this restriction by building two separate smaller stores. Though Wal-Mart later withdrew this controversial plan[1], the plan highlighted a legal loophole. >>
A better "loophole" would be to build Wal-Mart super centers just across the county line, so the geniuses in county government could watch its own citizens paying their tax dollars elsewhere.
You don't borrow money using this kind of service for long term collecting.
TRUTH
<< <i>
<< <i>In 2005, Wal-Mart planned a store in Calvert County, Maryland. While a law in the county restricted the size of a retail store to 75,000 square feet, Wal-Mart considered a plan that would dodge this restriction by building two separate smaller stores. Though Wal-Mart later withdrew this controversial plan[1], the plan highlighted a legal loophole. >>
A better "loophole" would be to build Wal-Mart super centers just across the county line, so the geniuses in county government could watch its own citizens paying their tax dollars elsewhere. >>
'
example, if you slab a modern bullion gold eagle, and give it a grade, it is now a collectible, and not a security.
See? Its now a collectible, and not a security. In truth its A manipulated loop hole that technically makes that gold coin a security.
PS. I found an un-cashed payroll check dated 9 months ago and cashed it without a hitch....
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
Dave