Cash concerns spur some to part with collector's items
Arizona Coin Collector
http://www.chicagotribune.com/business/chi-sun-selling-stuff-1228dec28,0,5462691.story
Cash concerns spur some to part with collector's items
Financial worries are forcing collectors to turn prized possessions into
money
By Susan Chandler
Tribune reporter
December 28, 2008
For years, Chicagoan Ken Angle collected watches
with fancy names like Hermes and Cartier. As a
corporate recruiter for a Texas company, he
enjoyed wearing his timepieces whether he was
interviewing a prospective candidate or relaxing
over a weekend dinner.
Angle never thought of his watch collection as a
rainy-day fund, but it has turned into something
like that.
He has been selling off a sizable chunk of his
collection, banking most of the proceeds while
using some to help friends struggling to pay
utility bills or make car payments. "I have
started to re-evaluate what I need," said Angle,
55, who retired early. "It is smarter to have
the cash and in the bank versus having it in a
drawer."
A 56-year-old Chicago stockbroker also is
reassessing her stuff as she faces a 5-10 percent
decline in her 2008 income and a potentially
bleaker 2009. The broker, who didn't want to be
identified, recently auctioned off about $5,000
worth of jewelry. And instead of buying earrings
at Neiman Marcus, she paid off bills from a
basement renovation. "The thing is to move
forward," she said. "The basic thing is you can't
take it with you."
Maybe you can't even afford to keep it.
Plenty of people facing financial pressure are
boosting their personal liquidity by disposing
of personal possessions.
Comic Carnival Entertainment, a chain of comic
book stores in Indianapolis, says it has seen a
surge in customers looking to sell their Spiderman
and Hulk collections. Sotheby's, the New York
auction house, reports the number of clients
looking to borrow against the value of their art
collections has risen sharply.
And Guitar Center, the musical instrument and
equipment store, says that almost 50 percent of
5,000 customers surveyed recently reported they
were likely to sell a musical instrument in the
next six months. Nearly a third said they were
"very likely" to sell.
"They're using it as a type of currency," said
Norman Hajjar, Guitar Center's chief marketing
officer.
Vernon Kagan, founder and owner of Smart Jewelers,
is convinced enough of the trend's staying power
that he is opening a mini-mall in Lincolnwood
where customers can walk in and sell coins, paper
money, gold, jewels, sterling silver and musical
instruments.
"If someone needs their money right away, they
get it," Kagan said.
In economic terms, these folks are dealing with
the credit crunch by creating their own
liquidity. They are financing themselves rather
than running up debt on their credit cards or
digging deeper into their home-equity lines.
They may not have a choice if their cards are
maxed out or their credit limits have been reduced.
It's a short-term coping strategy for people
who have items that can readily be converted into
cash, said University of Chicago economist Allen
Sanderson. And it may be helping some households
stay afloat, especially when the holidays add
extra expenses when incomes are flat and job
security is wobbly.
Most people have far more assets than income,
Sanderson points out, usually five or six times
as much. So a person earning $50,000 a year
probably has $250,000 to $300,000 in assets, a
good chunk of that likely in the form of real
estate.
"Most people are not getting big raises," he
said. "How do I pay for the kids' college or the
vacation in St. John? I convert assets into
something I can spend this year."
But the law of supply and demand is coming into
play. When lots of people are selling and fewer
people are buying, prices come down.
That was evident at major art auctions at
Sotheby's and Christie's in mid-December.
Paintings by famous names such as Monet, Matisse
and Warhol went unsold while other works fetched
far less than their pre-sale minimum estimates.
The sale of a 1964 self-portrait by Francis Bacon
was halted by Christie's when bids reached $27
million, well below the work's $40 million estimate.
Sixteen rare Abstract Expressionist drawings owned
by Kathy and Richard Fuld, the recently fired
chief of Lehman Brothers, drew bids totaling only
$13.5 million at Christie's auction Nov. 12, well
below the $15 million to $20 million presale
estimate.
Eli Broad, the billionaire art collector who was
there scooping up relative bargains, joked that
Sotheby's Nov. 11 auction was a "half-price sale."
At a much different price level, comic book
collectors may be walking away disappointed after
testing the market for their treasures.
Comic Carnival's four stores in Indianapolis are
fielding 20 to 30 calls a day from collectors who
are hoping to cash in part of their holdings.
Most of the time, general manager Brad Keen has
bad news for them. The books they bought during
a comic boom in the 1980s and '90s aren't in big
demand. The four-store chain is more interested
in comics from the 1970s and earlier, which are
rarer and have bigger fan bases. A copy of Hulk
181, which features one of the first appearances
of the character Wolverine, in good condition
might sell for $1,000, for example.
"I hate telling people that something they're
banking on is something I can't afford to put
money into," Keen said. "Nobody has been angry.
They seem to understand. If I can't sell it, I
can't sell it."
Calls began to pick up last summer, he said, and
really accelerated before the holidays.
An auction house in Ontario, Canada, that
specializes in high-end performance and vintage
cars also is getting more calls from prospective
sellers. People aren't saying why they want to
sell, but one thing they've noticed is more cars
are being consigned to auction without a reserve
price, which means the seller is giving up
protection if bids come in lower than expected.
"Sometimes your boat, your motorcycle, all the toys
have to go," said Terry Lobzun, a spokesman for
RM Auctions. The upside, he added, is, "There are
some great values in the market if you want to put
yourself into something tangible. Paper can zero
out. A car will never be worth nothing."
Sometimes people under financial pressure want to
use their stuff to raise cash but don't want to
part with it.
Those with pricey art collections are likely to
call Jan Prasens, the managing director of
Sotheby's Financial Services, which makes loans
against the value of artwork, which is the
collateral for the loan.
"We are definitely seeing people calling more
to see if we are willing to lend against some
of their properties," Prasens said. "We are
lending, but we are extremely selective. We see
a lot of demands on our capital, which is
extremely precious."
Typically, Sotheby's would lend someone 50
percent of the appraised value of their art,
but with prices falling, borrowers may no longer
be able to get that amount. Also, Sotheby's is
shifting its focus toward art that will be
auctioned in the near future, providing owners
with "bridge loans" until the proceeds come in.
The New York firm is less interested, Prasens
said, in making loans against collections that
aren't slated for sale, which he referred to
as "term loans." Unfortunately for
cash-strapped collectors, that is the type of
loan most in demand right now.
There is also bad news for anybody hoping to
trade in a family heirloom such as an armoire or
dining room set. Antique furniture, known as
"brown furniture" in auction parlance, is out of
fashion and not fetching much these days, says
Leslie Hindman, owner of Leslie Hindman
Auctioneers in Chicago. You can't get much for
19th Century German landscape paintings either.
"I talked to somebody . who has nice English
furniture that is not important at all. I told
her you're not going to get an enormous value
for it, but I don't think it will appreciate
much over the next five years. So your choice
is to sell it for what it's worth or keep it,"
Hindman said. "Her feeling is she has been
storing it forever and she wants to turn it
into cash."
..
Mr. Jaggers
> FROM:
> http://www.chicagotribune.com/business/chi-sun-selling-stuff-1228dec28,0,5462691.story
>
> Cash concerns spur some to part with collector's items
>
> Financial worries are forcing collectors to turn prized possessions
> into money
[article snipped]
My observation so far has been that prices continue to increase for coins
that I still wish to acquire. Perhaps it just takes longer for a down
economy to drag coins down with it. In one of Richard Nachbar's recent ads,
though, he talks of a developing slump in coin prices. It's the first such
suggestion I've seen in the coin press.
James
RWF
"Mr. Jaggers" <lugburzman[at]yahoo[dot]com> wrote in message
news:gj80o...@enews4.newsguy.com...
Of course, Mr. Nachbar has been announcing his retirement for the last
several months also.
stonej
but it has been a year since I bought anything
as well for my collection. I have been tempted more than once but
in the end decided I could live without it.
The longer the recession drags on it will probably start to affect the
coin market as well.
mazorj
"Mr. Jaggers" <lugburzman[at]yahoo[dot]com> wrote in message
news:gj80o...@enews4.newsguy.com...
It's probably a combination of factors. We've already discussed the
disconnect between numismatic buying of gold & silver coins at prices
significantly higher than gold & silver prices on the commodity
markets. Most of the people who started acquiring more melt and
collectible coins as a hedge against worries about the dollar probably
are still buying from those who are having to sell for financial
reasons. For high end coins, we know that many high-end products are
among the last to feel the pinch. (Millionaires still have money to
burn for their favorite activities.) And many industries, such as
certain transportation sectors, can lag the economy's general
performance by six months to a year.
BTW, welcome back to the numismatic Bedlam, James. The inmates can't
completely take over the joint unless we let them.