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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br><br><br><br>As many of you know, more than a year ago, we<br><br>predicted that the Dow would fall below 7500 and<br><br>that several major investment banks would go bankrupt.<br><br><br><br>Many of our posts reflect our strong belief that the US will face<br><br>a depression between 2009-2012. Baseball card prices, with some<br><br>notable exceptions are likely to fall- perhaps as much as 25%-35%<br><br><br><br>A number of auction houses will close because collectors will stop selling.<br><br><br><br>However, there is a strong possibility that a far more tragic scenario<br><br>will develop.<br><br><br><br>For argument sake, let us assume the announced US Government investigation<br><br>into price manipulation and alteration of cards moves ahead rapidly and there<br><br>are formal Indictments.<br><br><br><br>Let's all assume the government decides to seize all the property of the auction<br><br>houses and or grading service that has been indicted.<br><br><br><br>What is the position of the consignor with regard to items seized by the Government? <br><br><br><br>If he or she has received an advance, do they have to return it?<br><br>How can he or she get his cards back?<br><br>Is there any insurance available that will protect collectors or consignors?<br><br><br><br>If and when this "perfect storm" occurs, how will impact the future of the<br><br>hobby?<br><br><br><br>The purpose of this post is not to argue the state of the economy and/or<br><br>how bad things are likely to get, but rather to raise the question of how<br><br>is the collector protected when and if an auction house <br><br><br><br>(a) Is indicted by the government and property is seized?<br><br><br><br>(b) Auction house closes its doors before an auction is completed<br><br>and said auction house has consignments from collectors.<br><br><br><br>Our hobby must prepare for a worse case scenario- who knows, our own<br><br>version of Bernie Madoff could be on the Board as we speak.<br><br><br><br><br><br>Best wishes for the New Year!<br><br><br><br><br><br>Bruce Dorskind<br><br>America's Toughest Want List<br><br><br><br><br><br><br><br><br><br><br><b r><br><br>
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Hobby Panic in 2009
Posted By: <b>Rick McQuillan</b><p>Bruce, interesting questions. What happens if an auction house closes within a week or two AFTER an auction? The money will come in, but will the consigners be paid and will the winners receive their items?<br><br>Rick
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Hobby Panic in 2009
Posted By: <b>barrysloate</b><p>Bruce- why spread such gloom when it is merely speculative? I don't expect 2009 to be a great year either, but let's all at least be a little more hopeful.<br><br>P.S.- please no private email, just post your response on the board. For the record, I am tired of receiving private emails when I post on Net54. My 2009 resolution is I will delete them all unread. Thank you all for understanding.
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br><br><br><br>Barry<br><br><br><br><br> <br><br><br>We don't have to spread doom and gloom<br><br><br><br><br><br><br><br>CNN, Business Week, The New York Times etc, are far ahead<br><br><br><br>of us in this arena.<br><br><br><br><br><br><br><br>The fact is that the Hobby is certain to face the most difficult<br><br><br><br>year in its history and with a pending government investigation,<br><br><br><br>we should be prepared to address the question of what happens<br><br><br><br>if and when items consigned to a major auction house or items<br><br><br><br>currently being graded are seized by the government.<br><br><br><br>In this case where the Auction House takes a long time to pay consignors<br><br>the Government could seize the payments for the auction lots before the<br><br>consignors have been paid. In this case a consignor would have lost both his/her<br><br>consigned card and the money due to him from the auction house.<br><br><br><br><br><br><br><br>This may be a worse case scenario but one we will predict will occur<br><br><br><br>at least once in 2009. The dark clouds preceding the "perfect storm"<br><br>are clearly on the horizon. <br><br><br><br><br><br><br><br>Best wishes for the New Year!<br><br><br><br><br><br><br><br><br><br><br>< br>Bruce Dorskind<br><br><br><br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>Eric Pugh</b><p>I would love it if prices dropped - I could finally get tons of stuff that has been out of my price range. Great post Bruces!
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Hobby Panic in 2009
Posted By: <b>barrysloate</b><p>I know that 2009 is going to be a very rough year, but in your BST post you wrote that the great depression is around the corner. That is a very extreme scenario among many that may play out. And several great economists will disagree with the severity of that prediction.<br><br><br><br>As far as auction houses under investigation I only know of one at the moment. I suppose the government has the right to seize all consignments, but why would they?
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br><br>Barry<br><br><br>We are raising two very important questions.<br><br>If the Government seizes the assets of an auction house<br>or grading company, our question is what happens to the items<br>that have been consigned or what happens to payments to the auction<br>house that have yet to be distributed to the consignors?<br><br>We believe that if the auction has goes bankrupt the consignor is<br>a creditor just like everyone else. The decision may rest on both<br>state law and the auction contract with the consignor.<br><br>One should not under-estimate either the probability of a depression<br>or very severe recession nor the probability that an auction house<br>could either be seized or file for bankruptcy<br><br>That's our final comment on your point<br><br><br>Bruce Dorskind<br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>marshall barkman</b><p>Bruce....i am trying to figure out if you are related to Bruce Pardo. All joking aside i recently sent cards to auction and they blew out like a Nolan Ryan fastball. People were able to make alot of money from 2002 -2006 and got spoiled with a very positive and credit-cash flowing economic upswing. I think things are just leveling off and prices of all antiques not just cards are going to go with the flow of the economic wave. I can honestly say the current recession has not affected me at all in a negative fashion, possibly you should do some research into Warren Buffet's thoughts and why he is investing mad cash when everyone else is reaching for the panic button. There is a reason why the rich keep getting richer and it is not luck or good fortune. A friend of mine bought a piece of real estate for 290,000 in 2001 and flipped in 2005 for 540,000 and now the property is on the market for 320,000. Things are never as good as it seems when you are rolling and also never that bad when you are down. I like your posts though because it makes things easier for guys like me to buy espensive cards. I'm quite sure though that anyone wanting to have a auction is not going to like the post. I think you have been hanging out with Randolph Duke to much "Sell Mortimor Sell" MB
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Hobby Panic in 2009
Posted By: <b>barrysloate</b><p>I'm just trying to understand why the government would seize consignments. Wouldn't that be penalizing innocent victims who are not party to an investigation?<br><br>I do agree that if an auction house went bankrupt then consignors would likely have a hard time recovering their material. That is always a risk, in any area of business.
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Hobby Panic in 2009
Posted By: <b>Paul</b><p>I always look forward to the new year with optimism. 2008 wasn't a good year for my family in the health area, & my IRA's took a beating. To hell with this doom & gloom stuff.
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Hobby Panic in 2009
Posted By: <b>Lance</b><p>WE are concerned. If and when our dog decides to eat a favorite rare card or cards, when the pieces are "retrieved", are WE ethically allowed to tape or glue the pieces back together? If so, WE were wondering if the said card or cards would be considered more rare do to "limited" production or would they become "reproductions"? Our final concern is weather or not the "new" card would be worthy to be graded?<br><br>...all in fun!<br><br>Be happy!<br>Lance
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Hobby Panic in 2009
Posted By: <b>Joe D.</b><p>Bruce,<br><br>If the government seizes the building you live in..... where would you live?<br><br><br><br>You seem to have a lot of fear or are spreading a lot fear.....<br><br><br>I want to help you out. <br>Since you believe a depression is right around the corner, it must be a great time to divest of your cards.<br><br>Please send a list of what you have and your bottom <br>line asking price in confidence to <br><br>joe@internetville.com<br><br><br>
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Hobby Panic in 2009
Posted By: <b>Pennsylvania Ted</b><p>As long as INTEREST rates stay LOW....they are now the lowest (4%) in many a moon....Collectibles will thrive and flourish.<br><br>Let's take a lesson from recent history. In 1979 - 82 when inflation was 14%......interest rates were 20%....and, unemploy-<br>ment was 10%, we were suffering and Collectible values took a severe dive.<br><br>We are in a "recession", not a "depression" ! ! So, calm down, you gloom and doom naysayers.<br><br>Now, if Paulson (and Co.) continues with these Government bailouts......we will be in trouble. FDR exascerbated the 1929<br> depression, and it dragged out for years, by doing exactly what Paulson has been doing since October.<br><br>Let the free market prevail....and, it will correct the economy....much sooner than the Government can.<br><br>If, I am wrong and BB card values diminish....I, for one, will welcome this....as it is an opportunity to buy more BB cards. <br><br>It's a "WIN - WIN" situation.<br><br>
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Hobby Panic in 2009
Posted By: <b>john/z28jd</b><p>Why do I have a feeling this thread was merely the starting point for "Bruce,Bruce and Bruce's auction house, complete with recession protection for your collection!"<br><br> Just let me know when the bottom falls out of the hobby,I got some Old Judge cards I'd love to be able to afford
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Hobby Panic in 2009
Posted By: <b>Brian</b><p>Trust<br><br><br><br><br><br><br><br><br>no<b r><br><br><br><br><br><br><br><br><br><br>one<br>< br><br><br><br><br><br><br><br><br><br><br><br><br ><br><br><br><br>Best wishes for the New Year! <br>
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br>FYI<br><br>We are not, nor have we have ever been in the auction business.<br><br>We are interested in learning about your strategy for a recession<br>proof methodology to protect one's cards.<br><br>In the interim, no one has answered the important question we raised<br>which is what happens to the consignor if the Auction House is either<br>indicted or files for bankruptcy?<br><br>We are quite certain that one, possibly both of these events will<br>occur in 2009.<br><br>It is not doom and gloom, but reality.<br><br>We also disagree with Frank's post with regard to low interest rates ensuring<br>the value of collectibles.<br><br>Bruce Dorskind<br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>barrysloate</b><p>I wouldn't want to be a consignor with an auction house that declares bankruptcy, as it could be genuinely difficult to get your material back. But does anybody know auction law?<br><br>And as far as the government shutting down an auction house and seizing material, I would like to know why they would do that.
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Hobby Panic in 2009
Posted By: <b>ralph</b><p> I would not be too upset if the bottom dropped out of the baseball card market.<br> For over 25 yrs Ive collected because I enjoy it,..yes Ive spent lots of money on the stuff over the years ( way less then some,way more then others),but it would not change the fact that I simply enjoy collecting old baseball cards,no matter what the price guides say. Of course the other key reason,is Ive always collected off grade cards...Ive never spent over $300 on any one card
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Hobby Panic in 2009
Posted By: <b>Scott Dango</b><p>if you are worried about a recession, then you have no business collecting cardboard....especially old cardboard...<br><br>although many people may be affected by a recession, not all people are...and it seems to me, people who are are not affected by the recession are also the ones with the disposable income to sink into expensive cardboard...<br><br>SO, its not like people on this board get food stamps, or are worried they may lose there jobs....because if they were, they wouldnt be here...<br><br>SO, you post seems like a hot stake poking around looking for an eye...
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Hobby Panic in 2009
Posted By: <b>Al C.risafulli</b><p>I would imagine that a consignor who has material with an auction house that gets shut down by the government would have to wait for things to get sorted out, but they will get sorted out and the consignor will get his/her material back. Not sure how long this would take, and I'm sure it would be uncomfortable for those people.<br><br>As far as bankruptcy goes, I would think that would be less of a concern, particularly if it's a Chapter 11 bankruptcy. I would imagine that in a case like that, the auction house would continue doing business while it reorganizes, with consignors receiving payment for their material. More of a concern would be the timeliness of that payment, coupled with a loss of bidder confidence that might result in lower hammer prices.<br><br>I do not see a major panic happening with respect to the hobby, however. The autograph business seems to continue thriving, despite all the Federal investigations into that business and the resulting doom-and-gloom. I remember reading at one point that as much as 70% of autographs could be fake. Doesn't seem to stop people from shelling out big dollars for them.<br><br>Ultimately a shakeout in the hobby will likely result in the more reputable auction houses gaining market share. That would be a good thing for us as consignors and as bidders, as it always inspires confidence to deal with a reputable firm.<br><br>As far as a "depression" is concerned, I am no economic genius, but I don't see it happening. We have a long, long way to go before unemployment reaches the levels to trigger a true panic or a very lengthy downturn. Those of us who are involved with this hobby for the sheer joy of immersing ourselves in the history of the game and its collectibles will benefit from those of us who are involved in the hobby for investment purposes, and therefore panic about the value of their investments deteriorating. My limited experience indicates that panic selling of ANY investment is not a great idea if you're a long-term investor; those people getting out of the hobby will only create buying opportunities for those of us who view this as more of a hobby. I'm not saying there's a right or a wrong way to collect - there isn't - but I am saying that as long as there are sellers, there will be buyers.<br><br>-Al
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Hobby Panic in 2009
Posted By: <b>Tony Andrea</b><p>Bruce ,<br>I think now would be a good time to walk over to the window, open it and take a deep breath of the fresh morning air and think of good thoughts for a change.<br>I think what were getting at here is there's more to life than the constant doom and gloom thoughts we seem to hear about from you much to often. <br>"Family", "Friends", "Health", and just seeing the sun come up every morning is enough for me. I think you need to ask yourself, "is this enough for you". <br><br>Best Wishes for a Healthy & Happy 09 to all,<br><br> Tony Andrea
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br>We suspect that by mid Spring when we open the window we will be witnessing<br>a number of New Yorkers jumping out of their windows...and not because the value of their cards<br>went down<br><br>We appreciate all we have. We simply want to understand what position and options<br>a consignor has if something happens to an auction house before he/she is paid?<br><br>That is a fair question and one which is quite relevant at a time when the Government<br>is aggressively pursuing several major players in the industry and the economic climate<br>is likely to serve as a catalyst for a number of business closings.<br><br>We wish you a Happy New Year as well. Hope that you will lower some of your<br>BIN prices-<br><br><br>Best<br><br><br>Bruce Dorskind<br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>George HC</b><p>Are the Bruces expecting any body fluids mixing in 2009?
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Hobby Panic in 2009
Posted By: <b>Jimmy</b><p>THE NEW PRESIDENT WILL NOT HAVE THE TIME OR MONEY TO DEAL WITH ISSUES SUCH AS BASEBALL CARDS. THE NEW HEAD OF THE FBI WILL PASS HIS INFORMATION TO SMALLER DEPARTMENTS, AND THEN IT WILL BE BARRIED UNTIL SOMEONE WANTS THE JOB OF THE INVESTIGATION. THERE IS TOO MUCH GOING ON RIGHT NOW AND MOST OF THIS TALK WILL BE PUSHED ASIDE!!! <br><br><br><br>I do agree that there will be many changes in our hobby, but it will not include the federal government. I would like to see more happen because many other parties involved with some of the statements mentioned should be held accountable for their actions. <br><br>also Brain made a could point "trust" will be a very important word next year! I am starting to lose trust in a lot of the areas in the hobby.<br><br><br>Jimmy<br><br>
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Hobby Panic in 2009
Posted By: <b>keyway</b><p>WE ARE !!DOOMED!! Chill out for god sake. No need to panic until problems happen. Frank
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Hobby Panic in 2009
Posted By: <b>peter ullman</b><p>While such a scenario with the gov't seizing baseball cards and memorabilia is absolutely ludicrous...it can't be anywhere near the top of their priority list these days...my plan to safeguard my collection is not to sell any of it through major auction houses. In fact...I'm just going to leave all of my cards in their respective shoeboxes!<br><br>peter ullman
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Hobby Panic in 2009
Posted By: <b>leon</b><p>To get straight to the question of what happens to collectibles if an auction house has consignments and is involved in some kind of govt. legal issue? I am no lawyer but I would guess it would take some time but consignors would get their material back. If advances were given on them then that would muddy the waters. I am not sure when "title" to property passes but I don't think an auction house "owns" consignments ...again with respect to advances I am not sure....<br><br>As far as the economy goes....It sucks...will continue sucking for a lot of '09 and then hopefully will get better. Even though I didn't vote for Obama I do have confidence in him....best regards
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Hobby Panic in 2009
Posted By: <b>boxingcardman</b><p>and getting to the only legit questions posed by the Bruces:<br><br><br><br>An auctioneer does not have title to the items consigned to it but acts as agent for the titleholder in transferring title. Consequently, the assets in question are not assets of the auctioneer and should not be considered either an asset of a bankrupt's estate or an asset of the auctioneer for any other purpose. <br><br><br><br>1. If an auctioneer goes bankrupt, the court would establish a claims framework to allow the owners of the consigned materials to come forward and claim their stuff; my guess is a receiver and a claims application procedure. The court would preside over the process. It would take a while but if the items are there, valid and timely claims should be honored. <br><br><br><br>2. If an auctioneer goes BK after the auction, I am not sure of the disposition of the cash but I suspect that a similar answer applies. However, if the auctioneer stole some of the proceeds, the consignors would likely get only a pro-rata share of the remaining cash pool. <br><br><br><br>In either scenario in bankruptcy there would in all likelihood be a heck of a slap fight between the consignors and the other creditors of the auctioneer over ownership and it would definitely take some time before anyone saw any of their stuff or money. <br><br><br>Edited to add: Bankruptcy is all about priorities among creditors feasting on the bankrupt's carcass; the creditors form a "food chain" where the higher the class of creditor the more likely it is to recover. An unsecured general creditor (like the catalog designer who hasn't been paid yet for the work done on the next auction catalog) is the lowest form of life on that food chain; it gets the crumbs after everyone else has eaten. My unresearched hunch is that a consignor whose item is held by the auctioneer would fall into the top tier of creditors, akin to a secured creditor, but I haven't researched it yet. <br><br><br>3. If an auctioneer is indicted, it doesn't necessarily shut down--it would have to be convicted or subject to some sort of provisional remedy. It even might make sense for the auctioneer to run pending auctions under a receiver. If the government did shut it down, my assumption is that a receiver would be appointed to run the auctioneer's affairs and see that any property that wasn't its property would be returned to the owners. Again, it would take time and some work to get your stuff back. <br><br>Sic Gorgiamus Allos Subjectatos Nunc
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Hobby Panic in 2009
Posted By: <b>Al Simeone</b><p>Bruce,<br>Not to be rude but can you please adjust your computer so it types more on the lines ! Its very annoying reading your comments for 50 or so words and the post is 10 inches long. Thanks Bruce just a 2008 observation. As for 2009 we are all in the same boat lets just wait and see what happens! Only time will tell.
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Hobby Panic in 2009
Posted By: <b>leon</b><p>A quick note about spacing issues in posts. The Net54 s/w is doing that when a post is edited. You can still fix it manually but it's up to each poster to preview their post BEFORE hitting the respond button in order to know how it will look after it's posted. I know that many times I will go back and delete spaces in my posts, manually, upon the preview. This problem doesn't start with any poster, as it's a Net54 issue, but it can be easily fixed by deleting the spaces..and anyone can do that to their own post. best regards
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Hobby Panic in 2009
Posted By: <b>Al Simeone</b><p>Hi Leon,<br>Thankyou but maybe Im missing something Some of Bruces posts arnot edited but yet they still come up the same way. I see Barrys post was edited but it comes up the correct way. Why?
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br>Adam<br><br>Great post- Thanks<br><br>Bruce Dorskind<br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>Dan Bretta</b><p>Bruce, you're not related to that Russian analyst who's predicting the US will have a civil war in 2010 are you?
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Hobby Panic in 2009
Posted By: <b>Fred C</b><p><br>Bruce,<br><br>I've actually enjoyed quite a few threads you've started. This one is a bit curious. I for one would not have to worry about my cards being seized because I have the butt ugliest collection of junk. Oh yeah, back to curious - if you really believe that the card market is going down then why is cash king?<br><br><a href="http://www.network54.com/Forum/376259/thread/1230332384/last-1230588973/Cash+Is+King" target="_new" rel="nofollow">http://www.network54.com/Forum/376259/thread/1230332384/last-1230588973/Cash+Is+King</a>...<br><br>Ok, I agree, you were making a generalization and not basing this thread on cards that you are looking to buy. I kind of agree though, there could be a thaw in card prices because of the recent run up. <br><br>Does the possibility of card seizure concern you enough to halt or curtail your card buying? <br><br>Oh, oh, oh - Mr. Kotter, Mr. Kotter... a thought just occurred to me... perhaps, this possible threat of seizure may stop everyone from consigning to the auction houses and we'll see them all shut down because of this mass panic and hysteria you've just started... just kidding Bruce. <br><br>Can you please start a new thread that is inspiring and full of joy and cheer that will allow us to continue to view our world through our rose colored glasses, reality just sucks...
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Hobby Panic in 2009
Posted By: <b>Frank Wakefield</b><p>Unbelievable...<br><br><br><br><br><br>I completely agree with the assessment of the unfortunate present and dismal immediate future for our economy.<br><br><br><br><br><br>To a card collector this should be of minimal impact. I'd liken it to someone who was about to sell a home in once city, then buy a home in another, in a depressed housing market. Big deal if you get less for the house you're selling, because you'll be buying in a depressed market, too. So true collectors can keep on collecting. True collectors weren't accumulating cards to sell anyway. If anything, the economic turmoil might churn some old seldom seen cards out of safety deposit boxes and safes, and into the card market.<br><br><br><br><br><br>Now for card investors... all of the feared woe above may well pan out. I've opined here that cards aren't an investment. Some folks who thought they were may well rethink their position.<br><br><br>Sometimes law enforcement officers seize everything and let the prosecutors and courts sort things out. A consigned card should eventually make its way back to the consignor. Should... and it would take quite some time.<br><br><br>Some of my favorite cards are worth but a few dollars. And the dollar value that folks associate with them is less than a hundredth of other cards I have, of which I think less. <br><br><br><br><br><br>So for collectors, times may well be good.<br><br>
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Hobby Panic in 2009
Posted By: <b>Anthony S.</b><p>Barry,<br><br> email sent.
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Hobby Panic in 2009
Posted By: <b>Rich Klein</b><p>But I do have a legal and a theoretical question:<br><br>The legal q -- is that if you want to protect yourself; can you put in a rider that in case of bankruptcy -- that you will be paid in full if said bankrupty occurs after an auction OR that if the bankruptcy occurs before the auction -- your item will be returned to you (no questions asked)<br><br>The theoretical q is this -- if you truly believe the auction house is going under -- why send them anything?<br><br>Please respond to the board on this -- I have limited access at times to my personal email <img src="/images/happy.gif" height="14" width="14" alt="happy.gif"><br><br>Regards<br>Rich
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Hobby Panic in 2009
Posted By: <b>Fred C</b><p>I retract my last post (thanks to Frank)...<br><br><br><font size="+10">CARDBOARD PANIC - 2009</font> - this is an "absolute certainty" - all card values will drop... your portfolios of cards will be worth 50% - 75% less than what you paid for them in the past few years. Get out NOW... SELL, SELL, SELL!!! There are collectors out there that will help lessen your pain... sell now before the celing is below your floor.....<br>
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Hobby Panic in 2009
Posted By: <b>barrysloate</b><p>Anthony- I'm always happy to get a friendly email from a good soul like yourself; but I get some wacky ones too, and some are rather nasty. Those are the ones that if I sense I don't want to see them I will delete them unread.<br><br>I have a big issue with the private emails and believe that if I say something on the board that a reader doesn't like, he should express his opinion in the same thread. That's my position and I'm sticking to it.
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Hobby Panic in 2009
Posted By: <b>raymond g.</b><p>My comment & concern is the weather in Pasadena Jan. 1st. Will be there for the game, leaving Wed. morning.<br><br>WE ARE
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Hobby Panic in 2009
Posted By: <b>josh</b><p>I think we all know what the original post means. Bruce wants you to panic and sell your cards to him for rock bottom prices.
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Hobby Panic in 2009
Posted By: <b>PC</b><p>The answer is somewhat complicated, and very technical, but here's the short version ...<br><br>Generally speaking, while a "consignor" (e.g., a collector seeking to sell by placing a card with an auction house) technically retains title to the goods (cards) consigned to/with a "consignee" (e.g., the auction house), if the consignee (auction house) filed for Ch. 11 then the goods (cards) consigned become part of the bankrupt consignee's "estate", and would then be available to satisfy the debts owed to the consignee's secured creditors.<br><br>Therefore, if the consignor has not perfected its consignment security interest (by filing a UCC-1 in the right jurisdiction that identifies the goods he consigned), and the consignee (auction house) then goes bankrupt, the consignor is pretty much out of luck ... he is treated as an unsecured creditor by the bankruptcy court, and will probably get nothing if the consignee has any secured debt outstanding. The cards he consigned could be sold by the bankruptcy trustee to pay off the auctioneer's secured creditors first, such as a bank or other lender to the auction house that has an "all assets" type lien on the assets of the action house (assuming that the bank's lien has been "perfected" by filing UCC-1s, which is the case 99.9999% of the time).<br><br>[Disclaimer: I'm assuming that individual consignors to auction houses would be treated the same way that suppliers/consignors to other companies/manufacturers would be treated. For example, a supplier of grain to a food company would likely have filed UCC-1s to perfect its consignor's security interest in the grain it supplies from time to time to the food company, so that it would be compensated for the value of the grain being held by the food maker if/when the food maker filed for Ch. 11 protection.] <br><br><br>Note also that in bankruptcy, there is something worse than being an unsecured creditor -- "equity" is last in line, after secured creditors and unsecured creditors.
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Hobby Panic in 2009
Posted By: <b>Brian</b><p><br>I recommend investing in fine art rather than baseball cards, given how terrible the world will be going forward...<br><br><img src="http://images.easyart.com/i/prints/rw/lg/8/6/Seinfeld-Kramer-8613.jpg" alt="[linked image]">
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Hobby Panic in 2009
Posted By: <b>Chris Mc</b><p>Turn off the tv and go to work. They can't fix the problems. Dow is halfway to bottom and then there will be a L curve for growth. Say your prayers.
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Hobby Panic in 2009
Posted By: <b>leon</b><p>"Generally speaking, while a "consignor" (e.g., a collector seeking to sell by placing a card with an auction house) technically retains title to the goods (cards) consigned to/with a "consignee" (e.g., the auction house), if the consignee (auction house) filed for Ch. 11 then the goods (cards) consigned become part of the bankrupt consignee's "estate", and would then be available to satisfy the debts owed to the consignee's secured creditors."<br><br><br>Hey PC<br>Thanks for the response. So did this title "magically" transfer to the auction house? I am not a lawyer, by any means, but that sounds crazy. It doesn't seem like the title would change solely based on bankruptcy?.....take care<br>
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Hobby Panic in 2009
Posted By: <b>Lance</b><p>Raymond,<br>Very, VERY JEALOUS!!!!<br><br>...Penn State!!!!<br><br>Have a great time!<br><br>Lance
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Hobby Panic in 2009
Posted By: <b>boxingcardman</b><p>1. Under the Uniform Commercial Code, while consigned goods may be seized to pay the consignee's debts (making the consignor an unsecured creditor), one of the exceptions is when the consignee is generally known to be in the consignment sales business (like any auctioneer). The consignor is allowed to go into court and prove its title to the goods and get them back. If you are concerned, however, you would need to file a UCC-1 financing statement for maximum protection. Once the UCC-1 is properly filed, the consignor will hold a priority security interest with the same priority as a purchase-money secured creditor.<br><br><br><br>2. Most states have enacted laws that protect consignors from having their stuff taken and sold by the consignee's creditors in a variety of consignment circumstances. Depends on where the auctioneer is located. <br><br><br><br>3. The U.S. Bankruptcy Court for the District of Delaware recently held that consigned goods may not be sold to pay debts of the bankrupt absent evidence proving that such goods constitute property of the estate. In re Whitehall Jewelers Holdings, Inc., 2008 WL 2951974 (Bankr. D. Del. Jul. 28, 2008). <br><br><br><br><br><br>Sic Gorgiamus Allos Subjectatos Nunc
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Hobby Panic in 2009
Posted By: <b>Ken McMillan</b><p>Good thing I collect for a hobby and fun vs an investment. Guess I will have to keep on buying.<br><br>Kmac
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Hobby Panic in 2009
Posted By: <b>John</b><p>Bruce We think you're way off base<br><br>First of all our hobby and the collections within are not stock they are not gold and not land. The prices are not regulated per say by anyone and they never have a daily or general finite price or trade value. For the most part like it or not your collection is only worth what someone is willing to pay you at the time of sale regardless of economy.<br><br>Not saying stock cant go down or land cant take a dump. But if you go to sell stock today say Microsoft it will be bought at a certain value. Nobody's going to say its worth $19 a share how about I give you $15 and will call it even.<br><br>Cards trade up and down all the time Ive bought cards in good economies for great prices and I've bought similar cards in worse economies for more money. Cards are all over the place dont believe me look at how many posts over the years on this forum that say "did anyone else think this went really low?" These posts which I would bet there are a ton of date back years or more. Furthermore these discussions have been had for years in hobby circles well before our forum.<br><br>The only things baseball cards have is a ball park that most of the well traded examples sell within the truly rare are all over the place from cheap compared to mainstream cards to out of this world daddy needs Powerball money!<br><br>As for a great depression you and I had this discussion once before my first hollow threat of a lawsuit via email from you ahhhh memories<br><br><a href="http://www.network54.com/Forum/153652/message/1205609405/last-1221775667/We+think+%93we%94+need+a+reality+check%21" target="_new" rel="nofollow">http://www.network54.com/Forum/153652/message/1205609405/last-1221775667/We+think+%93we%94+need+a+reality+check%21</a><br><br>Are we in for some tough times you bet but are we looking at another dust bowl no get real. Most American's wouldnt know true poverty and hard times if it sat on them. And I have poised this question to you once before if there was another Grapes of Wrath scenario around the corner are those affected really going to be concerned about their card collections or feeding their families.<br><br>As for big dollar items most folks that are buying Wagner's aren't really affected by economies sure they can lose money and be hit hard but it's all relative. Most of those folks in bad economy will now have only one Ferrari have to fly first class and sell the G series jet and only have to live with one or two homes. And these very folks will buy some great cards cheap due to older say regular collectors who may need some scrap to get by and who may part with prizes from his or her collections.<br><br>P.S. Bruce I caught the Ringer on TV the other night the one of the actors looks a little bit like you no joke see for yourself.<br><br><img src="http://photos.imageevent.com/piojohn3/junkforumimages/websize/18603514%20copy.jpg" alt="[linked image]"> <img src="http://photos.imageevent.com/piojohn3/junkforumimages/websize/ringer%20copy.jpg" alt="[linked image]"><br>
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Hobby Panic in 2009
Posted By: <b>PC</b><p>Consignments are indeed very tricky. Which is why most commercial suppliers file UCC-1s to protect their interests as consignors. <br><br>A supplier of grain or metal, whose grain or metal is likely mixed in with the same material from other suppliers at a particular factory, is aware of the need for an appropriate consignment agreement and that a UCC-1 needs to be filed. That's prudent, and in the ordinary course of their business. Of course, that is very different from a collector seeking to consign an SGC graded T206 Cobb to an auction house. No consignor is likely to file a UCC-1 in that case, and it might not be necessary (as Adam has pointed out).<br><br>But bankruptcy trustees and secured creditors have gone after stranger assets, in more questionable circumstances. I'd be a little hesitant to consign if I thought an auctioneer was in financial trouble (and how would you find that out -- it's not like an auctioneer is going to respond to your inquiries about their secured debt).
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Hobby Panic in 2009
Posted By: <b>George L.</b><p>Why post that cards are going to fall 25-35% a few days after you post on the bst the following-is your investment standpoint to lose money because I have severe doubts the poster collects for the "fun" of it. <br><br><br>In these tough economic times, cash is king. <br><br>A great depression is just around the corner. <br><br>If you have ultra rare high grade pre WWII type cards that you <br>are willing to sell, we'll pay top market prices if <br>said items meet our standards and our needs. <br><br>Please send a list of what you have and your bottom <br>line asking price in confidence to <br><br>Bruce Dorskind <br>bdorskind@dorskindgroup.com <br><br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>1880nonsports</b><p>please see my email.<br>I'm only observing this time around but EVERY time I see that Brian Cat picture i nearly plotz....<br>Let's try and think more about others than ourselves in 2009......
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Hobby Panic in 2009
Posted By: <b>davidcycleback</b><p>Duly note that the auction houses don't own any of the consignments, and the consignments are not part of their assets. The consignor then the winner own the consignments. If the government seizes a for-a-fee downtown parking lot, the parking lot doesn't own the cars parked there and the government would allow car owners to take their cars. <br><br>If the government seizes a consignment auction house, it knows the consignments are going to have to be returned to the owners.
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Hobby Panic in 2009
Posted By: <b>John J. Grillo</b><p>Bruce...you are an idiot. Your predictions weren't very bold as any economist or news buff could have predicted what you predicted...OK, let's say for argument's sake your predictions were bold...my answer to that is that the sun shines on a dog's ass every now and then.<br><br><br><br>I will predict that your prediction of a Depression will not occur. Quit scaring people as I read your post it was plainly obvious you have no clue. To make a claim such as this merely just shows your ignorance on the historical factors that led to the market crash in 29. I'll just leave it at that.<br><br><br><br>FWIW...Do you know the top two selling vehicles in the United States last year were both American trucks:<br><br><br><br>Ford F-150 ... over 470,000 sold last year alone.<br><br>Chevrolet Silverado... came in 2nd at 430,000.<br><br><br><br>I hope this little fact above doesn't hurt you on your journey of trying to acquire vintage cards on bargain basement prices...who knows, maybe you'll get lucky and the auto industry will crash and millions of americans will lose their jobs...you keep always say a prayer every night hoping this occurs.<br><br><br><br>
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Hobby Panic in 2009
Posted By: <b>Fred C</b><p>John,<br><br>Bruce is not an idiot. However, he can be little eccentric and different.
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Hobby Panic in 2009
Posted By: <b>Jay</b><p>Bruce raised a good issue with this post. I seems that the prudent consignor would:<br><br><br><br>1. Request a cash advance for as high a percentage of the consignments retail value as possible (just in case the **** hits the fan).<br><br><br><br>2. Make certain you know what value your consignment is insured for while in the auction house's possession. There should be an insurance policy with a known company--self insurance should be a non-starter.<br><br><br><br>3. Avoid consigning to auctions that are a long way off. The market can change and once consigned you can not get your lots back because the market is not where you thought it would be. More time equals more uncertainty.<br><br><br><br>I'm sure the list could be expanded and improved but these are just a few thoughts. <br><br>and John, with all due respect, Bruce is anything but an idiot.
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br><br>Dear John<br><br>We wonder where your economic wisdom emanates from.<br><br>Did you also attend two Ivy League universities?<br><br>How many books have you written?<br><br>How much research have you undertaken on rare baseball cards?<br><br>You sound particularly bitter for someone with such a small mind<br><br><br>Bruce Dorskind<br>America's Toughest Want List<br><br><br><br><br><br>
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Hobby Panic in 2009
Posted By: <b>Dan Bretta</b><p>Bruce's first ever 'Dear John' letter. Yea! <img src="/images/happy.gif" height="14" width="14" alt="happy.gif">
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Hobby Panic in 2009
Posted By: <b>Steve</b><p>If one is a collector it does not matter, prices go up<br>down, sideways etc. Collectors are in for the long run.<br><br>Now if one is strictly an investor then he/she may have a problem.<br><br><br>Steve
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Hobby Panic in 2009
Posted By: <b>Greg Theberge</b><p>"You sound particularly bitter for someone with such a small mind"<br><br>Why is this crap tolerated on this board? Utterly childish.<br><br>Greg
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Hobby Panic in 2009
Posted By: <b>Jay</b><p>Greg--I think you need to start with John calling Bruce an idiot; that started the tit for tat.
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Hobby Panic in 2009
Posted By: <b>Brian</b><p><br>I like applesauce.
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Hobby Panic in 2009
Posted By: <b>bigfish</b><p>Bruce,<br><br>WHY?
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Hobby Panic in 2009
Posted By: <b>Dave</b><p>Let's be real here for a second... it's gonna be a bad year. 2009 will be one to forget when all is said and done. <br><br>Will it be a Depression like the 30's? No.<br>But it will be the worst thing since.<br>Now take a deep breath. The economy will not take as long to recover as in the past.<br><br>Bruce would never write this though because it's obvious he sees the long term value in Cardboard. But fear not... he's ready to pounce on those in need and take advantage (see the BST).<br><br>While I appreciate Bruce's knowledge on the Hobby and his intellect on certain subjects, I find his posts of late to be that of a vulture-like terrorist. Spreading panic on the regular board and trying to reap the benefits on the BST. <br><br>Best of luck to you Bruce. You're kinda like a high end Mr. Mint lately.<br><br><br>
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Hobby Panic in 2009
Posted By: <b>leon</b><p>"Why is this crap tolerated on this board? Utterly childish. <br><br>Greg"<br><br><br>It is tolerated because I/we (there are 3 of us) have given hours and hours of thought to moderating the board and the best thing is to let folks, that aren't being anonymous, say what they want to, per the rules. Otherwise, we would never get to know their character, or lack of. It would be a very stale place if it were "overly" moderated/censored....take care<br><br>
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Hobby Panic in 2009
Posted By: <b>John S</b><p><img src="http://www.network54.com/Realm/tmp/1230674493.JPG" alt="[linked image]">
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Hobby Panic in 2009
Posted By: <b>Bruce Dorskind</b><p><br>Dear Dave<br><br>Four Points:<br><br>1) We truly believe the economy will go into a depression. We hope we are not<br>correct, but we see (others may disagree) that there is a strong sign of a depression<br><br><br>2) The main purpose of this post was to address the issue of what happens to a consignor<br>if an auction house is prosecuted by the Government or files for bankruptcy.<br>We received some excellent, highly professional responses to this query.<br><br><br>3) Those who care to attack us, make fun or call us names can expect us to attack back.<br>You may disagree- but Dear John and later another person raised the issue. We have every<br>right to respond as strongly and as directly as we deem appropriate. <br><br><br>4) With regard to our BST Posts- we have been running the same posts for more than 4 years.<br>In 2008 we bought 20 different items from BST- some were at low prices- some were at record<br>high prices. Whilst we are marketers by training, we are not attempting to scare the marke<br>into selling. The 10 offers we received from our most recent post resulted in nine turn downs<br>and one sale. The items we turned down were fairly priced...they simply did not fit onto our want list.<br><br><br>We do not buy for resale. The average type card we own has been part of our collection for<br>eight years. <br><br><br>Regards and Happy New Year!<br><br><br>Bruce Dorskind<br>America's Toughest Want List
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Hobby Panic in 2009
Posted By: <b>Dave</b><p>I hear you Bruce. There were several good responses to your original post and the question you posed is a valid one... but when you start a thread called "Hobby Panic in 2009" and not "Federal Involvement in Auction Houses"... you're fear mongering. Couple that up with your post on the BST of "Cash is King"... and my take is that you're working both sides of the plate (so to speak). And that's where I drew the comparisons to Mr Mint.<br><br>Maybe more accurate thread titles would cause less of a stir down the line. Just my opinion. <br>I think we're all in agreement 2009 is going to be bad, very bad. Lets hope you're wrong about the depression part though and let's think positive. <br><br>
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Hobby Panic in 2009
Posted By: <b>Jeff</b><p>For those of you not nauseated by the topic already, I'd be happy to give anyone a quick primer on bankruptcy law as it relates to auction houses (not very much unlike a "self-storage" facility that goes under, by analogy, a case I actually handled in Virginia). Simply put, no trustee or creditor can grab property of a bankrupt auction house in satisfaction of the debts of the bankrupt auction house. The Bankruptcy Courts only have jurisdiction over property in which the debtor (the bankrupt auction house) has a recognized legal interest in the asset in question. As a non-tile holder, and mere possessor of another's goods, the auction house has no legal title or interest in the consignor's goods, even if they are in the auction house's possession. (In other words, as was pointed out above, consignors' goods have to be affirmatively shown to be legally owned by the auction house in some fashion before the goods would be considered part of the bankruptcy "estate" and be subjected to Bankruptcy Court administration.)<br><br>No, no "bankruptcy clause" in a consignment contract would be valid, or enforced, but it wouldn't be necessary as long as it is clear that title, in whole or in part, fully or for collateral purposes only, does not pass to the auction house (most consignment contracts I have seen make this very clear, since, with ownership, comes liability).<br><br>And, no, it wouldn't be much of a slap fight (although there are bankruptcy lawyers I'd pay to see to have a slap fight). It would take a motion made on behalf of one or more consignors for "turnover" of "non-estate" property, and would likely take 30-60 days before a Bankruptcy Court would hear the motion and rule on it. Not knowing any more than this, I'd guess there is a 95+% chance of a consignor winning this motion without much of a fight.<br><br>Once the consigned goods are sold and paid for, though, its a little different. Now, the auction house holds the consignors' money in trust. However, that trust can be and usually is technically violated when the auction house commingles all of the consignors' proceeds with its own general operating money, making it impossible to identify a particular deposit into that account distinct from any other deposit. In such a case, the commingling will probably result in no "turnover" of "non-estate" property to the consignors, since you can no longer specifically identify the dollars in the general operating account attributable to the proceeds of the consignor's particular sale. Then, there might be a LIFO/FIFO sort of accounting, but that usually fails when it comes to money in a bankruptcy case, and the unpaid consignors are relegated to mere creditors, and unsecured creditors at that (the next to lowest on the food chain -- shareholders in the auction house are actually the lowest form of bankruptcy pond scum). If by some miracle the auction house segregates (physically segregates, like in a separate account, or bank, or state) the consignment proceeds from any and every other money it holds, then some accounting of how to divvy up what is in that account would protect the consignors. In other words, the best protection for consignors is to be sure that, after a sale, the auction house physically segregates the consignors' portion of the proceeds of sales, and accounts for it separately from all other money coursing through the auction house.<br><br>As for 2009 and 2010, the fact is that more crappy real estate is going to collapse -- the 60 Minutes story hit it on the head. Alt-A's and Option Arms are coming due in the next 12-24 months, and that almost guarantees further suppression of realty prices and liquidity, and thus the "ground up" theory of economic recovery is almost certainly stymied through that period. With businesses failing due to collapsing markets, and the failure of financial institutions to put the TARP money out on the street in new or refinanced loans, and the coming second swell of real estate setbacks, things will likely not improve much, if at all, through 2010, and will probably step back, perhaps not hugely, but most likely at least somewhat. I don't see any real change for the man on the street until late 2010 or 2011, and I have never seen it as bad as it is right now (in almost 30 years of bankruptcy practice). Unemployment is going to rise, realty prices soften, interest rates remain so low as to dissuade investment, etc., so 2011 may be the first real glimmer of recovery light.<br><br>Its not doom and gloom. I'm on the front lines here, and I see it everyday in the faces of the people I interview as prospective clients -- things are bad, going to get just as bad for many more people, and for others it will get far worse, and no one foresees any real change anytime in the next two years. Maybe we're all wrong, but I doubt it.
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Hobby Panic in 2009
Posted By: <b>CoreyRSh.anus</b><p>The likelihood of a depression IMO is extremely unlikely. Are any respected economists predicting such an occurrence? I believe in time we will witness how resiliant the US economy is, especially as the benefits of much lower oil prices filter through. In the meantime, for my nickel, I believe current purchases of many kinds of ultra-rare high-quality memorabilia or cards (though with cards, not condition rarities but actual rarities) will prove to be prudent investments.<br><br>
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Hobby Panic in 2009
Posted By: <b>boxingcardman</b><p>Rick: How can you close me up? On what grounds?<br>Captain Renault: I'm shocked, shocked to find that gambling is going on in here!<br>[a croupier hands Renault a pile of money]<br>Croupier: Your winnings, sir.<br>Captain Renault: [sotto voce] Oh, thank you very much.<br>[aloud]<br>Captain Renault: Everybody out at once!<br><br>The panic-mongers in general are overstating the case for their own selfish reasons, whether they are political, pragmatic or simply malicious fun. As far as the motivation behind this thread, methinks the Dorskind Group dost protest too much. Actions speak volumes. He runs "In these tough economic times, cash is king. A great depression is just around the corner" as an advertisement one day and then posts a discussion about the "Hobby Panic in 2009" the next? Puh-leese, if that course of conduct was any more transparently self-serving it would be made of saran wrap. Besides, savvy operator that he is, if Bruce really believed that a great depression was imminent, then he would know that cards would continue to decline in value and he would be waiting for the other shoe to drop before offering to buy more cards. <br><br>Sic Gorgiamus Allos Subjectatos Nunc
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Hobby Panic in 2009
Posted By: <b>steve</b><p>Bruce- I think you are full of baloney. Have some faith bro.
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Hobby Panic in 2009
Posted By: <b>Fred C</b><p>Casablanca...
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Hobby Panic in 2009
Posted By: <b>George HC</b><p>It's time for your medication, Bruce(s).
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Hobby Panic in 2009
Posted By: <b>marshall barkman</b><p>Bruce...i can answer your question. In 2003 a major auction house declared bankruptcy in Washington Dc. That auction house would be compared to Sotheby's of New York. They owed consignors and also estates millions of dollars. The clients were never compensated and anyone who consigned to Sloan's was not allowed to bid on any items while the bankruptcy was going on in fear they would not pay for the items due to the fact money was owed to them. The auction house was then bought by new ownership in 2004 but only the name was purchased and not the debt. The people still have not been payed back nor will they ever be. If a auction house goes bankrupt after selling your cards or antiques then you basically are done unless there is tangible assets. In the case of Sloan's the building was leased and the company owned nothing. My advice to anyone who feels a auction house or company is questionable then sell your goods on sites like this where you control your destiny.
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Hobby Panic in 2009
Posted By: <b>Bob</b><p>Because the root of the problems is gone!<br><br><a href="http://s65.photobucket.com/albums/h233/trophybob/?action=view&current=alfredwbush.jpg" rel="nofollow"><img src="http://i65.photobucket.com/albums/h233/trophybob/alfredwbush.jpg" border="0" alt="Photobucket"></a>
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Hobby Panic in 2009
Posted By: <b>John J. Grillo</b><p>Bruce..here's your original comment: <br><br><br><br>"Many of our posts reflect our strong belief that the US will face <br><br><br><br>a depression between 2009-2012"<br><br><br><br>Based on what? Do you know what a Depression is? Do you know what factors led to the stock market crash in 1929? What, specifically do you see occuring on the economic front in the next 2-3 years that is going to result in a Depression? <br><br><br><br>Let me give you a hint why I think you're an idiot. It wouldn't be a US-only Depression...it would be a worldwide depression, not just the US. <br><br><br><br>You are able to routinely backup your comments about vintage card prices or cards in general with facts. Therefore, you are making what is called an argument, to which one can agree or disagree. With me so far?<br><br><br><br>Now the comment above on the other hand, doesn't even constitute an argument. It is childish and immature to say the least.
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Hobby Panic in 2009
Posted By: <b>Rob D.</b><p>Not to nitpick, John, but I wouldn't say Bruce "routinely" backs up his comments (about cards, collectibles, the Yankees, sports in general, etc.) with facts. To the contrary, often the information he presents as "fact" gets disproven by folks willing to do the research.
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Hobby Panic in 2009
Posted By: <b>Sean C</b><p>Dear Bruce <br><br>I don't wonder where John's economic wisdom emanates from. <br><br>I don't care if John attend two Ivy League universities.<br><br>I don't care how many books John has written? <br><br>I don't know how much research John may have undertaken on rare baseball cards? <br><br>I do know that John doesn't refer to himself with the royal "we", which indicates he is dealing from far stronger sense of reality that you. Your continued use of plural self references and affectations in your posts says far more about you as a human being than you realize. <br><br>I do know that your "You sound particularly bitter for someone with such a small mind " comment is incredibly ironic considering your history, both here and what has been revealed in your background. <br><br>Grow up, you spoiled little brat.
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Hobby Panic in 2009
Posted By: <b>Tom Boblitt</b><p>the messiah has come........all will be well. Nothing can possibly go wrong now.......<br><br>
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