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Pillar Of The Community
United States
8407 Posts |
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We have gone from the low-return world of 2009 - 21 to a full return world in the United States . That means investors can get " solid returns " without having to rely so heavily on riskier investment .
Older stamp collectors will have two new avenues for extra income which will be a factor in their buying . First is the big jump in Social Security which next month will be over 8% increase each month in what they receive . The second is the big increase in CD rates ,this will make a big difference to me . Rate that is now being offered which I got was 4.9% on interest . So a retired person with savings will be getting 5,000 to $20,000 a year more and some even more than that . That is outside of all the risk taken in the past to get results on their investments .
Start adding all these factors together with the ability to sell your duplicates on the internet plus this change in the fanancial markets with interest rates and your going to see these strong increases like we seen last week at the Kelleher Stamp Auctions for collections .
We are at the start of a change in 2023 .
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Pillar Of The Community
3859 Posts |
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Are you saying that due to rising interest rates that it's a great time for money-savers, but a not-so-great time for money-borrowers? |
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| Edited by jogil - 12/16/2022 07:40 am |
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Pillar Of The Community
United States
8407 Posts |
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exactly -----In Florida for example you can see a big difference at the breakfest resturants . As interest rates increase more people go out to eat . Sounds silly but it is a measure of how people think . |
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Pillar Of The Community
Israel
1216 Posts |
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I assume it will effect the auction market and medium to high-value stamp market.
Will it affect the cheap stamps market? |
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Pillar Of The Community
United States
772 Posts |
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It will also be interesting to see how the approach of retirement for the last of the baby boomers approaches over the next decade. Many boomers were introduced to the hobby as kids and now return to it as ty revive a long dormant interest in the hobby so may revive interest in the hobby now with more free time (and perhaps income) on their hands |
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APS #173088
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| Edited by DJCMHOH - 12/16/2022 09:17 am |
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Bedrock Of The Community
12553 Posts |
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Note: Interest rates and SS COLA did not go up just to go up. They went up because of inflationary pressures. Savings depletion is at an all time high and CC debt has skyrocketed as people run out of cash and turn to plastic which is now charging higher interest rates. At best nothing changes in the stamp market IMHO. People that had the means to play with higher priced stamps still will and those that had a tighter budget will be feeling the pinch. There is a massive divide between the haves and the have nots and very little middle ground. Quote:
The personal savings rate — how much people are saving as a percentage of disposable personal income — spiked during the start of Covid-19 as many Americans received stimulus checks and stopped commuting.
But the savings rate has come down since, in large part due to the high cost of living. The savings rate fell to just 2.3% in October, according to government statistics released last week.
Goldman Sachs economists described this as an "exceptionally low" savings rate, noting in a report to clients this week that this is just a touch above the record low of 2.15% set during the housing boom of 2005.
By contrast, the savings rate in 2019 averaged nearly 9%, according to Moody's.
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"The lack of real [inflation-adjusted] income is beginning to catch up with the middle class and the working poor," said Brusuelas.
'Financial cushions are quickly shrinking'
The good news is that consumers, in aggregate, built up an epic pile of savings during the pandemic
The Federal Reserve estimates that so-called excess savings peaked at $2.3 trillion in the third quarter of 2021.
The bad news is that mountain of cash is getting whittled away as consumers struggle to keep up with inflation.
"The financial cushions are quickly shrinking," economists at Moody's wrote in a note to clients.
Excess savings fell to around $1.7 trillion in the middle of this year, according to Fed estimates. By the end of September, it fell further to about $1.5 trillion, RSM estimates.
"That trillion and a half dollars will run out some time mid-year next year," JPMorgan Chase CEO Jamie Dimon told CNBC earlier this week, noting that inflation is "eroding" the pile of savings.
Dimon said this savings drawdown is one of the things that "may very well derail the economy and cause a mild or hard recession that people worry about."
A recent survey from Vanguard showed a "concerning" rise in hardship withdrawals, or cash that workers are taking out of their employer retirement programs, like 401(k) plans.
"The recent increase in households drawing on their employer-sponsored retirement accounts … could be a sign of some deterioration in the financial health of the US consumer," said Fiona Greig, Vanguard's global head of investor research and policy.
'Inflation is killing me'
Of course, the pile of savings is not evenly divided. It skews toward the wealTheir households.
Data from Moody's shows that the highest-earning quartile of Americans still has a mountain of savings totaling around $800 billion. By contrast, the bottom quartile has already worked through a chunk of savings and has around $100 billion left.
Credit card companies are starting to see a divide between consumers with high and low credit scores.
"The prime households have enough liquidity to manage inflation," Roger Crosby Hochschild, CEO of Discover Financial Services, said at a Goldman Sachs conference this week. "You're seeing stress in the subprime and near-prime issuers where those households are already tapped out. They're already shopping at Dollar General or lower-end retailers."
Brian Wenzel, chief financial officer of store credit card issuer Synchrony Financial, said the cost of living is clearly impacting some borrowers.
"What we hear today is, 'Hey, listen, I can't make my rent payment, it's up. Inflation is killing me on gas and groceries.' You see that," Wenzel said at the conference.
Record credit card rates
Even some high-income Americans are getting squeezed.
Bank of America, citing internal data on customers, said high-income consumers are trading down at the supermarket and spending significantly more at value grocery stores than they did before Covid.
The timing for Americans to be leaning on credit cards and savings is not ideal.
"Unfortunately, they are drawing down on savings ahead of what looks like at best a slowdown and at worst a recession next year," said RSM's Brusuelas.
Credit card rates have surged to record highs as the Federal Reserve scrambles to fight inflation with massive rate hikes. Some store-brand credit card rates have surpassed 30%. https://www.cnn.com/2022/12/09/econ...g/index.html |
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Pillar Of The Community
United States
716 Posts |
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 As uncle Jed told cousin Jethro, "I think you have "outthumk" yourself". All of these factors will affect individuals differently. The results still is the price of an item is set at what a willing buyer and seller agree to be mutual beneficial. |
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Pillar Of The Community
United States
1847 Posts |
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I think the point of the posts after Floortrader's is to clarify that while the numbers in SS checks and interest payments are higher, the dollars are worth less, so what have we really gained?
I was in a business presentation yesterday in which a 30-something analyst showed the amounts of a dollar metric for our business for years 2017 to 2022 and proudly noted that while it had risen and fallen from 2018 to 2021, the 2022 number was bigger than the 2017 number so we had "recovered" and that metric was "doing great." I pointed out that the list was not inflation adjusted and that with 22% inflation since 2017, our 2022 number was actually a 5% drop compared to 2017. There was fifteen seconds of silence and then the presentation moved on. A lot of people do not want to face the conflict and stress that government anti-growth policies create. |
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Pillar Of The Community
United Kingdom
8579 Posts |
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I don't see it. Here, there's protection of state pensioners' incomes, with rises linked to the cost of living index, but that just means being better able to cope with rising energy, food etc prices. My memory is that public sector wages are worth less in real terms that they were in 2009 - not a lot of spare cash there, and with any pay rises lagging the rate of inflation. As before, if you have disposable income on top of your day-to-day needs, you can blow it on hobbies etc. If not, it's a struggle. |
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Pillar Of The Community
United States
8407 Posts |
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Sorry --- I posted that original posting for how things are changing and what can happen going into 2023 for the stamp community .
I wasn't addressing all the financial stress to the general public, we as stamp collectors are better off than the general public . Trying to point what is going on that will effect most of us with our stamp buying or selling and maybe the reasons why and what direction we are trending toward . |
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Pillar Of The Community
United States
8407 Posts |
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Rogdcam ---- Bad day to be quoting Goldman Sachs about the economy ,they just announced up to 4,000 layoffs today . ROB ROY ---It depends ,very cheap stamps No! One area of stamps that are showing price increases are those large filled worldwide stamp collections ,many years ago the stamp auction firms best could get 2 cents per stamp . Over the years as more albums came on the market had more of the recent complete sets the price of those collections increased up to 5 to 6 cents per stamp mount in albums . Over the past year at stamp auctions those large collections are starting to pull about 10 cents each ,this also holds true with stuff on ebay . Where larger country collections mount on stocksheets or dealer cards are selling for 10 cents or better , something like 150 Thailand stamps can do better than $15.00 . These are what I am seeing ,not true in every case but in general this is what is happening . |
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| Edited by floortrader - 12/16/2022 1:34 pm |
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Bedrock Of The Community
12553 Posts |
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Watching the recent Rumsey Gems of Philately and Seigel sales the upper end of the hobby is realizing record prices. No surprise given that there are those that are well insulated from financial downturns.
For the rest of us we are in a recession by the classic definition. Everything is up across the board from fuel to food. Savings are being depleted and CC debt is skyrocketing. Ironically, Russian material is hot in part because the Russian economy is going gangbusters despite sanctions which have backfired. The worm turns.
Not just Goldman that is laying off. The previously immune tech sector, including Apple, is laying off. Housing starts are tanking because of interest rates and material costs. First time homebuyers are out of luck unless daddy is wealthy. Meanwhile the push to go green before we are capable of doing so sanely is further causing economic turmoil. As an example, the For F150 Lightning that caused a stir when it was announced a year or so ago because of its low starting price of +/- $43,000 has seen its MSRP increase by $16,000 with the entry level truck now costing $60,000 plus. Stellantis (Chrysler, Dodge etc.) is closing a factory in Belvedere, Illinois due to the high cost of building EV's with 1,350 employees being laid off.
Maybe the low end of the stamp market will see an uptick because people are looking for a less expensive hobby? |
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I am a hobbyist, a person who used to be fairly well off but now lives a lot closer to the edge due to medical-driven costs over the last 8-10 years. Even though I have been on Medicare since I was 57, just the supplemental (gap) insurance sucks up substantial percentages of our income.
Just got the notice from the insurance company that next year that my gap coverage is being raised to $1300 per month. This is only for me; my wife is on a separate plan. Between the two of us our medical insurance runs well over $20k a year; our largest single-family expense and more than my mortgage and car payment combined.
This upcoming year 'cost of living' (COLA) Medicare increase does not cover the increase in just my medical insurance never mind all the other household increases.
It is easy to say 'things are great' if you are relatively wealthy and not living closer to the edge. No doubt dropping thousands on stamps is no big deal and the current situation is not a bother.
But there are PLENTY of collectors in this community who are not wealthy and are living closer to the edge. Many are too embarrassed, or perhaps just more private, with their economic position and I think this perspective is often not as represented as those here who have much more disposable wealth.
Don |
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Pillar Of The Community
United States
878 Posts |
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Quote:
But there are PLENTY of collectors in this community who are not wealthy and are living closer to the edge. Many are too embarrassed, or perhaps just more private, with their economic position and I think this perspective is often not as represented as those here who have much more disposable wealth.  John |
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Pillar Of The Community
United Kingdom
8579 Posts |
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Most people in Britain can't conceive of circumstances where you have to pay for essential medical treatment. We're used to delays and short-staffing caused by twelve years of government under-funding and Brexit, but a financial hit … no. At present, I'm financially OK with my combination of state and work pensions if I'm careful. I try to balance my spend on stamps and cards with ebay sales. And if things got bad, the stamps and cards could go - thirty years ago I sold my treasured collection of soul and blues records to pay bills and my ex's debts. Life goes on. But money to burn … no. |
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Valued Member
United States
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I'm not seeing a great time to sell. Just like stocks right now are a great time to buy. Higher costs of daily life is cutting into the extra or mad money people spend on hobbies. Every boruse I go to has long time collectors looking to sell their collections to get living money. It is kind of sad. |
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Replies: 46 / Views: 4,343 |
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Posted 12/16/2022 07:25 am
