ECONOMY 101

We are now approaching the point where 50% of America's perceived wealth appears gone. The unprecedented collapse of banking, real estate, insurance and industrial giants has shocked and unsettled us all.

However, the wealth did not simply vanish into thin air - it has changed hands. This means there is still money and buyers in the current market (the affluent tend to spend the same in any market). Where are they and what do they want?

One of the great aspects of eBay is that we reach out to a global market. We have not witnessed a decline in eBay values to the same degree we have felt in local markets. There are very dedicated collectors out there willing to pay whatever it takes to acquire a new treasure for their collection.

So, what do they want? The sophisticated collector has had years to develop their collections via eBay. They are now hunting for the rare and elusive holy grail of their genre, or they are looking for upgrades to the pieces they have on display. As an example, we sold a single beer can for $512. I had to find out why somebody would do this. I had a phone conversation with the buyer. He already had the exact can, but this new one didn't have as much paint wear. He displayed the new one on his shelf and placed the old one back on the market.

There are many recent examples of surprising auction results like this. There are premiums still being paid for extremely rare or pristine condition items.

I have had many people ask me if it is too much of a "buyers market" to sell now. They assume that when the economic crisis is over things will rise to their previous value level or even appreciate. The following information is only our personal read on the situation and an opinion. Consider it along with all of the information out there and your own intuition. It is not intended to influence you to sell now. We dislike remorse in our sellers and our buyers alike. We do everything we can to present the facts as we see them to assist our clients based on what is best for you.

Even the "experts" diverge widely on future financial speculation. Our personal belief is that this will be a sustained transformation of the global economy with intense growing pains. There may be bubbles of relief as governments intercede, producing a temporary rebound and the sense things are normal again. Except, that the currency now being printed out of thin air has to eventually devalue the existing currency. Therefore, we believe the consequences are only being delayed. Generally speaking, delayed consequences tend to increase in severity by the time they are unavoidable.

Many antiques and collectibles have significantly devalued since the evolution of the Internet because most things are available in droves now, rather than scarcely appearing in shops or auctions as in the past. We believe this trend will continue for several reasons.

During these tough times many people will become sellers to survive. This will add a new influx of product into the market. Once there, it will remain there in the upgrade and re-sell cycle we noted above. Another subjective factor is the trend of down sizing, which actually began prior to the economic crisis. When this is all over, I believe we will not see the same level of opulence due to cultural shifts regarding what is, and what is not important. The only commodity I anticipate appreciating is the precious metals market.

The next two pages will describe the individual psychology of the seller and the buyer as we have come to know them over our first two years of business.