Rare Book Monthly

Articles - September - 2015 Issue

Changing Valuations

Euro/dollar diverging recently

Over the past year we have seen substantial changes in auction outcomes as expressed in US dollars.  Auctions of course are priced in local currencies, the dollar, pound [-5%] and euro [-12.5] predominate but there are also sales in Mexican pesos, Canadian dollars, Australian dollars [-27.5% ] Swiss francs and occasionally a few others.  We always convert to dollars to make comparison easier.  This said, this past year has seen dramatic shifts in currency values that are affecting the overall market by creating larger differences in outcome by region.

 

Of course, in a perfect world, prices would seamlessly adjust day-to-day and place-to-place to reflect exchange differences but that is not always happening.  We can tell because, while the number of auction lots in Europe continued to increase in the first half of 2015, the continent, which has wrestled both with the “Greek problem” and resistance to the monetary easing that has been employed in the United States, have seen outcomes reported in euros weaken.  These differences have made the euro particularly unstable and for the first time in memory suggest, we think mistakenly, that the long-term trend toward a worldwide auction market is losing steam.  It is not but it is a reminder that the euro is an incomplete experiment.

 

Auction sales, by dollars and units, do not always increase.  We see periodic declines because of uncertainty, be it war, recession or depression.  We know that sellers, when they feel this uncertainty, waxing prudent, withhold material and or impose higher reserves to protect themselves against momentary bidding collapses.  And auction houses by and large reflect this reality by not disclosing reserves [which can and do get quietly adjusted] based on market conditions and consignor cold feet.  After all, from seller commitment to the banging down of the auctioneer’s hammer, it often takes six months and not uncommonly a year.  And in that time a lot can happen.

 

Beyond all consideration for life’s uncertainties the introduction of dramatic shifts in exchange rates presents opportunities and risks not seen since the 1970s, the last time that auctions were essentially local and often not accessible to distant bidders.  Theoretically, an item should be worth the same in London, Paris and New York and the Rare Book Hub Transaction Database assumes this to be the case.  But this spring’s results suggest that local prices do not so effortlessly adjust.

 

Such shifts are as often political as they are economic.  China recently devalued the Yuan to keep their factories operating at full capacity.  They did so because they felt the need to maintain a 7% growth rate, a rate that is the envy of the developed world.   But the underlying story is that as the general population shifts from county to city more people need jobs and in a Communist country the government is expected to provide them.  Keeping people on the farm so to speak is fine for some but for many others the challenge and economic advantages of the city lead to unrest if the need is not met.  In other words, China devalued to maintain social order.

 

In Europe the euro is the outcome of a social system that also manages economic integration.  The European union is clearly more a social than economic alliance and perhaps their deepest motivation is to avoid war.  They have their history and it is a bloody one.  Through economic alliance they hope to minimize conflict.  And they are succeeding.  But they are also packaging Germany and Greece in the same currency package and it’s an untested idea being tested for the first time.

 

The United States, before they were united, was a short-lived confederation that quickly gave way to the subjugation of states rights to a unified central government.  Today’s EU is the equivalent of America’s confederation and many expect the United States of Europe to become the logical long-term outcome.

 

While the EU labors on the euro will continue to be periodically unstable, for itself and by extension, casting instability among other currencies.  One outcome will be unusually significant differences in European auction results when translated into US dollars, numbers that on their face suggest weakness this spring but that, when examined more closely, simply reflect Europe’s social, political and economic transformation from a group of counties to a group of states.

 

Finally another way to look at the data is to set aside the assumption that auction results should be uniformly expressed in dollars.  When all results are converted into euros rather than dollars the first six months of 2015 show a 2% gain rather than an 18% decline.  The world is changing and we will adjust our methodology as/when needed.

 

The following analysis compares the past eight years’ January-June auction sales expressed in both dollars and euros. 

 

January-June Sales from 2008-2015

     
               
 

In US Dollar Terms

Average FX Rate

In Euro Terms

 

 

$mm

% Growth

EUR/USD

% Growth

€mm

% Growth

 

1H 2008

$247

 

1.56

 

€ 159

   

1H 2009

$135

(45%)

1.35

(13%)

€ 100

(37%)

 

1H 2010

$169

25%

1.31

(3%)

€ 129

29%

 

1H 2011

$190

12%

1.43

9%

€ 133

3%

 

1H 2012

$307

62%

1.30

(9%)

€ 236

78%

 

1H 2013

$322

5%

1.31

1%

€ 246

4%

 

1H 2014

$345

7%

1.37

5%

€ 251

2%

 

1H 2015

$283

(18%)

1.11

(19%)

€ 256

2%

 

 

 

Rare Book Monthly

  • Fonsie Mealy’s
    Summer Rare Book
    & Collectors’ Sale
    July 30-31, 2024
    Fonsie Mealy’s, July 30-31: U.S. / European Shipping Archive 1800-1814. The Widow Bermingham & Sons Collection. €7,000 to €10,000.
    Fonsie Mealy’s, July 30-31: Bunreacht na hÉireann. Constitution of Ireland. An important copy of the First Printing of De Valera’s new Constitution, approved in 1938. Signed by the Constitution Cabinet. €7,000 to €9,000.
    Fonsie Mealy’s, July 30-31: A Rare Complete Run of the Cuala Press Broadsides. €7,000 to €9,000.
    Fonsie Mealy’s
    Summer Rare Book
    & Collectors’ Sale
    July 30-31, 2024
    Fonsie Mealy’s, July 30-31: Grose (Francis). The Antiquities of Ireland, 2vols. folio London (for S. Hooper) 1791. Magnificent Hand-Coloured Copy - Only 25 Copies. €3,000 to €5,000.
    Fonsie Mealy’s, July 30-31: Cantillon (Richard). Essai sur la Nature du Commerce en General, Traduit de l'Anglois, Sm. 8vo London (Fletcher Gyles) 1756. €3,000 to €4,000.
    Fonsie Mealy’s, July 30-31: Gregory, (Lady Augusta). Spreading the News: The Rising of the Moon: The Poorhouse (with Douglas Hyde). Being Vol. IX of the Abbey Theatre Series. €3,000 to €4,000.
    Fonsie Mealy’s
    Summer Rare Book
    & Collectors’ Sale
    July 30-31, 2024
    Fonsie Mealy’s, July 30-31: Lavery (Lady Hazel). A moving series of three A.L.S. and a Telegram to Gen. Eoin O'Duffy, July-August 1927, expressing her grief at the death of Kevin O'Higgins. €3,000 to €4,000.
    Fonsie Mealy’s, July 30-31: Dampier (Wm.) Nouveau Voyage Autour du Monde, ou l'on descrit en particulier l'Isthme de l'Amerique…, 2 vols. in one, Amsterdam, 1698. €800 to €1,200.
    Fonsie Mealy’s, July 30-31: Howell (James). Instructions for Forreine Travel Shewing by what Cours, and in what Compasse of Time…, London, 1642. €800 to €1,200.
    Fonsie Mealy’s
    Summer Rare Book
    & Collectors’ Sale
    July 30-31, 2024
    Fonsie Mealy’s, July 30-31: Rowling (J.K.) Harry Potter and the Philosopher's Stone, 8vo, L. (Bloomsbury) 1999, First Edn., First Printing of Deluxe Collectors Edn. Signed. €800 to €1,200.
    Fonsie Mealy’s, July 30-31: James (Wm.) A Full and Correct Account of the Military Occurrences of The Late War Between Great Britain and The United States of America. 2 vols. Lond. 1818. €650 to €900.
    Fonsie Mealy’s, July 30-31: The Laws of the United States, Published by Authority, 3 vols. Philadelphia (Richard Folwell) 1796. €600 to €800.
  • Sotheby’s, July 11: Galileo, Document annotated and signed by Galileo, dated Padua, 1595. £500,000 to £700,000.
  • Bonhams, July 15-25: THE AUTOGRAPH COLLECTION OF ISRAEL WITKOWER. $8,000 - $12,000
    Bonhams, July 15-25: GEORGE WASHINGTON SIGNED DISCHARGE. June 9, 1783. $8,000 - $12,000
    Bonhams, July 15-25: "Shhhhh!" A DAVID SHANNON ILLUSTRATION FROM DAVID GETS IN TROUBLE. $2,500 - $3,500
    Bonhams, July 15-25: PICASSO, PABLO. Le Carmen des Carmen. Paris, 1964. $2,000 - $3,000
    Bonhams, July 15-25: RARE AUTOGRAPH OF AMERICAN NAVAL HERO CAPTAIN JAMES MUGFORD. $2,000 - $3,000
    Bonhams, July 15-25: KARA WALKER SILHOUETTES FOR TONI MORRISON'S FIVE POEMS. $2,000 - $3,000
    Bonhams, July 15-25: FIRST APPEARANCE OF PINOCCHIO IN ENGLISH. COLLODI, CARLO.New York, 1892. $2,000 - $3,000
    Bonhams, July 15-25: BONAPARTE, JOSEPHINE. Autograph Note (unsigned) in French. $1,000 - $1,500
    Bonhams, July 15-25: FROST ON MATTHEW ARNOLD.Autograph Letter Signed to Adams, July 27, 1934. $800 - $1,200
    Bonhams, July 15-25: ELIAS BOUDINOT'S COPY OF BARLOW'S COLUMBIAN EPIC. $800 - $1,200
    Bonhams, July 15-25: A SIGNED HART CRANE BROOKLYN BRIDGE POSTCARD TO EDWARD DAHLBERG. $600 - $800
    Bonhams, July 15-25: A STOCK CERTIFICATE SIGNED BY THE "QUEEN OF WALL STREET," HETTY GREEN. $700 - $900

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