Interesting post across the street: Modern grade guarantee and consequences

[gmarguli]

Not exactly insurance where you pay an annual premium to indemnify your property against loss.

 

There are single payment insurance premiums. This could be considered one type.

 

 

 

I would be surprised if insurance policies written specifically for numismatics would cover such things as "environmental" damage or loss due to decrease in market value.

 

I don't think we have determined that the coins were stored in an improper environment.

[supertooth]

Greg-----I will not attempt to speak for Chris in this matter. He can certainly speak "well" for himself. But, my opinion on coverage by any insurance company falls like this. Even if Ben or anyone else had insurance on the coins, my take on it would be that the insurance company would balk at any payment----using whatever means posible. Including saying that the coins had been stored improperly--environmental damage. I have dealt with various companies my whole practice life and rarely found anyone who believed either myself or the patient. Their only goals were to delay coverage---if they had to pay. Or avoid coverage entirely----if at all possible. Never, ever had one ask me if what I did or wanted to do was the "best" for the patient. Any coverage over 300 dollars was always a hassle. People thought they were covered but found out that mostly they were on their own. I fear that any coin insurance would end up in a fight for coverage---especially if the dollar amount was high. I offer those poor souls in Florida as an example----still living in trailers almost a year after the hurricanes. Same here in my home state of Maryland----we still have [as of a short time ago] 2,000 people living in some kind of shelter after Isabel. It made our Baltimore Sunpapers. Many were because the insurance companies refused to make decent settlements. Insurance companies are the worst ripoff this nation has ever known. Other than government giveaways. Their only interest is in their own welfare. Certainly not interested in those whom they are supposed to be covering. I know that I am biased in this opinion but, after what I have seen, most others would be too. Bob [supertooth]

[Hoot]

Hi Bob - I like your post on this and think it represents what many people think about the unattainability of the 70 grade. It's sort of an "absolutist" point of view. I tend to be more discretized in my thinking about grades and take a more proximal approach. That is, if a coin has the appearance of a piece that is more proximal to one grade than another, then I'd likely assign it the "closest" grade (even though I tend to err on the side of rounding down when looking at a coin in-hand). In that context, a 70 is an attainable grade, as it does not lie at some infinite distance from 69. I tend to see the gap between 69 and 70 the same as any other functional grade gap. "Perfection" in that sense is only as reasonably perfect as a well-trained eye can detect under the right circumstances for the right length of time. (BTW, I use the 7x loupe as my standard.)

 

So, I reckon that the differing points of view - a tightly bounded vs. a loosely bounded approach to assigning the 70 grade - show equal validity. And so the debate will always rage on...

 

Hoot

[cpm9ball]

Not exactly insurance where you pay an annual premium to indemnify your property against loss.

 

There are single payment insurance premiums. This could be considered one type.

 

The fact that you are paying "lump sum" or in installments is irrelative. Every policy, whether it is property and casualty, home, fire, health or life has a specific policy period.

 

However, I would imagine that most companies would make an exception in Greg's case and require that he pay in advance for the next 2 millennia. It would be the "juice" he must pay for those ridiculous polls!

 

C H R I S

[supertooth]

Hi Hoot!! It may sound strange----but I totally agree with you---because you offer "consistency" in your grading. And, as long as I know that is the way that you grade----I can abide by that grading. And the way you have explained how you grade----I would even accept a 70 from you. Naturally, I would not grade it a 70. But I would know what to expect the coin to look like----If it was coming from you. It would not be a coin that was a 9.4 on a scale of 10. But it most likely would be a coin that graded a 9.7 or 9.8 or 9.9. To me, that "rounding off" would be OK as long as I knew that you did that ahead of time. And Hoot----You could even "Guarantee" your 70. Why?? Because I do believe that you could find another 9.7 or 9.8 or 9.9 coin. I surely do enjoy these boards!! Bob [supertooth]

[gmarguli]

I work in insurance. I do NOT work for insurance companies, but rather for a broker/TPA. I have no love/bias for insurance companies and I have had to threaten some to get payments made. However, from what I have seen, most of the problems with insurance companies paying out fall into a few categories:

 

1) The paperwork isn't filled out properly or complete.

 

2) Insufficient coverage by the person.

 

3) Fraud on the part of the person - not insurance company.

 

BTW, when going after new business, these insurance companies will tell you how fast they pay claims. They will give you percentage breakdowns (i.e. 95% paid within 8 days, 99% paid within 14 days, etc). It's based on when they have all the completed paperwork. For the most part, they pay pretty fast.

 

As for insurance on these coins, his insurance policy (if one were to exist) would likely list the place of storage for the coins - i.e. safety deposit box, house safe, etc. His policy would also clearly state about improper storage. While the insurance company might balk about paying, unless they had proof the coins were stored improperly (and in this case you've got the president of the grading company admitting these coins are spotting for other people), they'd pay.

[gmarguli]

Not exactly insurance where you pay an annual premium to indemnify your property against loss.

 

There are single payment insurance premiums. This could be considered one type.

 

The fact that you are paying "lump sum" or in installments is irrelative. Every policy, whether it is property and casualty, home, fire, health or life has a specific policy period.

 

There is a specific policy period here: As long as the coin remains in the slab.

[Hoot]

I would even accept a 70 from you.

 

Thanks Bob! I have only called one coin that I sent for submission a 70, and it came back a 70. It was one of the Wright Bro's 50 cent pieces. I studied that coin against 4 others, called the other four 69's and also sent them for grading. They came back 69. It may have been my best moment as "grader." I had a coin come back a 70 one time, unexpectedly. I took a hard look at that coin, as I have other 70 graded pieces when I've had the chance, with a 7x loupe and a minute or two (I'm cautiously slow), and I was pressed to find flaws. I've only seen pictures of coins that graded 70 that turned in the holder. A shame, really, that some dope sneezed on the coin or dipped it badly before it was graded. What's a grader to do?

 

Hoot

[supertooth]

Greg------I just spent an hour pecking [i cannot type] a response to your thread about reasons that most insurance claims do not get paid. I vented for that hour and offered a doctor"s version of my "truth". Boy was it a good thread! But then I made a professional judgement----reread it two more times. And then deleted it line by line. Not because I don"t believe what I wrote but because I do not think it a proper subject for these boards. My bias toward insurance companies is "REAL". I can actually back it up with written documentation---in some cases actual fraud. But it has nothing to do with coins so I will just say that if Ben did or does have insurance on his coins, I wish him all the luck in the world. I just hope that PCGS does indeed make him whole and anyone else that has the same problems with their coins. Bob [supertooth]

[Gregg Bingham]

guys ( and gals )

 

imho pcgs is not responsible for anything...let me point out the facts..and im sorry to step on toes but....i heard one guy post and use the term " modern [#@$%!!!]"..that is simply not true...they are nice...and if youy like them great ...get after it

 

BUT THEY ARE NOT RARE...............PERIOD...THE "PRODUCERS WILL MAKE THOUSANDS OF MS 70S....thats the way it is

 

so the guys buying in the early times ms70 coins are going to take a bath..period

 

formula for coin profit is

 

quality plus rareity divided by demand

 

moderns are not rare...cant go up

 

iraq coinage has no demand...nice demand on moderns but cant over take the supply

 

denairs have no quality ...moderns have quality but no rareity...not enough to over come the demand

 

its that simple

 

i collect commems...many of them only had 3000 made..period..if 3001 people want one...too bad...thats it!!!! there will be more ms70 what-ever made than 39-p oregons made

 

next

 

pcgs or any other service cant hold people harmless if a coin changes...they better if they blew the grade or its a fake but thats it... ALERT....plastic is not...i repeat not impervious to some gases and liquids...if yo ulive in newark nj...your copper will turn on you in time and it wont be pretty...its in the air and it will penetrate slabs...do you think they did this intercept shield for grins!!...no there is a need for it

 

also

 

the producers of these modern marvels...do so in a factory...they make thousands of submissions a week....many or most or all..dont use bottle water to rinse...they use sink water...and sometimes it spots... thats the way it si

 

i will not comment on the sellers of these modern marvels other than to say think about it ..they dont have to hunt for rarities...they just go down to the factory and put in a order a 10 ms 70s ..or what ever they can sell...nice wiork if you can get it

 

so if your investing in ms70s...better be short...the long side will break ya

 

if your collecting....great....just dont put the kids college fund into them

 

bottonline is i would not do a thing for ben if i was david hall...how is david suppose to know if the factory used bottled water on thr rinse...or tap water...btw i won several carwashes and know all about water...do you think when one of those clowns changes their oil and dump it down the drain...do ya think there is a guy at the treatment facility standing there watching...saying oh...he comes a gallon of oil...better increase the chemicals...not..it just goes on the coins..if david did something here he would open up pandora`s box.....now that im thinking about it..i have a 91-0 morgan that turned ugly...he david how about a refund!!

 

monsterman

 

ps let the shi$ fly...im tuff i can take it...but remember i speak the truth

[gmarguli]

Alright tuff guy,

 

pcgs or any other service cant hold people harmless if a coin changes...they better if they blew the grade or its a fake but thats it...

 

I strongly disagree. If I buy a Red copper in a PCGS slab and a few years later (assuming I DID store it properly) it turns Brown, PCGS will pay me the difference. If they don't, I have no need for their slab and sellers have little need to submit copper to them. It's a business decision.

 

If I buy a rainbow toned Morgan and it turns black, I expect the grading company to make me whole again. If they don't on the basis that the coin turned (during proper storage) then I have no need for them. A service would come along that does protect the customer. It'd be a foolish business decision to not pay as that coin is going to go out on the market and make the grading company look bad.

 

A couple years back someone sold their registry set of proof Kennedys. Many were graded PF70. The coins were awful. Just outright dogs that had no business being in a PF70 slab. Maybe they turned? All I know is that when they went to auction, the comments being made about them probably cost the grading company more than it would have had them bought them back.

 

What costs more: A) Buying back coins that turned, curating them, and reselling them on the open market. or B) Telling the customers that it is not the problem of the grading company that your coins turned and allowing those dogs to go out on the open market and ruin your reputation?

 

 

As for the MS70 factory, I can say with almost 100% certainty, most of the coins in PCGS/NGC slabs today that are graded MS/PF70 have never been dipped and rinsed. If I want to make a bunch of 70s, I place an order at the Mint and submit a giant bulk lot to the grading services. I tell them 70 is the minimum grade and get a bunch back in a few weeks. There is no reason to waste time or cost incentive to dip/rinse these coins.

[Dry]

 

"What costs more: A) Buying back coins that turned, curating them, and reselling them on the open market. or B) Telling the customers that it is not the problem of the grading company that your coins turned and allowing those dogs to go out on the open market and ruin your reputation?"

 

 

Evidently "B" is working for PCGS so far...

It doesnt keep dealers from sending in submissions. The collector is the one getting gangbanged by both.

[gmarguli]

"What costs more: A) Buying back coins that turned, curating them, and reselling them on the open market. or B) Telling the customers that it is not the problem of the grading company that your coins turned and allowing those dogs to go out on the open market and ruin your reputation?"

 

 

Evidently "B" is working for PCGS so far...

It doesnt keep dealers from sending in submissions. The collector is the one getting gangbanged by both.

 

Actually, PCGS is doing A. It's just that in this case they are slow and have a difference of opinion as to what the coins are worth.

[Dry]

 

"Actually, PCGS is doing A. It's just that in this case they are slow and have a difference of opinion as to what the coins are worth."

 

The way I read it, PCGS hasnt decided what to do yet. Something about waiting for their "scientists" to get back with them.

[Here]

I don't understand what's going on with this. I can see and feel for Ben's position simply because of the time. I also think it's great that D. Hall is trying to get to the bottom of the spotting for everyone's sake. They only questions I have now are:

 

1. Was Ben informed along the way about D. Hall's attempt to find out what's causing the spots?

 

2. When was D. Hall's plan of attack with a scientist and the Mint put in place?

 

 

 

Jerry

[SilverDollarMan]

lets face it, this is insurance. An insurance company will pay FMV.

 

Not exactly insurance where you pay an annual premium to indemnify your property against loss. It is simply a warranty by the TPG for services rendered. I would be surprised if insurance policies written specifically for numismatics would cover such things as "environmental" damage or loss due to decrease in market value.

 

Chris

 

What I mean is, PCGS uses this as a type of insurance and they should pay the man fair market value. Big guy picking on poor Ben. hehe

[SilverDollarMan]

guys ( and gals )

 

imho pcgs is not responsible for anything...let me point out the facts..and im sorry to step on toes but.............

 

bottonline is i would not do a thing for ben if i was david hall...how is david suppose to know if the factory used bottled water on thr rinse...or tap water...btw i won several carwashes and know all about water...do you think when one of those clowns changes their oil and dump it down the drain...do ya think there is a guy at the treatment facility standing there watching...saying oh...he comes a gallon of oil...better increase the chemicals...not..it just goes on the coins..if david did something here he would open up pandora`s box.....now that im thinking about it..i have a 91-0 morgan that turned ugly...he david how about a refund!!

 

monsterman

 

ps let the shi$ fly...im tuff i can take it...but remember i speak the truth

 

Then U, my friend, would be a liar, like Davey. Give Ur word 2 someone....u ought 2 keep it!

[Tradedollarnut]

People who have no clue should at least show a little respect.

[chinook]

I think this may actually help the MS/PR 70 population. PCGS and NGC will more than likely give out fewer and fewer 70's just to avoid problems like this in the future.

[cpm9ball]

lets face it, this is insurance. An insurance company will pay FMV.

 

Not exactly insurance where you pay an annual premium to indemnify your property against loss. It is simply a warranty by the TPG for services rendered. I would be surprised if insurance policies written specifically for numismatics would cover such things as "environmental" damage or loss due to decrease in market value.

 

Chris

 

What I mean is, PCGS uses this as a type of insurance and they should pay the man fair market value. Big guy picking on poor Ben. hehe

 

SDM,

 

Merriam-Webster Dictionary defines warranty as it pertains in this instance:

 

3) a usually written guarantee of the integrity of a product and of the maker's responsibility for the repair or replacement of defective parts.

 

In this instance, they are warranting the encapsulation process of their service.

 

Merriam-Webster Dictionary defines insurance as:

 

1a) the business of insuring persons or property b) coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril c) the sum for which something is insured.

 

You are not paying the TPG for insurance. You are paying for their grading and encapsulation services. As part of their service, the warranty guarantees the integrity of their product. The two words are not synonymous.

 

I need a Dewars on frozen H2O!

 

Chris

[gmarguli]

I think this may actually help the MS/PR 70 population. PCGS and NGC will more than likely give out fewer and fewer 70's just to avoid problems like this in the future.

 

Then the pops don't change much, demand is still there, and prices rise. When one of the cins turn PCGS has to pay out a lot more money.

 

If they still grade a bunch as 70s, then when one turns they have to pay out a lot less.

 

And if they grade too few 70s, people will submit less. If allI'm likely going to get is a 69 which will sell for under cost, why do I submit? Now, if I have a shot at a magical 70 with big profit potential, I'll submit.

[James_OldeTowne]

I guess it's beside the point, but since others have broached the subject, I personally believe "MS-70" should be a theoretical grade, and never used. But then again, I think grading of MS coins is very loose across the board. So maybe there's a perceived need to have "one more MS grade" available....

 

James

[chinook]

I think this may actually help the MS/PR 70 population. PCGS and NGC will more than likely give out fewer and fewer 70's just to avoid problems like this in the future.

 

Then the pops don't change much, demand is still there, and prices rise. When one of the cins turn PCGS has to pay out a lot more money.

 

If they still grade a bunch as 70s, then when one turns they have to pay out a lot less.

 

And if they grade too few 70s, people will submit less. If allI'm likely going to get is a 69 which will sell for under cost, why do I submit? Now, if I have a shot at a magical 70 with big profit potential, I'll submit.

 

Good point Greg. I didnt look at it from the submission potential to PCGS.

[SilverDollarMan]

lets face it, this is insurance. An insurance company will pay FMV.

 

Not exactly insurance where you pay an annual premium to indemnify your property against loss. It is simply a warranty by the TPG for services rendered. I would be surprised if insurance policies written specifically for numismatics would cover such things as "environmental" damage or loss due to decrease in market value.

 

Chris

 

What I mean is, PCGS uses this as a type of insurance and they should pay the man fair market value. Big guy picking on poor Ben. hehe

 

SDM,

 

Merriam-Webster Dictionary defines warranty as it pertains in this instance:

 

3) a usually written guarantee of the integrity of a product and of the maker's responsibility for the repair or replacement of defective parts.

 

In this instance, they are warranting the encapsulation process of their service.

 

Merriam-Webster Dictionary defines insurance as:

 

1a) the business of insuring persons or property b) coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril c) the sum for which something is insured.

 

You are not paying the TPG for insurance. You are paying for their grading and encapsulation services. As part of their service, the warranty guarantees the integrity of their product. The two words are not synonymous.

 

I need a Dewars on frozen H2O!

 

Chris

 

Ur missing my point, Dave Hall said he would fix the situation, he should.

[Morgannut]

From an economic and PCGS point of view, each MS-70 (or pop top) is a winning lottery ticket. When they have enough profit to issue another MS-70 and still be way ahead, they can do it. As long as a new one comes along occasionally, people still will take a shot while getting a few MS-68/9 grades (PCGS has never had a problem returning coins at one grade lower than they are) trying to make a score.

 

Are there some coins that are clearly finer than MS-69, just as there are some coins (MS-69) clearly better than MS-68?? Yes, there are. But there is an economic component to the decision to grade MS-70's, due to the risk.

 

This economic analysis does not apply to rarer issues. If PCGS grades all the 1885 Trade Dollars MS-69, there will be major problems (at least!), but it won't change the 1885 values one penny.

[michael]

[errorist]

The mentalitys of such CEOs of coin grading companies that bann forum members because their coins have bladder control problems!!!!

[IGWT]

. . . As long as a new one [MS-70] comes along occasionally, people still will take a shot while getting a few MS-68/9 grades (PCGS has never had a problem returning coins at one grade lower than they are) trying to make a score. . . .

 

B.F. Skinner conducted a series of experiments to study conditioned responses in lab animals. He found that intermittent rewards produce a much stronger conditioned response than consistent rewards. Psychologists have proven that the same principle applies to people. So, awarding the highest grade sparingly will strongly condition collectors to keep submitting.

 

This theory probably sounds like a lot of hooey. I'd be willing to bet, though, that conditioned responses -- whether created intentionally or not by the TPGs -- account for a large portion of submissions (particularly of modern coins). And, of course, the registries feed a competitive urge that contributes to the "need" for high grades.

 

I suppose that not much of this has to do with numismatics. Then again, neither does a piece of plastic surrounding a coin.

[GAB]

What a mess.

Whatever happens, it will only get worse. They may ALL get ugly in a few years.

As far as I am concerned, these SAE's are worth about $12.00 - no matter how they are "graded". That is why they call them bullion. Bust a few out and put them in a Stacks auction to find out what what the Fair Market Value is!!

[michael]