notes

The consensus of opinion is that today’s stock market correction was due to continued worries about sub prime mortgages, particularly after Countrywide Financial, the nation’s largest mortgage loan broker, reported earnings significantly less than Wall Street expected, or the company itself had projected. It is important to bear in mind, though, that Countrywide is reporting earnings, not losses. Given that Countrywide’s primary source of revenue is origination fees on mortgage loans, that they are making as much money as they are strikes me as a good thing, and not in any way indicative of wide scale problems in either the mortgage industry or the housing industry generally. Presumably, if Countrywide is still reporting earnings, they are still originating, and remarketing, mortgage loans.

In fact, what people overlook is that so many sub prime mortgages, those ‘no qualifier’ and stated-income loans, were made to home buyers whose large size of loan and income stream makes mortgage loan underwriting difficult. The primary underwriting basis for many of these loans, simple as it sounds, is a significant cash down payment from the buyer, usually at least 30% of the purchase price of the property or  its appraisal value, whichever is more. Consequently, in spite of some contraction of real estate values in some markets, the almost all sub prime mortgages remain very well collateralized. Moreover, much of what we read about how sub prime mortgages are effecting financial markets has to do with hedge funds and derivative investments that are in some way composed of sub prime mortgages. Assuming some kind of Moody’s or Standard and Poor’s down grade to the fund, the par value declines- in spite of the fact that the underlying debt instruments may still be as money good as they ever were!

Further, home builders themselves do not have massive inventories of unsold homes. Home builders, however, have to build and sell homes to make money. Consequently, those companies that expanded in order to meet the unprecedented demand for new housing units over the last 6 years, are naturally showing a large amount of red ink while they contract their overheads to match reduced demand for their product. Did I say that home builders do not have massive inventories of unsold homes? It bears repeating, as the purchasing slowdown happened so quickly it is difficult to imagine that suddenly, all demand for new housing had been met. In fact, what home builders tell me, the pundits who predicted a slowdown for at least a year before the slowdown began late in 2005 began to influence buyers who began to think that, if they waited, housing prices would decline. Did demand slacken? No- what replaced demand amongst buyers was fear of overpaying. At some point in the not too distant future, buyers will cotton on to the fact that houses continue to be a safe investment, and, with pent up consumer demand  and no inventories of new housing, demand will quickly outstrip supply and prices will go through the roof.

‘Safe as houses’ as the old saying goes, certainly once consumer confidence overcomes fear in the financial markets. And sub prime mortgages? Safer than you’d think.

Yesterday, Grosvenor House. The two days prior, Olympia Summer Fair. Art and antiques overdose? Hardly- I’ll be back at Olympia tomorrow and Grosvenor House on Monday.

The look of Olympia is wonderful- bright, airy, and the main floor with some impressive stands. This year, Partridges, a refugee from Grosvenor last year, is joined by Malletts and Pelham Galleries. Malletts have kept their place at Grosvenor House, but have done a kicky, two storeyed booth at Olympia with a mix of material- 20th century as well as period- giving their stand a look that might shock their regular visitors at Grosvenor.

Pelham Galleries have done something terrific from the outside- a free standing pavilion, redolent of what one might find in the garden of the quality- vaguely Middle Eastern in feel with colored marble pilasters affixed to the exterior. Impressive from the outside, the ingress is a bit pinched, making it a little less inviting than it might be to enter and view what’s inside. Indeed, one feels trapped inside and not at ease to have a good nose around. But, that’s only one man’s view, and Alan Rubin will doubtless have quite a bit to say about the design- both its rationale and its success. Wait for it in the next issue of The Antiques Trade Gazette. Still, what is more significant than anything else is the fact of Pelham, an institution at Grosvenor House, and now at Olympia.

Overall, the stands at Olympia looked good- open, with an excellent mix of traditional and modern material. Gordon Watson had a large stand with the mix of mid century material that he’s known for. My colleagues Reindeer Antiques, although on the gallery level, none the less have an impressive stand with a wonderful mid 18th century gilt wood serving table with a breche violette marble top. Fantastic looking, with its oversized paterae at the top of the legs, possibly the work on Francois Herve, or another émigré craftsman.

The stands that were in the main the most impressive were those like Reindeer where the items were impressive, and display sufficiently spare to showcase each piece. Having said that, there were a number of traditional dealers whose stands appeared the way they have always done, with a mix of mostly brown furniture- good quality, to be sure, but a sea of mahogany, none the less.

Grosvenor House- well, what can one say? The grandfather of all quality fairs, the ne plus ultra of English furniture, certainly. And, in terms of quality, this year did not fail to disappoint. Actually, it did fail to disappoint, because it failed to surprise. Yes, the stands all had good pieces, but nothing that one wasn’t already aware of, and some that had only recently been acquired in the sales rooms. Certainly, the ballroom of Grosvenor House makes for some logistical limitations- limited space and consequently, a limited area for display, and for aisle ways for punters. And, of course, the champagne bar, already busy by noon yesterday, has to be sandwiched into the middle of the floor. Expensive real estate for the dealers who participate, so, as a consequence, it isn’t too surprising the dealers all want to shoe horn as much material into this pricey space as possible.

In both shows, I did spy a few red dots. And there was at least one noteworthy sale. At Olympia, Butchoff Antiques had a large Wright and Mansfield desk that sold to a Russian oligarch on opening day for something in the range of £500,000. That’s a good day’s work.

Olympia Summer Fair closes tomorrow June 17 at 5PM, while Grosvenor House runs until Monday, June 18, closing at 8PM.

Free standing ‘stage set’ vignettes and top notch dealers, albeit 300 of them, make the new look Olympia Summer Fair sexier than it has been. But will it yield results? Not that it isn’t always a good day out. This massive, 35 year old fair, a mainstay of the Olympia Exhibition Halls in Kensington, overwhelms the first time attendee who might be more accustomed to so-called ‘table top’ shows of collectibles at the local fairgrounds.

The range of goods over the last couple of years has become even more extensive. Although primarily in the decorative arts, with a heavy emphasis on furniture, it hasn’t been just brown furniture for a number of years. The range is from the best of traditional 18th century, and earlier, design, to the best of Europe in the 20th century. If you are an Adnet lover, I promise, there will be plenty for you to look at.

Our London colleagues Reindeer Antiques will be there, of course, and I encourage my readers, all ten of you, to make yourselves known to Peter Alexander who will be manning the stand.

Traditionally, one of the terrific things about Olympia was its brief time overlap with the more prestigious Grosvenor House fair, allowing one to attend both on the same, or better, alternate, days. Grosvenor House, around since the 1930’s utilizing the grand ballroom of the hotel of the same name, this grand old fair is in the same league as TEFAF Maastricht in terms of the quality of material, but with a particularly British slant. Interestingly, Malletts and Pelham Galleries, always big exhibitors at Grosvenor House, have followed Partridge’s lead (wouldn’t they hate my saying so?) and will be at Olympia. What’s the reason? Speculation, of course, but the attendance at Olympia is far greater than Grosvenor. Our business is all about numbers of punters seeing your stock, so, perhaps, the chances of the right buyer coming by are felt to be improved participating in the higher traffic Olympia fair. After I’ve seen both fairs, I will let you know.

Shopping the fairs, will there be any bargains? I doubt it. Bear in mind, the dealers at the fair are some of the world’s best, and most have been around for years. In the case of Malletts, for nearly a century and a half. Consequently, they know their stock, and that of their competitors, so well that the likelihood of finding a sleeper is remote in the extreme. Value for money? Well…quality for money, anyway.

he Olympia fair runs from June 7 through the 17th at the National Hall of the Olympia Exhibition Centre. The Grosvenor House Fair at Grosvenor House, Park Lane, runs June 14 through the 20th.

A couple of days ago, Wal-Mart noted some significant contraction in sales for the month of April, as did Target. The sales slump was most pronounced in their stores open a year or more. Both cited bad weather during the month, but the heavy weather, in my opinion, is just beginning for the so-called low cost, high volume retailers.

Several things come to mind and may mark a significant shift in both patterns of consumption but also demography. Indirectly, my mother brought this to my attention the other day. My parents have moved from the farmhouse they have occupied for over 30 years into a new home in the small town near by. Their house, an existing home they substantially remodeled near the centre of town, is tremendous for them, with everything within walking distance- groceries, druggist, church. Mother remarked how, in her life, things have come full circle. Growing up, she lived in Berkeley, California, and walked everywhere for everything. Now, after nearly 60 years of being forced to drive to shop, she has returned to a traditional style of life- a pedestrian one and patronizing local shops.

Urban living, no driving, and no gasoline consumption. Does anyone not have to drive to Wal-Mart, or Costco, or Target? Are there any of these stores on the bus line? And what would be the point if they were? These stores are set up to sell mass quantities of goods that a body couldn’t take home on public transportation anyway.

If anything, what we’ve seen is the reemergence of the neighborhood business district, where you can walk, pick up a few things, and return home. And, most significantly, leave the car at home, too. Keith and I rarely take our car out for anything. Admittedly, the public transportation in San Francisco and London are pretty good, but, even so, we notice the growth in popularity of the corner shop, something nearly extinct not so very long ago. Sainsbury’s and Tesco, the two largest grocery chains in England, cottoned on to this fact a few years ago. Now, near our flat in Notting Hill, we have both a Sainsbury’s and a Tesco, downsized for the local shopping streets. And, offering what people buy these days- fresh fruit and vegetables and good wine take up more shelf space than paper diapers and frozen pizza.

Overall, I think this bodes well generally for inner city commercial activity, where corner shops and local shopping streets have, until recently, had shop fronts boarded up more often over the last five decades than they’ve been open for business. Certainly in San Francisco, as so-called empty nesters sell their homes in the suburbs for more conveniently sized accommodation in town, it’s doubtful they’ll troop back to the outskirts just to patronize Wal-Mart.

We are returned to San Francisco, the truck is unloaded and the galleries are arranged- sort of. Keith and I are so tired we can barely stand- but that is a good thing.

Good because, during the run of the Los Angeles Antiques Show, we barely had an opportunity to sit down. We don’t precisely know what the numbers were, but traffic in our stand was brisk. What we saw that was most significant- and a pleasant change from the last couple of years- were the interior designers shopping the show with their clients. Several were old friends we see, and do a bit of business with, every year. Quite a number were designers we see only only occasionally, and a refreshing number were younger, eager to have the opportunity to show their clients the broad range of fine quality items at the show. What’s encouraging, and bodes well for follow-on business, was that the design community, from sole practitioner to AD100, had some wonderful projects going using antiques and artwork.

It was our sense that the experience of dealers in most classes- from furniture to fine art to ethnographic material- did pretty well at the show. Mid century modern was represented, but it didn’t do quite as well at it might have. However, the Los Angeles Modernism Show is opening this coming weekend at the Santa Monica Civic Auditiorium, so perhaps buyers were awaiting that. In fact, a number of mid century dealers at the LA Antiques Show were planning to participate in the Modernism show.