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#2154649 - 09/20/13 05:52 PM New Owner of Steinway, John Paulson
S. Phillips Offline
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#2154660 - 09/20/13 06:06 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Stephen Lacefield Offline
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Registered: 11/29/06
Posts: 195
Loc: St. Louis, MO
Very cool!
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#2154664 - 09/20/13 06:16 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Steve Cohen Offline
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Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Reassuring.

[And I still can't believe they sold Steinway Hall!]
_________________________
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Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

Jasons Music
Maryland/DC/No. VA
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My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2154665 - 09/20/13 06:18 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Music Me Online   content
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Registered: 10/23/12
Posts: 235
Loc: New York
Thanks for posting this.
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...without music, no life...

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#2154672 - 09/20/13 06:29 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bob Newbie Offline
1000 Post Club Member

Registered: 09/02/06
Posts: 1555
my kind of guy!... smile

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#2154682 - 09/20/13 06:41 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Furtwangler Offline
1000 Post Club Member

Registered: 02/22/07
Posts: 1542
Loc: Danville, California
I feel so much better now.

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#2154706 - 09/20/13 07:25 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
boynamedsuse Offline
Full Member

Registered: 07/15/13
Posts: 23
That's pretty cool. His father could not afford to buy a Steinway, and now he will purchase the entire company. It seems like it could be the fulfillment (for a short time anyway) of a lifelong dream of John's.

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#2154725 - 09/20/13 07:49 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
He does seem to respect the Steinway piano. I salute him for this.

I wish him well and hope that his stewardship will be truly successful.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2154737 - 09/20/13 08:38 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
ECP Offline
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Registered: 10/07/09
Posts: 29
I wonder if his sisters are going to finally get a Steinway.
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#2154784 - 09/20/13 10:43 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
SBP Offline
Full Member

Registered: 09/12/12
Posts: 258
He does seem to care about the company. My dad works with a lot of these financial types, and a lot of them are just slimy people out to make a few easy millions in whatever market has potential (ahem-the whole real-estate/tech bubble back in the 2000s). However, there are the rare types who do know what they're doing and strive to do something other than make as much money possible. He seems like one of the latter. I definitely respect him now, and hope he'll take Steinway to a better position in the market. I wholeheartedly wish him the best of luck!

I honestly can't see why his sisters would have cried about the baby grand. I'd be crying tears of joy if my dad went out and replaced my upright with a grand, regardless of the brand (although I'd probably blast through the roof if it was a Steinway). Guess it must've been a real stinker of a baby grand :P
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#2154796 - 09/20/13 11:16 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bob Offline
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Registered: 06/01/01
Posts: 3894
Comes across as very genuine and down to earth.
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www.PianoTunerOrlando.com






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#2154865 - 09/21/13 03:04 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
michaelha Offline
500 Post Club Member

Registered: 06/05/13
Posts: 978
I believe him. Seems like maybe he bought it in defense of what Samick and Kohler were going to do to it. Maybe outsource manufacturing to Pearl River, slap on a Steinway sticker, charge $15K for a B.

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#2154890 - 09/21/13 07:21 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Rich Galassini Online   content
9000 Post Club Member

Registered: 05/28/01
Posts: 9394
Loc: Philadelphia/South Jersey
This is initially reassuring.

But then, every customer and technician and piano teacher I speak with has brought up the question of what I think is going to happen to the company. The sale is common knowlegde. It is something that everyone has interest in and is nervous about. I have always answered that we have to wait and see.

I still feel that way. This video is a good start, for certain, but as Henrik Ibsen said, "A thousand words will not leave so deep an impression as one deed."

Fingers crossed!

This video was beautifully made to reassure us. I hope everything said is genuine.
_________________________
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Cunningham Piano Co.
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#2154904 - 09/21/13 08:14 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Joe Muscara Offline
Full Member

Registered: 06/03/10
Posts: 31
Loc: Houston
Did anyone find it ironic or sad that the shots of Mr. Paulson were done at Steinway Hall, which Steinway has already sold and are planning to move out of?

I'd like him to buy that back.

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#2154941 - 09/21/13 10:04 AM Re: New Owner of Steinway, John Paulson [Re: michaelha]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Originally Posted By: michaelh
Seems like maybe he bought it in defense of what Samick and Kohler were going to do to it.

How could anyone possibly know the reasoning of Samick or Kohler?
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2154947 - 09/21/13 10:22 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
AJB Offline
3000 Post Club Member

Registered: 10/01/05
Posts: 3655
Loc: Surrey, England
Interesting. Seems genuine, which is good news. Pity he is still peddling the ludicrous investment myth, but still his reassurance about preserving the brand and manufacturing etc sounds sincere.

Steinway Hall strikes me as irrelevant: just a building. No one plays buildings. Pianos can be displayed in any modern facility, probably better.

Adrian
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#2154949 - 09/21/13 10:33 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
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Registered: 04/12/05
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Loc: Williamsburg, VA
Adrian,

Out of curiosity, have you been to Steinway Hall in NY? Indeed, any modern facility can display pianos, but the domed recital space in the front of the building was a marquee performance spot. Transferring a bunch of pianos to a new facility, even if it gleams modernity, may lose some of the brand value. And brand value is real value. Of course, Steinway may have accurately counted the lost brand value -- if any -- into the sale decision. But if they're wrong, it wouldn't be the first time that an American company shortchanged the future in the name of the present.
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#2154965 - 09/21/13 11:09 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Originally Posted By: Piano*Dad
Transferring a bunch of pianos to a new facility, even if it gleams modernity, may lose some of the brand value. And brand value is real value.

Of course, we, the great unwashed living in the boonies, make a piano selection based on the architecture of an irrelevant and unseen sales edifice. Brand value?
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2154975 - 09/21/13 11:25 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
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Registered: 04/12/05
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Loc: Williamsburg, VA
Quote:
we, the great unwashed

Well, take a bath, man!

Why do you generalize from your particular situation to the company's more general issues?

The fact that the glories of Steinway Hall didn't help you personally to sell Steinways to Lutheran bachelor farmers in the boonies of frozen Minnesota doesn't mean that the Hall itself contributed nothing to the brand value for LVB. And the NY area is a pretty big market.

I'm not claiming that selling Steinway Hall was a colossal mistake, though some other posters have. I don't have enough information to make that case. All I'm suggesting is that it is possible the sale was shortsighted.

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#2154989 - 09/21/13 12:09 PM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Originally Posted By: Piano*Dad
I'm not claiming that selling Steinway Hall was a colossal mistake, though some other posters have. I don't have enough information to make that case. All I'm suggesting is that it is possible the sale was shortsighted.


You may well be right, possibly due to property value rather than brand value. What price heritage value?

When it comes to brand value, Mr Paulson needs to pay attention to this sort of thing:

Originally Posted By: kalee21
I have today auditioned a superb Steinway D. However, I still believe the E-272 goes beyond the Steinway in terms of the multitude of sound qualities it possesses. It just seems to offer more to me. This is very personal and both are absolutely first class concert instruments. I also found that the action on the E-272 was, for me, superior. I was achieving more with less effort - it just felt right somehow.... That E-272 just speaks to me as no other piano (with the exception of a superb Fazioli concert grand) ever has.
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#2154992 - 09/21/13 12:12 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Steve Cohen Offline
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Registered: 05/26/01
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Loc: Maryland/DC/No. VA
First, Steinway Hall is a strong contributing factor in Steinway's sales in NY. It is like buying a piece of art from a museum as opposed to a commercial art gallery. Its loss will be felt.

Second, there are very few people who were aware of Samick's plans if they were to have acquired Steinway, and they aren't talking.
_________________________
Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

Jasons Music
Maryland/DC/No. VA
Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2154993 - 09/21/13 12:13 PM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Originally Posted By: Piano*Dad
Why do you generalize from your particular situation to the company's more general issues?

Simply because you made the converse generalization.

Having never met a Lutheran bachelor farmer, I trust my ears and fingers when evaluating a piano, rather than trusting the façade of architectural splendor. Steinway is a piano, not a "Hall."
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2154997 - 09/21/13 12:22 PM Re: New Owner of Steinway, John Paulson [Re: Steve Cohen]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Originally Posted By: Steve Cohen
First, Steinway Hall is a strong contributing factor in Steinway's sales in NY.

What is the percentage of pianos sold at Steinway Hall NY in comparison to total sales world wide?

I believe that the image and aura of the 'mother church' in NY is not a significant sales influence to the majority of Steinway buyers. How about the "Halls" in Hamburg or London? Do Americans, or others on this side of the pond, hold them in the same awe as the NY version?
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Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2155005 - 09/21/13 12:38 PM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
Steve Cohen Offline
Yikes! 10000 Post Club Member

Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Originally Posted By: Minnesota Marty
Originally Posted By: Steve Cohen
First, Steinway Hall is a strong contributing factor in Steinway's sales in NY.

What is the percentage of pianos sold at Steinway Hall NY in comparison to total sales world wide?

I believe that the image and aura of the 'mother church' in NY is not a significant sales influence to the majority of Steinway buyers. How about the "Halls" in Hamburg or London? Do Americans, or others on this side of the pond, hold them in the same awe as the NY version?


Have you ever been there or talked to those who have purchased there?

Just like shoppers who are turned off by shabby looking piano stores, many are influenced by the historical architecture and the aura of buying at Steinway hall.
_________________________
Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

Jasons Music
Maryland/DC/No. VA
Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2155017 - 09/21/13 01:00 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Steve,

I have often visited Steinway Hall in New York, have a friend on the staff, and have selected three pianos from that showroom. I have many fond memories of my visits.

However, I don't equate it to the 'brand' that is Steinway. It is beautiful architecture, but I don't believe that sales will suffer because of a change in location or interior décor. We have no idea of how the new location will look. A surprise awaits us all.

If it becomes a new 'icon,' it may become an image for Steinway in the 21st. century, rather than harkening back to the 19th.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2155040 - 09/21/13 02:12 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
rxd Online   happy
1000 Post Club Member

Registered: 03/11/09
Posts: 1801
Loc: London, England
Have they moved out yet? I doubt they will.
It's not an unusual business practice to sell a building and continue occupancy of it but paying rent to the new owners.
_________________________
Concert & Recording tuner-tech, London, England.
"in theory, practice and theory are the same thing. In practice, they're not." - Lawrence P. 'Yogi' Berra.

Eschew obfuscation.



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#2155051 - 09/21/13 02:34 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
Under the deal for the Steinway Hall, Steinway may remain in the building for 14-months rent free, plus an option for another 4 months at a fee. So, they are looking to move out before 18 months, although it's possible they will keep a small presence in the Hall.

Steinway owned the building, but they had sold the land many years ago. The land is now worth much more than the building. Between operating the Hall, and (presumably) paying increasingly expensive rent for the land, Steinway was losing millions of dollars each year. So keeping the Hall wasn't a realistic option.
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#2155158 - 09/21/13 05:55 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bob Offline
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Registered: 06/01/01
Posts: 3894
Edited - off topic



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#2155176 - 09/21/13 06:24 PM Re: New Owner of Steinway, John Paulson [Re: peekay]
4evrBeginR Offline
1000 Post Club Member

Registered: 06/27/09
Posts: 1607
Loc: California
Originally Posted By: peekay
Steinway owned the building, but they had sold the land many years ago. The land is now worth much more than the building. Between operating the Hall, and (presumably) paying increasingly expensive rent for the land, Steinway was losing millions of dollars each year. So keeping the Hall wasn't a realistic option.


Now it all makes sense. No wonder; in that case, it is sensible to sell the building when you don't own the land. It is interesting how they could structure that arrangement in commercial real estate. I guess in NY, it is possible to structure any deal in any arrangement as demonstrated by the derivative traders.
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Art is never finished, only abandoned. - da Vinci

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#2155193 - 09/21/13 07:03 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dave B Offline
1000 Post Club Member

Registered: 08/01/11
Posts: 1974
Loc: Philadelphia area
He certainly said all the right things. Maybe his sisters told him what to say.

I wonder what they think about their brother buying Steinway.

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#2155197 - 09/21/13 07:10 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
He told them it was because he wanted a Steinway B with a factory fitted player.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2155321 - 09/22/13 12:56 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Originally Posted By: Minnesota Marty
Steve,

However, I don't equate it to the 'brand' that is Steinway. It is beautiful architecture, but I don't believe that sales will suffer because of a change in location or interior décor. We have no idea of how the new location will look. A surprise awaits us all.

If it becomes a new 'icon,' it may become an image for Steinway in the 21st. century, rather than harkening back to the 19th.


I sort of agree with Mr Marty here. There is clearly a huge loss but there is a lot of potential for net gain. The 57th st area where the Hall is now seems to be going residential. They would get a lot more exposure, say, on 5th avenue between the Plaza Hotel and Rockefeller Center, which is on the regular domestic and foreign tourist path. Also, best practices in retailing, including store layout concepts, have come a long way since the 57st Steinway Hall was designed. Steinway Hall NY is beautiful, but it can be taken to a better situation and place. Any number of possibilities exist, high quality listening room, etc.

best wishes-
_________________________
phacke

Steinway YM (1933)
...Working on:
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#2155343 - 09/22/13 03:05 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dara Online   blank
1000 Post Club Member

Registered: 06/18/09
Posts: 1046
Loc: west coast island, canada
Best wishes to Steinway Piano and crew.
John is just a beginner in his new position so perhaps allowed some slack for his statement in the above video:

" In my viewpoint, I , you, can't have to many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

Haha, who do you think you're talking to John !
Ya sure.... not much of an expense and a great investment. Is that why you bought all of them all at once?
haha

Very smooth , slick presentation overall ... to be expected from Steinway, and whoever turned out to be the new owner.

Best wishes to Steinway in your production of wonderful instruments and further innovations in instrument creation.

Your manipulative control of piano placement in performance halls , world stages and schools...
and overall indoctrination of Steinway's excellent superiority complex,
detracts from, rather than adds to perceived value , in my opinion.

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#2155369 - 09/22/13 04:58 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Derek Hartwell Offline
Full Member

Registered: 07/03/09
Posts: 219
Loc: United Kingdom

All sounds very altruistic ! Very good for Steinway and all Steinway enthusiasts, but IF I could afford a Steinway or another piano equally expensive I'm not at all certain that Steinway would be my choice. The standard Steinway sound is not my favourite piano sound.
Nevertheless, I wish Steinway and its new owner well in the future! smile
rk
_________________________
Music Teacher (Piano/Theory/Musicianship)

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#2155378 - 09/22/13 05:19 AM Re: New Owner of Steinway, John Paulson [Re: Dara]
Michael Sayers Offline
1000 Post Club Member

Registered: 02/15/13
Posts: 1277
Loc: Stockholms ln, Sverige
Originally Posted By: Dara
Paulson:

" In my viewpoint, I , you, can't have too many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

I found these lines from the video to be problematic. For him to suggest that the supply of Steinway pianos will always be pressured by demand, with the result of ever increasing marginal value for each Steinway piano in the world for the future (or at least during the rest of our lives), seems to assume a lot.


M.

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#2155382 - 09/22/13 05:35 AM Re: New Owner of Steinway, John Paulson [Re: Michael Sayers]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Originally Posted By: Michael Sayers
Originally Posted By: Dara
Paulson:

" In my viewpoint, I , you, can't have too many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

I found these lines from the video to be problematic. For him to suggest that the supply of Steinway pianos will always be pressured by demand, with the result of ever increasing marginal value for each Steinway piano in the world for the future (or at least during the rest of our lives), seems to assume a lot.

That is a brilliant point.

Remember though that he is arguing for Steinway owners to hang on to their pianos (because of their increasing value as an investment) so that the number of used pianos coming on to the market will be severely reduced. They will become gold dust and new ones will become increasingly attractive as an investment. Add in the plan to increase global demand (through geographical coverage, enhanced product quality, and model/market strategy) and you have the stuff of Masters Dissertations if not PhD Theses.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2155398 - 09/22/13 06:37 AM Re: New Owner of Steinway, John Paulson [Re: Derek Hartwell]
Michael Sayers Offline
1000 Post Club Member

Registered: 02/15/13
Posts: 1277
Loc: Stockholms ln, Sverige
Originally Posted By: Derek Hartwell

All sounds very altruistic ! Very good for Steinway and all Steinway enthusiasts, but IF I could afford a Steinway or another piano equally expensive I'm not at all certain that Steinway would be my choice. The standard Steinway sound is not my favourite piano sound.
Nevertheless, I wish Steinway and its new owner well in the future! smile
rk

The tone quality of some pianos, however high, can stand in the way of making a really personal and unique statement vs. the very clear and open tone of the earlier Steinways.

For comparison, Schnabel's recording of the Beethoven sonatas on one of those older and very spiritual sounding Bechsteins is very spiritual sounding. But Hofmann's Casimir Hall performance of Beethoven's Waldstein sonata on an older Steinway is both very spiritual and has the ultimate dark and profound power when needed - I am not sure the latter could have been made to emerge untrammeled through the Bechstein Schnabel used to record Beethoven's sonatas.


M.

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#2155429 - 09/22/13 08:54 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Rickster Offline


Registered: 03/25/06
Posts: 8585
Loc: Georgia, USA
Well, all I can say about this is that John Paulson’s dad couldn’t afford a new Steinway and I can’t either.

However, I have had my eye out for a good used one somewhere around $8K. smile

Rick
_________________________
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#2155439 - 09/22/13 09:25 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dave B Offline
1000 Post Club Member

Registered: 08/01/11
Posts: 1974
Loc: Philadelphia area
I watched the video for the second time and still can't get past the sister crying.

I'm still waiting for that dark green Alpha Romeo Spider. I'll even be nice to my brother.



Edited by Dave B (09/22/13 09:42 AM)

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#2155448 - 09/22/13 09:48 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
Steve Cohen Offline
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Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Originally Posted By: Minnesota Marty
Originally Posted By: Steve Cohen
First, Steinway Hall is a strong contributing factor in Steinway's sales in NY.

What is the percentage of pianos sold at Steinway Hall NY in comparison to total sales world wide?

I believe that the image and aura of the 'mother church' in NY is not a significant sales influence to the majority of Steinway buyers. How about the "Halls" in Hamburg or London? Do Americans, or others on this side of the pond, hold them in the same awe as the NY version?


I was a marketing consultant to Bechstein-America during the years that they operated on Piano Row. My services began a few months after the decision to open on Piano Row was made, and I remained involved for a little over two years. during that time I spent a great deal of my time with the sales force.

While I would agree that the impact of Steinway Hall as a facility was not THE deciding factor in Steinway sales there, it was, and continues to be a strong contributing factor. It "fit" as being a place where one could buy a unique piece of historic Americana, and it made competing with them all the more challenging.

On the other hand Marty rightly points out:

However, I don't equate it to the 'brand' that is Steinway. It is beautiful architecture, but I don't believe that sales will suffer because of a change in location or interior décor. We have no idea of how the new location will look. A surprise awaits us all.


Will they relocate to a different, but equally influential location? It certainly is possible, and I am sure that is their intent, but it will be very difficult to beat the impact of Steinway Hall.
_________________________
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My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2155482 - 09/22/13 11:09 AM Re: New Owner of Steinway, John Paulson [Re: Michael Sayers]
Furtwangler Offline
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Registered: 02/22/07
Posts: 1542
Loc: Danville, California
Originally Posted By: Michael Sayers
Originally Posted By: Dara
Paulson:

" In my viewpoint, I , you, can't have too many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

I found these lines from the video to be problematic. For him to suggest that the supply of Steinway pianos will always be pressured by demand, with the result of ever increasing marginal value for each Steinway piano in the world for the future (or at least during the rest of our lives), seems to assume a lot.


M.






Michael

Some people on this forum would buy the Brooklyn Bridge.

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#2155654 - 09/22/13 05:23 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
SBP Offline
Full Member

Registered: 09/12/12
Posts: 258
Hey man, that's some prime real estate there!

On the topic of Steinways gaining value and beating out inflation, I don't think I've seen many used Steinways sell for more than their original price. Near new (in the last 5 years) and/or freshly rebuilt ones do tend to sell in the $40-60K range, but that's still not above the price that their original owner paid for them. That's still quite close to their original price, but not above it. So they do hold their value better than say, a Kawai or Samick of comparable size/price. Now, I'm not really an expert on used Steinways, nor do I have my dad's financial smarts, but that doesn't look like an increase in value to me smirk I'm probably wrong about that, though
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#2155664 - 09/22/13 05:41 PM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
michaelha Offline
500 Post Club Member

Registered: 06/05/13
Posts: 978
Originally Posted By: Minnesota Marty

How could anyone possibly know the reasoning of Samick or Kohler?


Nobody "knows with 100% certainty" but there's a ton of historical data for similar transactions.

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#2155684 - 09/22/13 06:10 PM Re: New Owner of Steinway, John Paulson [Re: SBP]
pianoloverus Offline
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Registered: 05/29/01
Posts: 19640
Loc: New York City
Originally Posted By: SBP
Hey man, that's some prime real estate there!

On the topic of Steinways gaining value and beating out inflation, I don't think I've seen many used Steinways sell for more than their original price. Near new (in the last 5 years) and/or freshly rebuilt ones do tend to sell in the $40-60K range, but that's still not above the price that their original owner paid for them. That's still quite close to their original price, but not above it. So they do hold their value better than say, a Kawai or Samick of comparable size/price. Now, I'm not really an expert on used Steinways, nor do I have my dad's financial smarts, but that doesn't look like an increase in value to me smirk I'm probably wrong about that, though
To the best of my knowledge all pianos, including Steinways, take the biggest hit in the first few years and usually sell for a loss compared to their original price during that period. In addition, the depreciation schedule in Fine's Piano Buyer shows that the depreciation for Steinway is only marginally less than other makes. If I remember correctly, this was also examined in detail in the Dummies(or Complete Idiots Guide) book on buying a piano where the author(a forum member)says that the depreciation for pianos is generally the same regardless of their make.

I think there is a sweet spot for selling pianos where many of them(and probably Steinway in particular because of their rapid price increases)can be sold for about what they originally cost. I'm guessing this might be after around 10-15 years, but some dealers might have a better estimate.

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#2155782 - 09/22/13 09:26 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
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Most top pianos will sell for more than their nominal purchase price if you wait a while. How many will add 3-5% per year to their value beyond the inflation rate? Well, none. Pianos are a crappy financial investment. That's not their purpose.
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#2155850 - 09/22/13 11:14 PM Re: New Owner of Steinway, John Paulson [Re: Bob]
Ed McMorrow, RPT Online   content
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Registered: 12/09/12
Posts: 2408
Loc: Seattle, WA USA
Bob,
The action fitting procedure is designed to allow for about 2mm difference in string height from one piano to another. That is one of the reasons why the action mounting blocks are tapered and made over-long. So the action frame height can be fit to the string height. Of course for many years the NY Steinways ranged over about 4mm. But string height has always varied in Steinway pianos. And all factory fit actions over-center a little in the tenor and bass.

The last set of NY whippens, (repetitions they call them in NY), was a model of uniformity, every bit as good as the Renner part and maybe a little lighter. They also cost a lot.

If NY abandons the long standard voice up protocol-technicians can count on making more money 10 to 30 years from purchase-in hammer replacement. The voice-down hammers wear out faster.

Sorry to chase the OP OT.
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#2155871 - 09/23/13 12:08 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Originally Posted By: Piano*Dad
Most top pianos will sell for more than their nominal purchase price if you wait a while. How many will add 3-5% per year to their value beyond the inflation rate? Well, none. Pianos are a crappy financial investment. That's not their purpose.


Hello Piano*dad,

An alternative view. You are the economics dept chairperson, but I don't see it quite so badly if you actually "invested" in (not played and used) an S&S many years ago. Feel free to poke holes in the thinking:

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$1786 = 8 MINUS taxes when DJI components change
Ref:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

Edit, inappropriate reference data

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, > 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer

It is assumed that the old S&S is stored optimally, analogous to fine Burgundy, oil painting, etc., and professionally resold. Maybe a New Mexico basement at altitude? cool and relatively dry...
Yes there will be a dealer commission bring the investment to market. But you get better selected sound board materials in the old piano as availability of good materials continues to lessen. S&S at the NY Hall was selling an old A for way above the price of a new one, and people on this forum have written it sounds better than the new stuff. I played it to and tend to agree, but I am not that much of a connoisseur.


Best wishes-


Edited by phacke (09/23/13 03:47 AM)
_________________________
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Steinway YM (1933)
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#2155888 - 09/23/13 12:30 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
Your DJIA numbers are already inflation-adjusted. So it's beyond keeping up with inflation.

Your S&S numbers are not inflation-adjusted. You also don't take into account to cost of storage and maintenance over 100 years.

Seems like a flawed comparison.

_________________________
Working on RCM Grade 8

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#2155912 - 09/23/13 01:27 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Good catch, Mr. peekay. Indeed the DJIA numbers seemed too bad. Here is the comparison again then. Stocks look better. I think storage costs could be made negligible with some knowledge however. The 100 y was just to get the long term trend line, the returns could be better or worst for more realistic shorter periods.

Best wishes-

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$79.51 = 188.7 MINUS taxes when DJI components change
Ref:
http://www.scaruffi.com/politics/dow.html

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer


Edited by phacke (09/23/13 03:50 AM)
_________________________
phacke

Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2156507 - 09/23/13 10:28 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bob Offline
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Registered: 06/01/01
Posts: 3894
smile
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#2156603 - 09/24/13 01:56 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bellay Offline
Junior Member

Registered: 09/23/13
Posts: 1
Loc: Banned
Hello everyone!I am very nice to see you all.And hope you have a good time.

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#2156668 - 09/24/13 06:29 AM Re: New Owner of Steinway, John Paulson [Re: phacke]
Rich Galassini Online   content
9000 Post Club Member

Registered: 05/28/01
Posts: 9394
Loc: Philadelphia/South Jersey
Originally Posted By: phacke
Feel free to poke holes in the thinking:

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$1786 = 8 MINUS taxes when DJI components change
Ref:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

Edit, inappropriate reference data

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, > 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer

It is assumed that the old S&S is stored optimally, analogous to fine Burgundy, oil painting, etc., and professionally resold.


I love what you did here phacke. I wonder how other brands would fair that have been around for a century. Is Steinway unique in beating inflation in their retail selling prices or has it simply become more expensive to make a great piano?

How would Mason & Hamlin, Bechstein, Bosendorfer, and others fair in this same comparison? I don't have the answer - just asking the question.
_________________________
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Cunningham Piano Co.
Phila, Pa.
Dir. Line (215) 991-0834
rich@cunninghampiano.com
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#2156702 - 09/24/13 08:42 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
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Registered: 04/12/05
Posts: 10422
Loc: Williamsburg, VA
Ah, Phacke, my amusement for the morning!

Economists are often accused (and sometimes rightly so) of assuming their way out of problems.

zero storage costs? Hmmm. Space …. the final frontier. Climate controlled storage has a price in the market. One hundred years of it isn't free. Using your own space (if such a thing magically dropped in your lap) isn't free either … opportunity cost.

Oh, I think you would also have to pay for insurance. If you don't, you bear more risk. Fires burn down houses, even ones with Steinways in them. Risk is cost.

Hey Rich, don't pianos depreciate if they are stuck in a basement for 100 years …

[just got an image of the usual fright movie in which someone hears a noise in the basement, grabs a candle, and …. oh, the horror]

Speaking of more realistic comparisons, pianos are bought to be used. So, if you had dumped $930 into some package of assets that paid a 3.5% real return on average, that basket would be worth around $29,000 today (in 1913 dollars). What does the hulk of a 1913 sell for to a rebuilder today? Wild guess … under 15K in today's dollars.

That's not a good "financial" investment. But it might have been one heck of a purchase.

The ground is not covered in $20 bills for us to find with no effort. There is a reason for this. Even if the federal reserve periodically dropped money by helicopter all over the streets, it would tend to get picked up pretty quickly. Point: obvious profit opportunities don't tend to last. People pick up the bills. How many Steinways are sitting unused in perfect climate-controlled storage in order to beat the crap out of financial markets 30-40 … 100 years in the future. Not many, I'll warrant. No bills waiting to be picked up.

There have been times and places where people did use real goods in place of financial assets in order to store their wealth. Back in the 1970s in places like Brazil one could see lines of 30 VWs all in a neat row on large farms and estates. Financial markets were in a state of collapse because of hyper-inflationary policies pursued by populist governments. Wealthy people turned to a crappy second best way to keep some asset value. What they couldn't spirit out of the country or turn into gold they used to buy autos, which even if they depreciated in the climate, held their value better than cash which collapsed by the day.

I wouldn't be surprised if some people in those circumstances converted some of their wealth into unused Steinways!




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#2156722 - 09/24/13 09:11 AM Re: New Owner of Steinway, John Paulson [Re: Rich Galassini]
Derek Hartwell Offline
Full Member

Registered: 07/03/09
Posts: 219
Loc: United Kingdom
Originally Posted By: Rich Galassini
[/quote

How would Mason & Hamlin, Bechstein, Bosendorfer, and others fair in this same comparison?

It may or may not be relevant, but Bosendorfer are owned, I understand, by Yamaha.
Bosendorfer may change (or be changed) but Yamaha's(foreseeable)future seems assured with the company's going from strength to strength !
rk
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Music Teacher (Piano/Theory/Musicianship)

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#2156726 - 09/24/13 09:17 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Withindale Offline
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Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Originally Posted By: Piano*Dad
I wouldn't be surprised if some people in those circumstances converted some of their wealth into unused Steinways!


How would they have fared, I wonder?

Do you, does anybody, have any figures over the past, say, 125 years for the price of a Steinway D at actual and "present" values compared to commodoties such as a loaf of bread or whatever yardsticks are used for this sort of thing?

Please rephrase my question as appropriate to fit in with economics terminology!
_________________________
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Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2156731 - 09/24/13 09:22 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Thrill Science Offline
500 Post Club Member

Registered: 09/04/11
Posts: 540
Loc: California
One of the secondary reasons I bought a new Bösendorfer over a new Steinway (the primary reason is that it sounds and performs better) is many of the outrageous statements Steinway and its dealers make.

For example:

http://www.steinwaypianos.com/kb/resources/investment

Quote:
The fact is, the appreciation of a Steinway is even more impressive when you look past the previous ten years - and take an historical look at appreciation over the past few decades. The numbers are nothing less than remarkable: Today, if the owner of a vintage Steinway grand decided to gauge the value of his or her piano on the open market, it is likely that the piano would command a price 4.3 times higher than the original retail cost. As the first chart shows, this figure is based on a representative sampling of Steinway grands of all ages - pianos which were created from before the turn of the century up through 1978.


Quote:

Furthermore, Steinway vertical pianos (uprights) command a handsome resale value as well - selling, on average, at a price 2.2 times higher than their original cost. Of course, as interesting as these figures are, there is one important point to keep in mind: When you own a Steinway, you possess a timeless creation that is passed on with pride as a beloved family heirloom. No matter how financially precious your Steinway becomes, you will find that it is a treasure with which you do not wish to part.


These statements are pure nonsense. A 50 year old piano of any make isn't worth much as a performance instrument without a minimum of $20,000 of work. (It may still make a nice piece of furniture to put your family picture frames on.)

Bösendorfer doesn't do any of this. Maybe its because people who have the cash to buy one know a thing or two about what an "investment" is.

I'm 50 years old now; if in 25 years, I'm still in need of a "performance instrument", I fully intend to ditch my then worn-out Bösendorfer and get a brand new, top of the line something else (or pay the $$$ to have it restored to new specifications).

This is not an "investment". It's like a car. They wear out. After a point, it's better to discard and replace. Steinway's Concert Bank pianos are pulled out of service after 8-10 years, and then buffed up and sold to people who just want a huge "Steinway" in their living room.


Edited by Thrill Science (09/24/13 09:40 AM)
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#2156744 - 09/24/13 09:57 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
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Registered: 04/12/05
Posts: 10422
Loc: Williamsburg, VA
Here's another way to look at the "piano as investment" nonsense.

Let's make the silly presumption that a piano didn't depreciate at all no matter what you did with it (stored it, played it, whatever).

So, you put $930 into your new beast in 1913. Today, a new one sells for 70K, and so your perfectly un-depreciated one sells for that as well. Silly, I know. Work with me.

OK, your total annual rate of return is roughly 4.3%. A lot of that "return" is just inflation. So let's subtract out the average inflation over the same century. That will give the "real rate of of return." Well if you do that, your real rate of return on this "asset" that is stored without cost, risk, or depreciation is about 1.1% per year. The real rate of return on financial assets over the same century was quite a bit higher.

All we have really shown is that the selling price of a new Steinway has gone up a little bit faster than the inflation rate. That's it. A lot of things have gone up in price consistently faster than the inflation rate, and a lot of things have gone up more slowly in price than the inflation rate. Top shelf pianos, actually, are one of the few durable goods whose price has not gone up more slowly than the inflation rate. This is because there has been much less mechanization of the manufacturing process than in, say, the making of automobiles.
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#2156772 - 09/24/13 10:48 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Michael Sayers Offline
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Registered: 02/15/13
Posts: 1277
Loc: Stockholms ln, Sverige
Originally Posted By: Piano*Dad

All we have really shown is that the selling price of a new Steinway has gone up a little bit faster than the inflation rate. That's it.

For pianos as financial investments I tend to think of true collectibles such as one-of-a-kind art case pianos.


M.

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#2156780 - 09/24/13 11:08 AM Re: New Owner of Steinway, John Paulson [Re: Michael Sayers]
Ed McMorrow, RPT Online   content
2000 Post Club Member

Registered: 12/09/12
Posts: 2408
Loc: Seattle, WA USA
Absolutely true. One of a kind art cases are unique items.

Since the supply of stock Steinways continues to grow-collectability does not factor into rational pricing.

The present musical utility is the biggest factor in determining price for a used Steinway or other fine piano. If it plays and sound wonderful, and no mechanical weaknesses are present, the rational value comes from comparing the used one to new similar models.

That is why properly rebuilt Steinways are the main competition for new Steinways. They can represent the best value. The really good ones are priced a little low in todays market due to the weak economy. So if you find one today and you agree with Mr. Paulson's "Bullish" buy of the company-you are a savvy investor-just on a slightly smaller scale. And with todays low interest rates-a "leveraged" purchase of a perfectly rebuilt Steinway, will be your best musical investment.
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#2156783 - 09/24/13 11:14 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Originally Posted By: Piano*Dad
This is because there has been much less mechanization of the manufacturing process than in, say, the making of automobiles.

And one might add changes in design and materials.

Last Christmas there was an amazing kingfisher blue Rolls Royce Silver Ghost, "the best car in the world", sitting outside The Bull in the village.

They don't make them like that no more, they don't.
_________________________
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Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2156828 - 09/24/13 12:41 PM Re: New Owner of Steinway, John Paulson [Re: Ed McMorrow, RPT]
laguna_greg Offline
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Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Originally Posted By: Ed McMorrow, RPT


That is why properly rebuilt Steinways are the main competition for new Steinways. They can represent the best value. The really good ones are priced a little low in todays market due to the weak economy.


Ed, this is absolutely true. And I generally find that the rebuilt S&Ss sound better than the new ones, so it's a great value all the way around!
_________________________
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1919 Mason & Hamlin AA
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#2156914 - 09/24/13 04:04 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
michaelha Offline
500 Post Club Member

Registered: 06/05/13
Posts: 978
I love it when people use charts from the 20th century to try to predict future financial performance. Those days are gone, and aren't going to happen here (the USA) for a while. We'll be lucky if we can maintain our living standards and not spiral into a deflationary environment which the Feds have been fighting since the financial crisis.

Also reminds me of people who invest in wines. Supposedly it beat the market by a hair if you look at the past 25 years. And it has similar issues with storage and cooling. I think someone spun up a Bordeaux ETF.

Anyways, I prefer to drink my wines and play my piano, in that order.

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#2156921 - 09/24/13 04:17 PM Re: New Owner of Steinway, John Paulson [Re: laguna_greg]
Steve Cohen Offline
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Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Originally Posted By: laguna_greg
Ed, this is absolutely true. And I generally find that the rebuilt S&Ss sound better than the new ones, so it's a great value all the way around!


A great value for everyone....except Steinway!
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Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2156955 - 09/24/13 05:07 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
AJB Offline
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Registered: 10/01/05
Posts: 3655
Loc: Surrey, England
Piano Dad - apologies for slow reply. I don't check in as often as I used to. Yes, I have been to Steinway Hall a few times in the last couple of years. From my perspective I found it old fashioned and unattractive and if anything a drag on the brand, that kept S&S too anchored in the past. This is of course a very personal perspective (as I like cutting edge architecture) and others will have different, equally valid, views. As it happens I also find Steinway's facility in London to be beige, gloomy and old fashioned too!

However, for me, whilst the sales building may or may not attract me as a customer, it doesn't have much impact on the rational appreciation or otherwise of the pianos versus competing instruments from the likes of Fazioli and Steingraeber. Not that I am in the market anymore.

Adrian
_________________________
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#2156981 - 09/24/13 05:36 PM Re: New Owner of Steinway, John Paulson [Re: Steve Cohen]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Originally Posted By: Steve Cohen
Originally Posted By: laguna_greg
Ed, this is absolutely true. And I generally find that the rebuilt S&Ss sound better than the new ones, so it's a great value all the way around!


A great value for everyone....except Steinway!

Steve,

The exclamation point reveals your rather snide attitude toward Steinway. Pity.

You might consider an alteration to your signature line, such as:

"My postings, unless stated otherwise, are my personal opinions, not those of my clients, or of Larry Fine and the publication I represent."
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It's much easier to bash a Steinway than it is to play one.

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#2156983 - 09/24/13 05:41 PM Re: New Owner of Steinway, John Paulson [Re: Withindale]
Voltara Online   content
Full Member

Registered: 07/29/09
Posts: 127
Originally Posted By: Withindale
Do you, does anybody, have any figures over the past, say, 125 years for the price of a Steinway D at actual and "present" values compared to commodoties such as a loaf of bread or whatever yardsticks are used for this sort of thing?

As an investment, loaves of bread would likely prove even more problematic than Steinways with respect to cost of climate-controlled storage and deterioration in condition over the span of 125 years...

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#2156990 - 09/24/13 05:46 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
A loaf of bread is one of the commodities used to determine inflation rates.
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Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2157003 - 09/24/13 06:06 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
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Registered: 04/12/05
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Quote:
As an investment, loaves of bread would likely prove even more problematic than Steinways with respect to cost of climate-controlled storage and deterioration in condition over the span of 125 years...


Geez, and all this time I thought it improved with age, just like a piano …
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#2157066 - 09/24/13 08:20 PM Re: New Owner of Steinway, John Paulson [Re: Steve Cohen]
laguna_greg Offline
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Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Originally Posted By: Steve Cohen
Originally Posted By: laguna_greg
Ed, this is absolutely true. And I generally find that the rebuilt S&Ss sound better than the new ones, so it's a great value all the way around!


A great value for everyone....except Steinway!


Steve My Dear,

Value is always held only in the eye of the buyer.

All your comment really means is that "Steinway", whoever they are at the moment, should learn from their own history (but has not). Amazing how this is a lesson most everybody in business skips over, including yourself obviously (that you can say out loud, anyway).

The mourners are coming in a good fortnight. I've collected enough ashes, now that the weather has turned. All we lack is enough sackcloth and perhaps, by then, I can...
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2157177 - 09/25/13 12:10 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Hello Piano dad,

I appreciate you entertaining the question. It is clear that that there are better investment vehicles, the exercise was just to see if it was a 'bad' or unviable one.

A couple comments though, some in my original comments, others not.

Storage Environment. It is of course much more viable if if your natural environment around your storage is favorable enough. I can say my 1933 piano, original, works good, and it has not seen anything close to an ideal environment.

Can it be sold as new: As I mentioned, you have to subtract out the dealer costs. But dealers have pianos sitting around for years that they sell as new. I have often wondered about the Estonia, which has been rising fast in value as its reputation has come up. Has it been worth while for dealers just to hold them in anticipation of a better price the following year or so?

Art case (or not): Indeed a special but timeless design that distinguishes it from a commodity item should certainly be favorable.

Opportunity costs of the space: Yes, the unused pingpong table in the insulated but unfinished part of the basement has to go, or maybe that ugly wet bar that the previous owner made in the 70's. With a simple unistrut rack, I could probably store 3-4 high. In all seriousness though, I am guessing a Ferrari or Aston Martin would be better investment use of the space. Obviously this concept only works as an incremental cost within an existing infrastructure. If you have to build a building, well.

Incremental percentage rate of gain over inflation: I actually think my way of quantifying it was easier to evaluate. 75/24 or 3.2x multiple on inflation (or subtract one, 220% of inflation, as a percentage) over the long term. It is hard to see the effect of a delta in percentages compounded over the long term.

Insurance: I definitely forgot this one, the capital investment must be protected from impairment. I happened to call my insurance agent today for some other business, and what do you know, my default personal belongings allowance as it is will cover one new big S&S. Now, I am wondering conversely, how much would it cost insurance-wise to make sure that any retirement capital I have placed in the stock market will also be there when I retire. That cost would have to be subtracted as a quantification of the risk. Yes, I know I am lumping market risk into the pot. If people don't want pianos any more (god forbid) the basement piano is also impaired. Well you can still play it!

>you wrote:The ground is not covered in $20 bills for us to find with no effort. There is a reason for this. Even if the federal reserve periodically dropped money by helicopter all over the streets, it would tend to get picked up pretty quickly. Point: obvious profit opportunities don't tend to last. People pick up the bills. How many Steinways are sitting unused in perfect climate-controlled storage in order to beat the crap out of financial markets 30-40 … 100 years in the future. Not many, I'll warrant. No bills waiting to be picked up.

Yes, this rarity could potentially lead to the item being of unusually high value.

Forgive me for wasting everyone's time (and darn I have wasted mine). I have no forseeable intention of doing this. I hope at least this provided some entertainment value, and possibly better ideas than mine will develop.

Best wishes-


Edited by phacke (09/25/13 01:05 AM)
_________________________
phacke

Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2157190 - 09/25/13 12:51 AM Re: New Owner of Steinway, John Paulson [Re: Rich Galassini]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Originally Posted By: Rich Galassini
Originally Posted By: phacke
Feel free to poke holes in the thinking:

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$1786 = 8 MINUS taxes when DJI components change
Ref:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

Edit, inappropriate reference data

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, > 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer

It is assumed that the old S&S is stored optimally, analogous to fine Burgundy, oil painting, etc., and professionally resold.


I love what you did here phacke. I wonder how other brands would fair that have been around for a century. Is Steinway unique in beating inflation in their retail selling prices or has it simply become more expensive to make a great piano?

How would Mason & Hamlin, Bechstein, Bosendorfer, and others fair in this same comparison? I don't have the answer - just asking the question.


Hello Mr. Galassini,

In all seriousness, I would compare the these figures with the cost of capital, and then see if there is any upside to think about.

Best regards-
_________________________
phacke

Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2157199 - 09/25/13 01:24 AM Re: New Owner of Steinway, John Paulson [Re: phacke]
laguna_greg Offline
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Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Hi phake,

One thing you've forgotten is the cost of renovation/rebuilding in your estimates. Well, not only you, but everyone who's commented on the actuarial analysis.

After >25 years, the instrument will require some kind restoration or other, even if it has not been played at all. How much? What kind? This is not an insignificant cost and can easily undermine any calculation of long-term worth. We're probably talking about, what, $20K US at a minimum? What about sound board failure in this time frame, even if it is in the minority of instruments? Suddenly, the cost is not so small.

Please, let me/us know what you think!
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2157219 - 09/25/13 02:04 AM Re: New Owner of Steinway, John Paulson [Re: laguna_greg]
beethoven986 Offline
3000 Post Club Member

Registered: 01/20/09
Posts: 3367
Originally Posted By: laguna_greg

Please, let me/us know what you think!


Last year, the factory owned gallery here did a presentation for the PTG chapter on appraising the Steinway piano. If my memory is correct, the presenter said that the cost of their Restoration Center rebuilds are 85% of what a new comparable instrument would cost. Other non OEM rebuilders can cost from 70%-80%, or more. Anything less than this will likely yield sub-par work.
_________________________
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M.Mus. Piano Performance & Literature 2011
PTG Associate Member
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#2157225 - 09/25/13 02:27 AM Re: New Owner of Steinway, John Paulson [Re: laguna_greg]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Originally Posted By: laguna_greg
Hi phake,

One thing you've forgotten is the cost of renovation/rebuilding in your estimates. Well, not only you, but everyone who's commented on the actuarial analysis.

After >25 years, the instrument will require some kind restoration or other, even if it has not been played at all. How much? What kind? This is not an insignificant cost and can easily undermine any calculation of long-term worth. We're probably talking about, what, $20K US at a minimum? What about sound board failure in this time frame, even if it is in the minority of instruments? Suddenly, the cost is not so small.

Please, let me/us know what you think!


Greetings, Mr. Greg.

As for soundboard, how about loosening the string in storage to remove load on the board? As for the action parts, I think keeping the critters out would be a prime consideration. I am interested myself in how the hammers might change with time, if at all. There is no upside for sure if you have to rebuild it.

Best wishes-
_________________________
phacke

Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2157510 - 09/25/13 03:34 PM Re: New Owner of Steinway, John Paulson [Re: phacke]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Retail estimates I know of, in US dollars,

replace hammers- $3-6,000
replace strings- $5-7,000
replace soundboard- $10-15,000
remake custom keyboard- Jeepers, anybody have a price on that?
refinish case- $5-10,000
fancy stuff with the scale geometry- ? Oy!
reshaping the capo bar- ? (I can't even guess)
custom action work- anybody care to comment?

Felts harden/deteriorate over time even if you don't play them.
Soundboards crack more because of changes in atmospheric conditions than anything else.
Strings rust whether you play them or not.
You might want some obvious things improved a bit by a master rebuilder e.g. the capo bar, etc., if it will make a big difference in the end.

So even if you store the instrument perfectly over 25+ years, you are still talking a significant capital investment over time in maintenance and upkeep. Heck, 30 years from now you might want to try one of the new-fangled actions in your old Steinway. How much will that cost?
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2157793 - 09/26/13 03:43 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Hi Mr. Greg,
This is still alive? OK.
You wrote: After >25 years, the instrument will require some kind restoration or other, even if it has not been played at all.

Let's use that 25 y lifetime and assume that is at 25 C and 50% RH. Degradation processes are usually Arrhenius in nature, and can be approximated with a factor of 2 increase degradation rate with a 10 C increase of Temperature. If we take that to the basement in the new mexico mountains where the ground temperature is less than 50F(10C), and maintain the piano for most of the year at 10C or less, that factor change in degradation rate is 0.36. 25 years/.36 = 70 years.

Now, the influence of RH is less cut and dry, but on average it seems that a 10% RH increase leads to a 1.5 increase in degradation rate. If we can maintain the RH in the desert basement at around 20 % RH (The meter I saw in Steinway Hall in NY around x-mas time said 17%RH), the change in degradation rate factor goes from .36 to .11. So, 25 years/.11 = 227 years before rebuild is necessary. I hope I got the math right, but it definitely gives the general idea.

> Heck, 30 years from now you might want to try one of the new-fangled actions in your old Steinway.

Something like this is actually the very biggest risk that I see. However, S&S has been very consistent in their model designations. I think this has helped the rebuild business and the value of old S&S pianos. Yamaha, Kawai makes nice pianos, but when their old model is replace by a new model, the prices of the old models go down.

If I got wind that Steinway were to buy out WNG, and such components were to become the new norm incompatible with the old ones, or some major change like that, I would immediately try to liquidate this hypothetical inventory before it did.

When Kohlberg groups bid for S&S, it looked like it was in the Kohlberg DNA to make complementary acquisitions. I wouldn't have been surprised if they would have moved to make such major changes.

All the best-


Edited by phacke (09/26/13 05:14 AM)
_________________________
phacke

Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2157797 - 09/26/13 03:57 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
michaelha Offline
500 Post Club Member

Registered: 06/05/13
Posts: 978
OK, nevermind. I guess I'll just buy a mutual fund at T.Rowe Price.

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#2157862 - 09/26/13 07:36 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Thrill Science Offline
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Registered: 09/04/11
Posts: 540
Loc: California
Challenging Steinway's statements that a piano is an "investment" in the very strict financial sense (and not meaning its an investment in your quality of life, intellectual development, etc) is completely fair. It's really hard to imagine that anyone would seriously consider a piano a financial investment (with rare exceptions for historically significant instruments.)

It's odd that Steinway's primary pitch is investment and prestige value, and not as a musical instrument.

And you wonder if the brand will continue to go this way. I'd bet that you'd start seeing some "Boston" and "Essex" models start to use the Steinway brand as their primary designator.
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#2157883 - 09/26/13 08:34 AM Re: New Owner of Steinway, John Paulson [Re: phacke]
Rich Galassini Online   content
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Registered: 05/28/01
Posts: 9394
Loc: Philadelphia/South Jersey
Originally Posted By: phacke

Greetings, Mr. Greg.

As for soundboard, how about loosening the string in storage to remove load on the board?


This is not really possible with a compression crowned board. The load is part of what keeps it intact in the first place.
_________________________
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Cunningham Piano Co.
Phila, Pa.
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#2157886 - 09/26/13 08:40 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
Steve Cohen Offline
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Registered: 05/26/01
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Loc: Maryland/DC/No. VA
Originally Posted By: Minnesota Marty
Originally Posted By: Steve Cohen
Originally Posted By: laguna_greg
Ed, this is absolutely true. And I generally find that the rebuilt S&Ss sound better than the new ones, so it's a great value all the way around!


A great value for everyone....except Steinway!

Steve,

The exclamation point reveals your rather snide attitude toward Steinway. Pity.

You might consider an alteration to your signature line, such as:

"My postings, unless stated otherwise, are my personal opinions, not those of my clients, or of Larry Fine and the publication I represent."


Hi Marty.

You misinterpreted my position. Used Steinway sales and the prices that they sell for benefit buyers, rebuilders, and dealers. However, they are the major competition for new Steinways.

That point was overlooked in the post I commented on.
_________________________
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Since 1937.

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My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2157911 - 09/26/13 09:19 AM Re: New Owner of Steinway, John Paulson [Re: Steve Cohen]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Originally Posted By: Steve Cohen
Originally Posted By: laguna_greg
Ed, this is absolutely true. And I generally find that the rebuilt S&Ss sound better than the new ones, so it's a great value all the way around!

A great value for everyone....except Steinway!

That comment was no doubt in jest, but in fact it is highly debatable. One could argue convincingly that the demand for new Steinways would fall if there were no ready market for used ones.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2157917 - 09/26/13 09:31 AM Re: New Owner of Steinway, John Paulson [Re: michaelha]
Piano*Dad Offline
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Registered: 04/12/05
Posts: 10422
Loc: Williamsburg, VA
Originally Posted By: michaelh
OK, nevermind. I guess I'll just buy a mutual fund at T.Rowe Price.


Wise choice. grin

This discussion of what set of wacky notions might allow us to generate a "Steinway Platinum Fund" of warehoused instruments is theater of the absurd.
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#2157923 - 09/26/13 09:46 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
It's just a matter of time until you can buy "Steinway Piano Futures" on the commodities markets. Personally I would hedge any "quality risk" with a straddle of a Steinway Piano Future Call Option and a Steinway Piano Future Put Option ensuring my self of either making money or getting hold of the underlyer which might be of resale value for investors from emerging markets. I would also hedge the inflation risk. Furthermore, if I were Steinway, I would sue any other big piano maker because they also use strings which (if you consider it) must be a Steinway invention anyway...

And by the time I was done investing, hedging and suing I would be too old and either mentally or physically unable to play..


Edited by wimpiano (09/26/13 09:52 AM)
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#2157938 - 09/26/13 10:13 AM Re: New Owner of Steinway, John Paulson [Re: Thrill Science]
Plowboy Offline
2000 Post Club Member

Registered: 06/26/08
Posts: 2397
Loc: SoCal
Originally Posted By: Thrill Science

It's odd that Steinway's primary pitch is investment and prestige value, and not as a musical instrument.


Really? Are you sure about that?
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Gary

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#2157941 - 09/26/13 10:23 AM Re: New Owner of Steinway, John Paulson [Re: Withindale]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Originally Posted By: Withindale
That comment was no doubt in jest, but in fact it is highly debatable. One could argue convincingly that the demand for new Steinways would fall if there were no ready market for used ones.

Ian,

I'm not so sure it was in jest. Steve has taken shots at S&S in a number of previous threads, most notably the use of the term "All Steinway School." I read the exclamation point to be an expression of 'Goody, Steinway won't benefit.'

The thing that concerns me is his position with "Piano Buyer" and that he often makes statements as facts, or personal opinion which runs contrary to the purpose of "PB". Everything he states carries the weight of the publication unless he states a disclaimer. Such a disclaimer is not contained in his signature line, as I pointed out. In fact, it is prominently omitted.

Mr. Fine works to provide information which is fair and balanced. For that reason, his publication is consistently recommended to piano shoppers and piano lovers alike. The statements of Mr. Cohen often are of a very different tone or viewpoint than that of the publication. It is the juxtaposition of opinion which, I believe, is not clear to the readers of Piano Forum.

It is easy for those of us who are regulars to react with, "Oh, that's just Steve ... " However, to the new member, and new members show up daily with questions, a contradiction often arises. "Piano Buyer" is recommended, yet its most prominent representative on this forum publically opines in very different directions.

I hold a great deal of respect for Steve. He is well respected in the industry and has a wealth of experience. However, it is often unclear if his viewpoint is personal opinion, or if he is making statements as an employee and representative of the publication. The implication of his association with "Piano Buyer" is always a factor in any of his postings.

The owner of Piano World is very clear in the requirement that professionals in the industry clearly state their affiliation and/or position. This allows all readers to make their own assessment, and draw their own conclusions, about what, and how, information and opinion is presented. When there is a dual affiliation, a unique situation is created and that situation raises questions of conflict of interest. Clarity of viewpoint becomes important.

Sincerely,
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2157944 - 09/26/13 10:29 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Rank Piano Amateur Offline
1000 Post Club Member

Registered: 08/11/07
Posts: 1793
Gary: That was certainly the basis on which a Steinway dealer tried to sell me one some years ago. Essentially, according to this dealer, there were four reasons to buy a Steinway, in the following order of importance:

1. Investment value
2. Prestige factor
3. Because no other piano is worth owning and no other dealership can be trusted, it follows that Steinway is the one to buy (from this dealership, of course).
4. Steinways are the best pianos.

I think that the very unhappy time I spent at the particular Steinway dealership played an important role in my view of the brand. It would have been one thing if I had fallen in love with a Steinway piano, but I did not.

One helpful aspect of the Piano Forum has been reporting by others who were shopping for pianos and who were reading Steinway dealership websites that caused me to conclude that my experience at the particular dealership was not unique. I might otherwise have written it off as an unfortunate peculiarity of the particular dealership. As it stands, however, I am inclined to the view that Steinway itself must bear some responsibility, given how widespread the sales pitch seems to be.

In any event, I did not fall in love with a Steinway piano--to the contrary, I did not even like the new ones I tried all that much.



Edited by Rank Piano Amateur (09/26/13 10:48 AM)

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#2158402 - 09/27/13 04:25 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Caowner2013 Offline
Full Member

Registered: 03/17/13
Posts: 79
As a consumer shopping for a grand, I have never understood the "investment" angle.

An object that has "investment" value needs intrinsic value that appreciates over time. Gold, precious jewels and stones, arts, certain antiques, items that are rare and unique and are generally valued by everyone to be something worthy of acquisition.

A piano made in gold? Studded with diamonds or precious jewels? Played and owned by Bernstein? Rubinstein? Horowitz? Stern? Beethoven himself?

A standard piano does NOT appreciate over time. Every single person buying a used piano is looking to pay less for it. Base on our analysis, purchasing and then owning a piano actually incurs significant and non-trivial ongoing costs.

If a loan is used for the purchase, there is interest cost. Environmental control adds cost, insuring a piano adds cost, changing the fire-sprinklers to something not water costs a bundle, regular tuning adds cost, periodic regulation service adds cost, piano cover, string cover, key cover and bench are all costs. Inflation itself is a form of cost in resale price. Moving it also can incur costs.

The actual purchase price itself has long-term cost because it can no longer be invested in something else that can actually appreciate; like stocks? other forms or securities? What would I get in 10 years if I invest $X dollars in Google or Apple or Microsoft versus sinking that amount into a piano? Especially when some stocks pay dividends?

We have heard salespeople using this "investment" pitch and we just politely ignore them. A standard piano does not appreciate in value and has no intrinsic monetary value worthy of being an "investment" target.

What is truly valuable are the intangibles. We may love the sound. The kids may enjoy learning and improve rapidly. I may start taking lessons and discover the inner musician. The ability to bring wonderfully played live music into the house. The opportunities to spend quality and memorable times together as a family. All those are much more important when considering a purchase.

Just my two dollars :-). Two cents ain't worth much these days :-).


Edited by Caowner2013 (09/27/13 04:34 AM)

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#2158497 - 09/27/13 09:28 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
Steve Cohen Offline
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Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Originally Posted By: Minnesota Marty
Originally Posted By: Withindale
That comment was no doubt in jest, but in fact it is highly debatable. One could argue convincingly that the demand for new Steinways would fall if there were no ready market for used ones.

Ian,

I'm not so sure it was in jest. Steve has taken shots at S&S in a number of previous threads, most notably the use of the term "All Steinway School." I read the exclamation point to be an expression of 'Goody, Steinway won't benefit.'

The thing that concerns me is his position with "Piano Buyer" and that he often makes statements as facts, or personal opinion which runs contrary to the purpose of "PB". Everything he states carries the weight of the publication unless he states a disclaimer. Such a disclaimer is not contained in his signature line, as I pointed out. In fact, it is prominently omitted.

Mr. Fine works to provide information which is fair and balanced. For that reason, his publication is consistently recommended to piano shoppers and piano lovers alike. The statements of Mr. Cohen often are of a very different tone or viewpoint than that of the publication. It is the juxtaposition of opinion which, I believe, is not clear to the readers of Piano Forum.

It is easy for those of us who are regulars to react with, "Oh, that's just Steve ... " However, to the new member, and new members show up daily with questions, a contradiction often arises. "Piano Buyer" is recommended, yet its most prominent representative on this forum publically opines in very different directions.

I hold a great deal of respect for Steve. He is well respected in the industry and has a wealth of experience. However, it is often unclear if his viewpoint is personal opinion, or if he is making statements as an employee and representative of the publication. The implication of his association with "Piano Buyer" is always a factor in any of his postings.

The owner of Piano World is very clear in the requirement that professionals in the industry clearly state their affiliation and/or position. This allows all readers to make their own assessment, and draw their own conclusions, about what, and how, information and opinion is presented. When there is a dual affiliation, a unique situation is created and that situation raises questions of conflict of interest. Clarity of viewpoint becomes important.

Sincerely,


Marty,

First, ever since my relationship with Piano Buyer began, a disclaimer has been a part of my signature line. While I AM authorized to post on Piano World officially for PB and Larry, in those rare posts I always state that I am posting for them.

Second, you are mistaken in your interpretation of my comment that used Steinway sales benefit all parties "except Steinway". Many used Steinway sales are made to shoppers who otherwise would buy a new Steinway. In fact, I think most Steinway dealers (and likely the company itself) would agree that Steinway's biggest competition is the used/rebuilt Steinway market.

I have a great deal of respect for Steinway even though I have serious reservations about the "All Steinway School" designation being used by schools that have significant numbers of Boston and Essex pianos.
_________________________
Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

Jasons Music
Maryland/DC/No. VA
Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2158517 - 09/27/13 10:11 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Steve,

I may have misinterpreted your use of "except Steinway!" I was pointing out how it can also be misinterpreted by others and especially newcomers.

You do display your association with PB and it is quite prominent. Your disclaimer covers you and your clients, and you are not a client of PB, you are an employee or affiliate. The lack of PB in your disclaimer of opinion makes the inference that you are always speaking on behalf of PB, as opposed to your other professional entities with which you are affiliated.

You maintain that your statements are clear and well defined. I am merely pointing out to you, and other readers of your posts, that what you are stating carries a totally different weight because of your affiliation. Often it becomes unclear of the viewpoint from which you speak.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2158524 - 09/27/13 10:22 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Marty, Steve

Assuming you would like Steinway to prosper and succeed in the next decade and into the future, what advice would you give Mr Paulson were he to ask?
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2158529 - 09/27/13 10:31 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
pianoloverus Offline
Yikes! 10000 Post Club Member

Registered: 05/29/01
Posts: 19640
Loc: New York City
Originally Posted By: Minnesota Marty
You do display your association with PB and it is quite prominent. Your disclaimer covers you and your clients, and you are not a client of PB, you are an employee or affiliate. The lack of PB in your disclaimer of opinion makes the inference that you are always speaking on behalf of PB, as opposed to your other professional entities with which you are affiliated.

Here is the first Google definition of client: "A person or organization using the services of a lawyer or other professional person or company." This would seem to indicate PB is one of Steve's clients. I think it's clear to almost everyone except you that Steve's posts are his own ideas and not those of PB or any other of his clients. I think his signature explains everything very clearly.


Edited by pianoloverus (09/27/13 10:41 AM)

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#2158539 - 09/27/13 10:59 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Hi Ian,

I would suggest to Mr. Paulson to stress manufacturing consistency and insure that all pianos are produced to fall within very narrow mechanical tolerances. Even through the use of "hand built" there is a wide range from sloppy to immaculate. Steinway needs to always be as close to perfection as is possible in its craftsmanship.

Craftsmanship leads to artistry. Steinway does this very well. The "Steinway Sound" needs to be retained and promoted. It is the sound of the Steinway which is the biggest selling point, as long as manufacturing standards are at the very highest level.

I believe that best thing that Mr. Paulson can do is to listen to his builders and staff, of all instrument lines, to put quality and excellence first. He knows how to develop and grow the SMI companies from a marketing standpoint, and he has the resources to accomplish his goals. He should not, however, meddle with the concept of what makes a Steinway a Steinway. He should insist that all products under his purview be of the highest quality in any given price range.

I have had the chance to play several new S&S-O and put them through their paces. They were exceptional instruments and at least from my inspection, they were as carefully built, fit and finish, as any on the market. The tonal structure of these instruments was exceptional. Each with their own voice, yet all sounding like a Steinway.

Something that I would personally like to see would be the re-introduction of the 'C' built in Astoria. To my ear, it has the tonal structure and personality of the 'D,' but does not have the sheer power needed for concerto performance. For the serious pianist, it is a remarkable instrument and is very different than the 'B.' From what I have been told, the action geometry is identical to the 'D' and I sense that from my own experience.

There is a marked tonal difference between Hamburg and Astoria. That difference should be maintained but the NY versions need to be at the same level, with regard to fit and finish, as their German cousins. From what I have played recently, they are well on their way.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2158545 - 09/27/13 11:17 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
PLU,

"Using the services of" indicates the engagement of an independent contractor. I certainly don't know Mr. Cohen's contractual agreement with Mr. Fine, but by all appearances he is not an independent contractor, but rather a full time employee and representative.

He would be in the position, I surmise, to select and engage an independent contractor to submit and article to the publication. This is not at all uncommon at PW, however those authors are independent contractors and their work product is not categorized as employment. They act as consultants to the publication.

Mr. Cohen is not a "client of" PW, he is "part of" PW. This is exactly the ambiguity contained within his disclaimer.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2158550 - 09/27/13 11:27 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
terminaldegree Offline
2000 Post Club Member

Registered: 05/03/06
Posts: 2818
Loc: western Wisconsin
I concur with much of the above - I celebrate the fact the NY and Hamburg instruments have different tonal qualities, and I hope it stays this way for the benefit of choice for players around the world.

I also share Mary's sentiments regarding wanting to see consistently great instruments out of the NY factory, every time.

One brainstorm (if any of the Steinway "brass" were reading this) that might be interesting to ponder: if Steinway NY is able to finish a piano as well as the Hamburg one, why not offer the customer a choice of "European voicing" with whatever materials are different in the Hamburg pianos and "American voicing" with the stuff that already goes in the NY piano? Both could be offered at the same price (it would be built in NY), eliminating the arbitrary Hamburg "tax" you have to pay to buy a new German Steinway in the US.

To some extent, I know this already occurs with rebuilders, but why not for new production at the factory?
_________________________
Pianist, teacher, internet addict.
Piano Review Editor - Acoustic and Digital Piano Buyer
Casio px-200, Bechstein A190 #192939 @ home
Steinway A #585209, B #416809 @ work
Schimmel 130T #339100, on loan

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#2158555 - 09/27/13 11:30 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Marty

Thank you for an excellent response.

I was not going to comment because I have said enough already, but you mention the C.

There must surely be a golden opportunity to introduce a superlative new version of that model.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2158557 - 09/27/13 11:32 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
pianoloverus Offline
Yikes! 10000 Post Club Member

Registered: 05/29/01
Posts: 19640
Loc: New York City
Originally Posted By: Minnesota Marty
PLU,

"Using the services of" indicates the engagement of an independent contractor. I certainly don't know Mr. Cohen's contractual agreement with Mr. Fine, but by all appearances he is not an independent contractor, but rather a full time employee and representative.

He would be in the position, I surmise, to select and engage an independent contractor to submit and article to the publication. This is not at all uncommon at PW, however those authors are independent contractors and their work product is not categorized as employment. They act as consultants to the publication.

Mr. Cohen is not a "client of" PW, he is "part of" PW. This is exactly the ambiguity contained within his disclaimer.
I'm not at all sure your idea of the meaning of client is correct. It's definitely not how I'd interpret it. But even if your take is correct, I doubt anyone other than a lawyer or a pedant gave this distinction a second's thought or found Steve's disclaimer ambiguous. His signature has been the same for more than a year and no one said a word about it before this thread.

If you are really trying to offer him advice rather than just criticize(as it appears in this thread where you began by misinterpreting his post), you should do this in a PM.


Edited by pianoloverus (09/27/13 11:37 AM)

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#2158571 - 09/27/13 12:12 PM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
sophial Offline
3000 Post Club Member

Registered: 04/11/05
Posts: 3489
Loc: US
Originally Posted By: Minnesota Marty
Hi Ian,

I would suggest to Mr. Paulson to stress manufacturing consistency and insure that all pianos are produced to fall within very narrow mechanical tolerances. Even through the use of "hand built" there is a wide range from sloppy to immaculate. Steinway needs to always be as close to perfection as is possible in its craftsmanship.

Craftsmanship leads to artistry. Steinway does this very well. The "Steinway Sound" needs to be retained and promoted. It is the sound of the Steinway which is the biggest selling point, as long as manufacturing standards are at the very highest level.

I believe that best thing that Mr. Paulson can do is to listen to his builders and staff, of all instrument lines, to put quality and excellence first. He knows how to develop and grow the SMI companies from a marketing standpoint, and he has the resources to accomplish his goals. He should not, however, meddle with the concept of what makes a Steinway a Steinway. He should insist that all products under his purview be of the highest quality in any given price range.

I have had the chance to play several new S&S-O and put them through their paces. They were exceptional instruments and at least from my inspection, they were as carefully built, fit and finish, as any on the market. The tonal structure of these instruments was exceptional. Each with their own voice, yet all sounding like a Steinway.

Something that I would personally like to see would be the re-introduction of the 'C' built in Astoria. To my ear, it has the tonal structure and personality of the 'D,' but does not have the sheer power needed for concerto performance. For the serious pianist, it is a remarkable instrument and is very different than the 'B.' From what I have been told, the action geometry is identical to the 'D' and I sense that from my own experience.

There is a marked tonal difference between Hamburg and Astoria. That difference should be maintained but the NY versions need to be at the same level, with regard to fit and finish, as their German cousins. From what I have played recently, they are well on their way.


Great response, Marty. I would add to this consistent preparation at the factory rather than at the dealer level to ensure that the instruments are presented as far as is possible at their best to the consumer.

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#2158587 - 09/27/13 12:48 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
sophial - I completely agree.

Mr. Paulson - Take Note!
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2158611 - 09/27/13 02:07 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Rank Piano Amateur Offline
1000 Post Club Member

Registered: 08/11/07
Posts: 1793
I would like to add to the advice that Mr. Paulson exercise some oversight of Steinway dealer tactics. We have seen plenty of evidence here both in individual stories (admittedly anecdotal) and on dealer websites that are linked here that such oversight might be a good idea.

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#2158633 - 09/27/13 02:54 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
SBP Offline
Full Member

Registered: 09/12/12
Posts: 258
I'd suggest getting rid of that investment stuff-anyone who knows just a little bit about the piano market (or the economy in general) knows it's all baloney :P
_________________________
2012 Kawai K3

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#2158674 - 09/27/13 04:20 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Steve Cohen Offline
Yikes! 10000 Post Club Member

Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Marty.

I am not, nor have I ever been an employee of PB.

Larry was a consulting client. Part of my tasks was contributing and editing the recurring articles in PB.

Currently I do so few hours work for Larry that most of it is done "pro bono".
_________________________
Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

Jasons Music
Maryland/DC/No. VA
Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2160204 - 09/30/13 07:15 PM Re: New Owner of Steinway, John Paulson [Re: Rich Galassini]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Originally Posted By: Rich Galassini
Originally Posted By: phacke

Greetings, Mr. Greg.

As for soundboard, how about loosening the string in storage to remove load on the board?


This is not really possible with a compression crowned board. The load is part of what keeps it intact in the first place.



Hello, I thought some more about this and I cannot figure out why this is not possible, especially if the piano is maintained under relatively dry conditions. At around 10°C and 20% RH, moisture content of spruce is about 6%, which is pretty close to the conditions at which the soundboard was attached to the ribs, thus built-in stress driving creep is significantly relieved. With strings loosened too, what stress remains that does damage?

Thanks-


Edited by phacke (09/30/13 07:19 PM)
_________________________
phacke

Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2161287 - 10/03/13 04:33 PM Re: New Owner of Steinway, John Paulson [Re: phacke]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Hi P,

Well...

1- wood responds inconsistently to environmental changes. You can't make any general predictions about how a particular piece of wood, or wooden construction, will react over time. Some will do very well. Others won't last at all.

2- As Rich points out, the down-bearing is an essential feature of the construction and is necessary to maintain its integrity.

3- wood does not live forever. Heck, even wooden furniture will wear out over time just because of changes in temperature and humidity! It doesn't require bugs or tension to have it fall apart on you.

4- if wood doesn't live forever, felt lives even a shorter lifespan. So you can count on replacing all the felt parts before you replace the wooden ones, at the least. And that's a lot of felt. How well would your Steinway play, I wonder, if all the felt parts were missing? Not well!
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2161318 - 10/03/13 05:22 PM Re: New Owner of Steinway, John Paulson [Re: phacke]
BDB Online   content
Yikes! 10000 Post Club Member

Registered: 06/07/03
Posts: 21904
Loc: Oakland
Originally Posted By: phacke
Originally Posted By: Rich Galassini
Originally Posted By: phacke

Greetings, Mr. Greg.

As for soundboard, how about loosening the string in storage to remove load on the board?


This is not really possible with a compression crowned board. The load is part of what keeps it intact in the first place.



Hello, I thought some more about this and I cannot figure out why this is not possible, especially if the piano is maintained under relatively dry conditions. At around 10°C and 20% RH, moisture content of spruce is about 6%, which is pretty close to the conditions at which the soundboard was attached to the ribs, thus built-in stress driving creep is significantly relieved. With strings loosened too, what stress remains that does damage?

Thanks-


I believe that the spruce should be attached to the ribs at about 4% moisture content. The reason for this is that they should be attached at the lowest moisture content that the piano will be expected to encounter under normal circumstances, because if it gets lower, the wood will contract, and since it is fastened to the ribs, which do not contract at the same rate, it will be under tension which can cause it to crack.

I believe that removing tension will allow wood to regain its original shape. It takes longer than some other materials do, however. When we remove the old strings from pianos, they immediately assume the curve that came from the wire originally being spooled, despite the years that they may have spent under tension. Hubbard, in his book about harpsichords, wrote about removing the bentside from an old Italian harpsichord, and in a few days, it was almost flat again. But it was not immediate.
_________________________
Semipro Tech

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#2161323 - 10/03/13 05:29 PM Re: New Owner of Steinway, John Paulson [Re: Steve Cohen]
TGG Offline
Full Member

Registered: 05/20/04
Posts: 81
Loc: Houston
Steve,

This thread took some weird twists-discussions of architecture, investment value of fine pianos and you. I find your industry insight invaluable and usually just grit my teeth when folks criticize you as a Steinway hater.

Here, you've tried too hard to give Paulson the benefit of the doubt. He's a scumbag. During the mortgage meltdown, he and his company assembled a package of mortgage backed securities calculated to fall in value, the package was marketed by Goldman Sachs as a sure winner and a safe investment, and Paulson made more than a billion dollars by shorting the investment (betting against it going up in value). Here is a link to an archived LA Times article.

http://articles.latimes.com/2010/apr/17/business/la-fi-goldman-paulson17-2010apr17

Goldman Sachs paid a huge penalty in the SEC's criminal prosecution relating to this episode. Paulson's company has never been penalized, and he likes to point out that, hey, he didn't market the crappy paper...he just helped pick it out with the intent that it should go down in value.

If I worked at Steinway, I'd be getting my resume together. It'll be sold or moved to China within four years.

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#2161473 - 10/03/13 10:54 PM Re: New Owner of Steinway, John Paulson [Re: TGG]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Originally Posted By: TGG
Steve,

This thread took some weird twists-discussions of architecture, investment value of fine pianos and you. I find your industry insight invaluable and usually just grit my teeth when folks criticize you as a Steinway hater.

Here, you've tried too hard to give Paulson the benefit of the doubt. He's a scumbag. ...Goldman Sachs paid a huge penalty in the SEC's criminal prosecution relating to this episode. Paulson's company has never been penalized, and he likes to point out that, hey, he didn't market the crappy paper...he just helped pick it out with the intent that it should go down in value.

If I worked at Steinway, I'd be getting my resume together. It'll be sold or moved to China within four years.


...update: I've almost got all the sackcloth together. The mourners are schedule for Saturday night, as soon as the dirge starts playing...
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2161493 - 10/04/13 12:27 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Gary Fowler Offline
Full Member

Registered: 05/27/13
Posts: 375
Ain't NO ONE going to tell John Paulson how to do his job. It's his baby, and he can do whatever he likes
_________________________
Making the world a better sounding place, one piano at a time...

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#2163269 - 10/08/13 03:54 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dara Online   blank
1000 Post Club Member

Registered: 06/18/09
Posts: 1046
Loc: west coast island, canada
"At the center of the transactions described in the government's fraud case against Goldman, Sachs & Co. is New York hedge fund operator John Paulson, whose firm made $15 billion in 2007 by betting that Americans would default on their home loans in droves."
L.A.Times

John Paulson and others that may benefit from this Steinway transaction.... carry on grabbing at money and self deluded prestige .... while pretending that they're contributing to culture.

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#2163320 - 10/08/13 08:10 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Roger Ransom Offline
1000 Post Club Member

Registered: 01/19/05
Posts: 1287
Loc: SouthWest Michigan
I've worked for several companies who got bought out and the new owners ALWAYS carry on about how nothing will change except for the better and that we should all be very happy and secure.

Then, after a short period of time, the true motives start to come out and they are nearly always to the great detriment of the company and the employees with the new owners cashing in.

We'll see, it will be interesting to watch. I hope this one is different. The guy seems a little too slick for my taste.
_________________________
Laugh More
Yamaha G7 - Roland FP7

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#2163326 - 10/08/13 08:23 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
I just wish that he would learn to pronounce the word "epitome" if he is going to us it as a descriptive for S&S.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2163362 - 10/08/13 09:55 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
Roger Ransom Offline
1000 Post Club Member

Registered: 01/19/05
Posts: 1287
Loc: SouthWest Michigan
Originally Posted By: Minnesota Marty
I just wish that he would learn to pronounce the word "epitome" if he is going to us it as a descriptive for S&S.


I expect this is an indication that he was trying to read something that someone else wrote.
_________________________
Laugh More
Yamaha G7 - Roland FP7

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#2163383 - 10/08/13 10:42 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Thrill Science Offline
500 Post Club Member

Registered: 09/04/11
Posts: 540
Loc: California
I highly recommend Zuckerman's book about Paulson:

http://www.amazon.com/Greatest-Trade-Ever-Behind-Scenes/dp/0385529945

It explains all about Credit Default Swaps, which are a fairly complicated thing, and how Paulson was one of the few people who figured out how to profit from the inevitable crash.

Steinway needs a complete overhaul, and I hope Paulson does it.
_________________________
Robert Swirsky
Thrill Science, Inc.

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#2163446 - 10/08/13 12:30 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
bkw58 Offline

Silver Supporter until December 19, 2014


Registered: 03/14/09
Posts: 1843
Loc: Conway, AR USA
Typically, all is fine until stockholders tire of bleeding red ink. Then everything can change. Time will answer.
_________________________
Bob W.
Retired piano technician
www.pianotechno.blogspot.com

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#2163492 - 10/08/13 02:15 PM Re: New Owner of Steinway, John Paulson [Re: Dara]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Originally Posted By: Dara
"At the center of the transactions described in the government's fraud case against Goldman, Sachs & Co. is New York hedge fund operator John Paulson, whose firm made $15 billion in 2007 by betting that Americans would default on their home loans in droves."
L.A.Times

John Paulson and others that may benefit from this Steinway transaction.... carry on grabbing at money and self deluded prestige .... while pretending that they're contributing to culture.


+1!!!
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2163525 - 10/08/13 03:47 PM Re: New Owner of Steinway, John Paulson [Re: laguna_greg]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
Originally Posted By: Dara
"At the center of the transactions described in the government's fraud case against Goldman, Sachs & Co. is New York hedge fund operator John Paulson, whose firm made $15 billion in 2007 by betting that Americans would default on their home loans in droves."
L.A.Times

John Paulson and others that may benefit from this Steinway transaction.... carry on grabbing at money and self deluded prestige .... while pretending that they're contributing to culture.


Being responsible for these actions I could only classify him, pardon my French, as scumbag.

Pure evil. (I suppose most of you would when you understood half of what he did and the impact it had).


Edited by wimpiano (10/08/13 03:58 PM)
_________________________
Schimmel 116 S ...

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#2163533 - 10/08/13 04:30 PM Re: New Owner of Steinway, John Paulson [Re: wimpiano]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
Originally Posted By: wimpiano
I suppose most of you would when you understood half of what he did and the impact it had.

Please explain.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2163541 - 10/08/13 04:47 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
Without getting in too much detail this is the exact cause of the ongoing financial crisis: Leveraged bets.
Primary impact was on homeowners and institutional investors such as Pension Funds (and their clients), secondary impact on banks, and so on. Quite some construction workers were put out of business (and are still going out of business right now) all due to gambling of greedy people..

Of course all of it is not to blame on him personally but it is on this style of making money.
_________________________
Schimmel 116 S ...

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#2163554 - 10/08/13 05:19 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Withindale Offline
2000 Post Club Member

Registered: 02/09/11
Posts: 2089
Loc: Suffolk, England
The financial merry go round was out of control, I agree, and many, many people were only too happy to take advantage of the credit available, including governments. Bubbles.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

Top
#2163573 - 10/08/13 06:00 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
The one thing that we don't know is Paulson's expected return and across what period of time. For Paulson, and his firm, the cost of purchase was so insignificant it may be nothing more than a prestige item where deficits are of no concern.
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2163585 - 10/08/13 06:21 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
My own opinion is that Paulson's hedge fund didn't do anything fundamentally wrong.

Don't confuse what Paulson did vs. what companies like Goldman & ACA allegedly did.

Imagine a piano broker (Goldman), working on a deal involving one party (Paulson) to sell the piano to another party (ABN Amro). In the middle there's a piano tech / appraiser (ACA) who was to help select & appraise the piano to sell.

Everyone wants the best deal. So Paulson wants to sell the cheapest piano for the highest price. ABN AMRO wants to buy the best piano possible for the least price. Goldman and ACA are to get transaction fees for brokering the fees & appraising the piano, respectively. (**)

In this case, Goldman allegedly lied to ABN AMRO about the state of the piano, and that they allowed Paulson to select the piano in question. And to make the matters worse, the appraiser ACA turned out to be incompetent.

ABN Amro bought a junk piano and lost a ton of money when the piano market collapsed. But that wasn't Paulson's fault. First, it's caveat emptor, ABN Amro didn't do their homework (they should've read Larry Fine's guide). Second, Paulson made no representations about the state of the piano, Goldman did. Third, it was ACA that did the incompetent appraisal, not Paulson.

(**) Note: obviously I'm simplifying a bit as the deal involved derivatives of an instrument, not an actual instrument like a Piano.
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#2163731 - 10/09/13 12:34 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Thrill Science Offline
500 Post Club Member

Registered: 09/04/11
Posts: 540
Loc: California
Paulson did NOTHING wrong with the credit default swaps. Nothing.

Quote:

Primary impact was on homeowners


No "homeowners" were harmed. Quite a few debtors and deadbeats, with no equity (so they can't be called "homeowners") may have had to move out of the homes they couldn't afford. And yes, some greedy pension funds that bought very risky investments that were backed by houseflipper's mortgages may have lost money, but that's not Paulson's doing.
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#2163740 - 10/09/13 01:21 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
Originally Posted By: Piano*Dad
Originally Posted By: michaelh
OK, nevermind. I guess I'll just buy a mutual fund at T.Rowe Price.


Wise choice. grin

This discussion of what set of wacky notions might allow us to generate a "Steinway Platinum Fund" of warehoused instruments is theater of the absurd.



This made me think of this thread:

Vintage car mecca draws car enthusiasts from all over to Pierce, Neb., auction,
http://www.omaha.com/article/20130927/NEWS/130928900

and

http://www.usatoday.com/story/driveon/2013/09/30/lambrecht-chevrolet-auction-nebraska/2894401/

Even warehoused under inappropriate conditions, cars seem to have sold well.

All the best -


Edited by phacke (10/09/13 01:31 AM)
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Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2163764 - 10/09/13 03:22 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
@peekay & Thrill Science
That would be a bit naive isn't it?

In the first place the securities selection was done by Paulson (several sources confirm this). The instruction for the whole deal was also by Paulson.

Saying that that is not a bad thing is like saying "growing hard drugs is not wrong as long as you don't tell that hard drugs are good for you".

So first he made money on the securitizing of worthless stuff (though maybe not directly but as an architect) and second made a lot of money on the loss by doing a leveraged bet. There was far more "insurance" then there were securities..

Ultimately translated to pianos:

Paulson suggested to GS to sell termite infested Steinways. Paulson created the opportunity to tell ABN AMRO that they were Steinways (And at the time PianoForum wouldn't have been able to tell that there were termite infested Steinways).
At last Paulson betted against the Piano's he selected himself. And not just for the amount that his selection of piano's sold but a far greater amount inflicting SURE damage on the insurer.

When you say it doesn't hit homeowners then they who deserved it:
I agree it did hit them in the first place however, secondary impact was on a lot of people which lost their jobs, no longer being able to pay their mortgage (which they were able to earlier), not being able to sell their houses (no market) and so on.

So maybe legally he is not guilty (because no accurate law was in place, doing what he did is illegal right now). But morally it is below all standards.





Edited by wimpiano (10/09/13 03:25 AM)
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#2163871 - 10/09/13 10:38 AM Re: New Owner of Steinway, John Paulson [Re: wimpiano]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Originally Posted By: wimpiano
@peekay & Thrill Science
That would be a bit naive isn't it?

In the first place the securities selection was done by Paulson (several sources confirm this). The instruction for the whole deal was also by Paulson.

Saying that that is not a bad thing is like saying "growing hard drugs is not wrong as long as you don't tell that hard drugs are good for you".

So first he made money on the securitizing of worthless stuff (though maybe not directly but as an architect) and second made a lot of money on the loss by doing a leveraged bet. There was far more "insurance" then there were securities..

Ultimately translated to pianos:

Paulson suggested to GS to sell termite infested Steinways. Paulson created the opportunity to tell ABN AMRO that they were Steinways (And at the time PianoForum wouldn't have been able to tell that there were termite infested Steinways).
At last Paulson betted against the Piano's he selected himself. And not just for the amount that his selection of piano's sold but a far greater amount inflicting SURE damage on the insurer.

When you say it doesn't hit homeowners then they who deserved it:
I agree it did hit them in the first place however, secondary impact was on a lot of people which lost their jobs, no longer being able to pay their mortgage (which they were able to earlier), not being able to sell their houses (no market) and so on.

So maybe legally he is not guilty (because no accurate law was in place, doing what he did is illegal right now). But morally it is below all standards.



+1
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#2163936 - 10/09/13 12:59 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
kalee21 Offline
Full Member

Registered: 09/08/13
Posts: 82
Loc: London
Steinways with termites! EEEEEW.
Does that make it a Steinway model T. Would a concert grand so infested become a Steinway T D (STD)? I am sure Mr. Paulson has several STD's. I believe he said you cannot have enough of them?.

Probably only available from NY. Perhaps Hamburg will also feature instruments with Reticulitermes flavipes, which does not migrate further north in the European continent than there and has been found in that city (through migration, not native).

I did quite a while ago view an interesting TV documentary about the NY Steinway rebuilding facility. The manager there stated that one piano was brought in termite infected and immediately ordered off the lot, "The last thing you want in a piano factory is . . .".


Edited by kalee21 (10/09/13 01:21 PM)

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#2163942 - 10/09/13 01:14 PM Re: New Owner of Steinway, John Paulson [Re: kalee21]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
Kalle,

Can I get that on a t-shirt?
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Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2164002 - 10/09/13 04:12 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
phacke Online   content

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 589
Loc: CO, USA
I wrote a a briefer message bringing up the creation and then shorting of the mortgage backed securities item like Wimpiano above about 1 month ago, but edited out the content. I thought piano and music in general brings together the left and the right, and all the various people, what have you. It seems to me there is some element of passion, a passion we all share, that brought Mr. Paulson to Steinway considering the higher than market price paid and the message of his video. I wish him the best in his stewardship of Steinway, the important instrument maker and music supporter that it is. I hope he continues to have that passion throughout his life. If I lived in NYC, the Hamptons, or Aspen, I would invite him to my PW piano parties as someone who shares the passion; if you live in any of these places, think about it!

best wishes-


Edited by phacke (10/09/13 04:12 PM)
_________________________
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Steinway YM (1933)
...Working on:
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin
F. Chopin, Prelude 28 (15)

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#2164150 - 10/09/13 09:12 PM Re: New Owner of Steinway, John Paulson [Re: wimpiano]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
Originally Posted By: wimpiano

So first he made money on the securitizing of worthless stuff (though maybe not directly but as an architect) and second made a lot of money on the loss by doing a leveraged bet. There was far more "insurance" then there were securities..

Ultimately translated to pianos:

Paulson suggested to GS to sell termite infested Steinways. Paulson created the opportunity to tell ABN AMRO that they were Steinways (And at the time PianoForum wouldn't have been able to tell that there were termite infested Steinways).
At last Paulson betted against the Piano's he selected himself. And not just for the amount that his selection of piano's sold but a far greater amount inflicting SURE damage on the insurer.

Except that's NOT AT ALL what happened. And by your description about "more insurance then there were securities" and about Paulson "inflicting SURE damage on the insurer" suggest that you do not have knowledge about how the particular derivative instrument works.

In the ABACUS transaction, the instrument is a Synthetic CDO. A Synthetic CDO is composed of a series of Credit Default Swaps. ALL of the swaps Paulson selected were considered investment grade (rated BBB or higher by both S&P and Moody's). ALL of the swaps were also considered investment grade by the appraiser ACA.

That is, ACA looked at all the securities Paulson wanted in the CDO and compared them to ACA's own (pre-existing) internal list of securities they had independently considered investment grade. They also suggested adding several other securities to the CDO to which Paulson declined. ACA agreed to proceed with securities they both had in common.

Paulson didn't "inflict SURE damage" on ABN AMRO. They were counterparties on a complex derivative trade. ABN AMRO knew EXACTLY which swaps were in the Synthetic CDO.

No one can predict when the market is going to crash. ABN AMRO (and a second investor) believed in the everlasting bubble and bet on a long position. Paulson believed that BBB mortgage backed securities were overrated and took the short position. And he was right!

ABN AMRO was a Top 10 bank in Europe and should have known what they were doing. If ABN couldn't afford to cover the swaps they should not have entered into the trade. If ABN didn't have the sophistication to assess complex derivatives, they shouldn't have entered into the trade. But they were too greedy to care. They didn't perform their due diligence, they didn't correctly manage their risk, they lost almost $1 billion, and at the end it's their own fault!

Goldman, is another matter. They allegedly lied to ACA and misled the investors. Paulson did not.

Due to civil litigation by the SEC against Goldman, all of this is in the public record.
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#2164233 - 10/10/13 01:27 AM Re: New Owner of Steinway, John Paulson [Re: peekay]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1382
Loc: guess where in CA and WA
PK,

That is so self-serving, and an incredibly shallow assessment of those events. Your agenda is clear, and easily dismissed.

That fact is that many people, myself included, could see that a serious correction was coming on the horizon by August of 06, not only in the housing industry but also in derivative instruments held by sovereign entities, which is where we have all the serious problems that continue to plague us. You could have seen it yourself if you had had half an eye open to the inobvious factors. And after posting that little rant, you better not say that you DID see the crash about to happen when you just wrote that nobody could have seen it.

Are you really going to try to say that Paulson, or any of the key players who sold these instruments, also did not know this? (read: moron(s))

Paulson in his litle video PR release sounds just like the Mondavi family trying the establish the primacy of "wine culture" in order to sell more wine, when in fact such thing has never existed anywhere socioculturally. It's just so much marketing hype. Nothing more.

I remain totally unconvinced.

I believe we were talking about the sale of Steinway to a cheap Carpet Bagger from the North, yes? Stop apologizing for the motives and actions of Rightists who all think Art is a commodity to be brokered. S&S is nothing more than a charm to be added to a bracelet Paulson sometimes wears at parties, and sold the moment it becomes bothersome. That mercantilist view is disgusting to any true artist, and is certain to bring about the death of any real artistic inspiration. It simply cannot end well for the pianos produced.

There. I said it. You all heard me.


Edited by laguna_greg (10/10/13 01:38 AM)
Edit Reason: clarity
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1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2164268 - 10/10/13 02:46 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
That you (and everyone else) could see a correction on the horizon in August of '06 is completely irrelevant. No one could predict with certainty when exactly any part of the market is going to crash.

ABACUS CDO did not crash until around October 2007, more than a year later. One year is an ETERNITY in terms of the securities market. In a matter of days a CDO could have been sold and bought and resold multiple times in the secondary market.

I believe the ABACUS deal closed in April. ABN AMRO could have done a stop-loss and dumped the CDO any day in May, in June, in July, in August or in September if they thought they got a raw deal. But they didn't. Are you going to blame Paulson for that?

Did you know that other traders within ABN AMRO bought Credit Default Swaps on their own against the ACA exposure? That's right, even ABN AMRO traders were taking the SAME short position as Paulson, betting against their own company!!! Are you going to blame Paulson for that too?
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#2164277 - 10/10/13 03:27 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
So you are saying that selecting toxic securities and selling them knowingly (they knew that ACA gave them the high rating and didn't correct them) is a good thing?

I do agree that all participants in the deal were primarily driven by greed. The difference however is that it was a trap, well known (as an exact science) by Paulson, and he was the architect to the trap.

He didn't execute it that's why he's not convicted, he had it executed for him by Fab Fab.. (which is imho even worse).
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#2164295 - 10/10/13 05:28 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
Look, if I think the market is going to crash, I might call my broker to give me a basket (list) of investment grade stocks to short.

Some of the stocks in that basket might be "too good" in my opinion. Sure they are all rated BBB or above, but I might ask the broker to remove them. After all, I will only make money if the aggregate value of the entire basket goes down.

Do I believe the stocks will tank? OF COURSE. That's the whole point of making a short position! Is there anything wrong with this? NO.

Am I setting a "trap"? NO. In ANY trade, one party thinks the security will go up, while the other thinks it will go down. We are both making our best guesses!! My guess is, based on all I know, the stocks will tank. Whoever I trade with really believes the stocks will go up. That's how any trade works.

Suppose the stocks are not sold on exchanges (they are "over-the-counter" stocks). I might ask the broker to find someone (a counterparty) willing to take the long position for the trade. Is there anything wrong with this? NO.

In this case, a certain Mr. Amro, looks at the same basket of stocks, and thinks that the value will go UP. He runs a business with a sophisticated bunch of traders, and he thinks I'm crazy for shorting the stocks at this time. So Mr. Amro becomes my counterparty to the trade. Nothing wrong with this!

For his work, I might pay the broker a fee for of putting together the basket, and finding the counterparty. And the broker gets a cut from the transaction too. So far, no one did anything wrong!!

The problem occurs when the broker (NOT ME) hides the fact that I helped chose the basket of stocks.

Actually, this information shouldn't even matter! Whether or not I helped select the securities has no bearing on the actual worth of those securities. After all, I could be wrong!

You see, Mr. Amro is no dummy. He has a ton of current and historical market data at his fingertips. He has an entire department full of credit derivatives traders. He has a slew of mathematical wizards called quants at his disposal. He has another entire department of Risk Management specialists, running various "value at risk" simulations. He even has a special Senior Committee that evaluates and approves these kinds of trades on a daily basis!! And they all look at the basket of stocks and think I'm crazy for taking the short position!

So after all that, Mr. Amro agrees to be counterparty to the trade. Is it my duty to tell them that I think the securities will tank? NO! It should be obvious to Mr. Amro that I think the securities will tank, that's the whole reason I'm taking the opposite (short) position than him! A counterparty to any trade, whether it's stocks or Synthetic CDOs or Steinway Pianos, has the opposite interest than the other counterparty.

We sign the contract and six months later, the market collapses. Well, that is too bad for Mr. Amro, but I've done nothing wrong!

Mr. Amro should sack his traders. The head of his Risk Management department should be fired. He should be asking hard questions to his own Special Committee which approved the trade. He should look in the mirror and ask why some of his own traders bet against his own position!!

Listen. When the market crashed, people blamed those holding short positions, like Mr. Paulson, because they made money. But really, it was those holding the long positions, like ABN AMRO, who were enabling, perpetuating and supporting the housing market bubble on the backs of homeowners.

ABN AMRO likes to play victim, but they created their own mess. Do you know how much ABN AMRO stood to gain if the market didn't crash? A measly $7 million. For their own greed and incompetence, they lost a billion. You can't blame Paulson for that.
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#2164306 - 10/10/13 06:42 AM Re: New Owner of Steinway, John Paulson [Re: peekay]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
Originally Posted By: peekay

Suppose the stocks are not sold on exchanges (they are "over-the-counter" stocks). I might ask the broker to find someone (a counterparty) willing to take the long position for the trade. Is there anything wrong with this? NO.

I don't think short selling in general is bad, so, I agree.

However:
Originally Posted By: peekay
After all, I will only make money if the aggregate value of the entire basket goes down.

In this particular case, the securities (actually mortgages behind a couple of blinds and curtains) selected by Mr Paulson, were without any exception junk. It was a miracle that the default didn't come earlier. That it took so long was just because the chain was so long.

To demonstrate:
Quote:
The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006, with much higher ratios in some parts of the U.S

He knew that, and the entire package was subprime..

Originally Posted By: peekay
The problem occurs when the broker (NOT ME) hides the fact that I helped chose the basket of stocks.
I suppose everybody agrees that it is quite hard to understand that Mr. Tourre didn't seem to understand at the time that what goes around comes around..

Originally Posted By: peekay
You see, Mr. Amro is no dummy. ......
For their own greed and incompetence, they lost a billion.

I also agree on that, and they payed for it.

Originally Posted By: peekay
You can't blame Paulson for that.


That's were we differ. I think that he was the architect of it all and in this case and it was not about unpredictible market movement.

Everybody with common sense knew it. (When I bought a house in 2007 I had to tell the mortgage salesman that nobody with any common sense would buy a couple of products he was offering, he is now bankrupt).

The market just ignored (since it went well for a long time) it because they were all greedy. Paulson did exploit that on a very large scale.

So imho Paulson was to blame, like Tourre, and also like ABN. It is just that nobody has the balls to prosecute them.

ABN did cost me as a taxpayer in the Netherlands quite a lot.. I have no reason to defend them wink



Edited by wimpiano (10/10/13 06:47 AM)
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#2164338 - 10/10/13 09:10 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Steve Cohen Offline
Yikes! 10000 Post Club Member

Registered: 05/26/01
Posts: 10527
Loc: Maryland/DC/No. VA
Perhaps the real issue can be simplified:

What are the upsides of Paulson's ownership of Steinway?
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#2164351 - 10/10/13 09:38 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
kalee21 Offline
Full Member

Registered: 09/08/13
Posts: 82
Loc: London
Mr. Paulson is financially secure. He can treat Steinway as a project for improvement and preservation, not immediate profit.
Mr. Paulson and his senior Steinway management could consult at length with the concert artist community regarding the state of the instruments so essential to piano music. This should be easy enough to arrange. Are these instruments, with the model D in particular, absolutely perfect for the concert artists as is, or can areas for improvement be identified. Address this as a serious matter and put in the effort required to arrive at the correct results. Depending on what is found, ensure the concert grands (and hopefully the other piano's also) remain the best of what a piano can be, fully meeting the needs of the artist. Keep the instruments themselves as the focal point of importance, not profit or marketing hype. Give proper credence to the recent developments by other eminent piano builders. Put money into Steinway to fund such developments that may be required!

The success of Steinway ultimately derives from the success of the instrument with the top artists of the classical piano world. Domestic sales derive from this platform.

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#2164378 - 10/10/13 10:53 AM Re: New Owner of Steinway, John Paulson [Re: kalee21]
bkw58 Offline

Silver Supporter until December 19, 2014


Registered: 03/14/09
Posts: 1843
Loc: Conway, AR USA
Originally Posted By: kalee21
Mr. Paulson is financially secure. He can treat Steinway as a project for improvement and preservation, not immediate profit.
Mr. Paulson and his senior Steinway management could consult at length with the concert artist community regarding the state of the instruments so essential to piano music. This should be easy enough to arrange. Are these instruments, with the model D in particular, absolutely perfect for the concert artists as is, or can areas for improvement be identified. Address this as a serious matter and put in the effort required to arrive at the correct results. Depending on what is found, ensure the concert grands (and hopefully the other piano's also) remain the best of what a piano can be, fully meeting the needs of the artist. Keep the instruments themselves as the focal point of importance, not profit or marketing hype. Give proper credence to the recent developments by other eminent piano builders. Put money into Steinway to fund such developments that may be required!

The success of Steinway ultimately derives from the success of the instrument with the top artists of the classical piano world. Domestic sales derive from this platform.


thumb

Excellent assessment. Especially the last paragraph.

The principal reason why the Steinway family sold the company to begin with was a lack of desire and funds among the many heirs to effect needed capital improvements in order to compete.

And so, we have yet another change in ownership. With such comes new opportunity for investment in capital improvements. Indeed, this is expected. Growing competition in Europe and the Orient - not to mention a few makers in the USA who would love to dethrone the King - can be best met by one who certainly has the ways and means to make a go of it, and a track record that has "success" written all over it.

The only thing that I would add to kaylee21 - and very much in keeping with the closing thought - is: please make no moves of any kind to the Pacific Rim. The temptation will be great. Resist it. You'll be glad that you did. We will too.
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#2164804 - 10/11/13 10:27 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
I wouldn't have to high hopes on improvement. Nor of his wealth. Nor of his investing capabilities: http://www.bloomberg.com/news/2013-05-07...th-in-rout.html

He is hedge fund owner. Their specialty: Selling everything in a company which has any value and then earn money on the bankruptcy.

The first step has been made: Steinway hall has been sold.
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#2164810 - 10/11/13 10:40 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
Steinway hall was sold prior to the sale of SMI and before any negotiations with Kohlberg and/or Samick and/or "Third Party unnamed."

Other than Bloomberg's usual "eye catching" headlines, you might read the entire article.
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#2164838 - 10/11/13 11:18 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Ed McMorrow, RPT Online   content
2000 Post Club Member

Registered: 12/09/12
Posts: 2408
Loc: Seattle, WA USA
Since this thread has moved into the different types of "investments" large investors can engage in-what you see is how so much of "investing" has become gambling. The analysis of these Credit Default Swaps includes probability calculations. Otherwise known as "Odds Making".

All of these entities that create these things are doing nothing for establishing an accurate value of a particular business. What they are doing is using the equity markets as a front for pretending to be in the investment business when what they are doing is gambling. There seems to be very little remaining in the valuation of equities regarding making an actual profit from sales of goods and services.

These investment houses have leveraged up their own enterprises through obfuscation of risk. When derivatives were invented I asked several wall street types how they could determine the real risk-and they would respond with some concatenated, contorted logic about bets on the upside and downside etc. When you delve into them the real downside risk of derivatives calculates out as INFINITE.

Also since the money supply is debt created this enables investment bubbles. When a certain class of equities is gaining in value-it can be leveraged and this will expand the money supply which feeds cash back into the inflating equity.

We should return to profit as the driver of equity valuation AND change growth of the money to one based in profit growth. You heard that idea here first. No one else is thinking this way. Yet?

I don't think Paulson would be buying Steinway to loot it. He would loose credibility around NY and not get invited to the right parties.
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#2164844 - 10/11/13 11:28 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
wimpiano Offline
1000 Post Club Member

Registered: 09/16/13
Posts: 1611
Loc: The Netherlands
Sorry Marty, it was indeed a bit to easy.

@Ed, fair point
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#2164854 - 10/11/13 11:53 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7439
Loc: Rochester MN
This whole highjack from the intent of this thread, or even the site, should be removed from Piano World and discussed @Hedge Fund Universe.

@McMorrow, You have suggested making donations to Piano World. Have you considered leading by example or taking out an ad?
_________________________
Marty in Minnesota

It's much easier to bash a Steinway than it is to play one.

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#2165806 - 10/13/13 09:01 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dave B Offline
1000 Post Club Member

Registered: 08/01/11
Posts: 1974
Loc: Philadelphia area
Mr. Paulson just bought a prime piece of waterfront property at an unbelievably low price. He and his partners are partying and will continue to party long after they sell it.

I think the big question is weather the manufacturing can be moved to another location inside of or outside of NY City without effecting the branding value? I think it can be and I think it will be moved; and I'm often wrong. This just seems to me the most likely of many possible outcomes.

In the end I see Mr. Paulson and partners selling Steinway and Companies, less the waterfront property, for a little more than purchase price. The nice piece of waterfront property will then be, at the right time, sold off for modest profit somewhere around $1B.

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#2191192 - 12/02/13 12:50 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
E. Christensen Offline
Full Member

Registered: 09/29/13
Posts: 38
Wow! Reading through this thread is like running through a maze. To the original person that posted, Sally Phillips, thank you for posting that YouTube video. Steinway will forever be an important name among piano brands. They play beautifully.

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#2191301 - 12/02/13 09:15 AM Re: New Owner of Steinway, John Paulson [Re: Dave B]
Dara Online   blank
1000 Post Club Member

Registered: 06/18/09
Posts: 1046
Loc: west coast island, canada
Originally Posted By: Dave B
He certainly said all the right things. Maybe his sisters told him what to say.
I wonder what they think about their brother buying Steinway.


steinway being a very fine american 19th century company and ongoing institution with significant contribution to piano, various instruments, and performance , still thriving today...
no wonder the sisters would be delighted.

my aunts (2 sisters) , happy with their old heintzman might not have noticed

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#2192209 - 12/03/13 11:46 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
PaintedPostDave Offline
500 Post Club Member

Registered: 06/09/10
Posts: 557
Loc: Upstate New York
I got two things from the interview. One, expecting that owning a Steinway is an investment and will appreciate in value and two, his pronunciation of epitome as "epy - tome". I have never heard that version and it does not exist in any dictionary that I have access to. Perhaps it is the way the really really rich speak. From now on it will be epy tome for me and if anyone questions it I will simply say "that's the way the owner of Steinway says it". smile
_________________________
Dave Koenig
Yamaha M1A console
1927 Knabe 7' 8" grand
https://sites.google.com/site/analysisofsoundsandvibrations/

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