The police can’t do that

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From here on Maui, we have been watching with concern  a move by the Honolulu police to force Oahu pawnbrokers to use international software company proprietary software to report pawn loans and purchases of secondhand goods. Kamaaina Loan is not opposed to electronic reporting of pawn transactions; we have done it to Maui police for years and, in fact, were the first pawn shop anywhere to do it.

But the off-the-shelf software can be used abusively, and this story from the Dallas Morning News confirms our fears — pawn reporting software is being used to profile citizens and harass them. It is more than a little startling that the Dallas police cooperated with the reporter, since their behavior is clearly unconstitutional, but they not only admit it, they celebrate their misbehavior:

Every two weeks, Franklin circulates a list of his top 10 “pawnees” to other areas of the department. Tarves ranked No. 3 in May for selling and pawning dozens of items in two weeks, including jewelry, gold, computers, vacuum cleaners, sports memorabilia and watches.

“We’re not picking on pawnees, not picking on pawnshops — just looking at things that look suspicious,” Franklin said.

People usually make the watch list if they have had prior run-ins with the law along with suspicious activity. Several sales of the same type of item — such as selling multiple TVs — also raise red flags.

Note that not only do the Dallas police not have probable cause to suspect these “top 10” customers of a specific crime, the police do not even have evidence that a crime has been committed.

While the story says that the police use the software to try to match records of stolen items with records of pawn transactions — something legal and even smart policing — it makes clear that they are also using the software to generate freeform — and evidence-free — hit lists:

Not many people on pawnee lists obtained by The Dallas Morning News had been arrested on property crime charges, including Tarves. He has been convicted of theft by check and has two check forgery charges pending.

Franklin said the charges can be difficult to prove because even if the goods were stolen, authorities would have to prove that the seller was the one who originally stole them.

But police have the person on their radar and might connect them to other crimes. Franklin said he gets positive feedback within the department.

Get that? “even if the goods were stolen”

The software — there are two main competitors in this area — can be used in even more abusive ways. Although the story does not indicate that Dallas police have done so, police can equip squad cars with interactive computers that track persons they “think” are suspicious and alert cops on patrol when they enter a pawn shop.

Think about that. And let’s take it out of the realm of pawn shops. Suppose police think you are a shoplifter, based on nothing more than that some computer program profiled you for “shoplifter-like” behavior;  and then, every time you walk into Macy’s, the local patrol car comes by to follow you.

You’d be outraged, we think, and rightfully so.

 

 

A few words about protecting artwork

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Via Pawn Times, a link to a page of advice from Beverly Hills Pawn (where the movie stars go, so they say) about how to protect your artwork, particularly prints, lithographs and photographs.

Take good care of her

Take good care of her

Our Maui pawn shop also takes artwork in on pawn, and like Beverly Hills Pawn, we store it in climate-c0ntrolled spaces. The post has some cautions about storing your stuff at home, and that goes double for Maui, where humidity and mold are worse problems than in Southern California.

The post does not say it, but protecting art is cheap (how much can a Mylar sleeve cost?) while having a conservator restore it is expensive.

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According to this Huffington Post story, in the five years 2007-2012, the number of pawn shops in the United States grew from 6,400 to 10,000.  We’re not too confident in the numbers. Nobody really keeps track, and other sources claim the country has about 12,00o pawn shops. santy If it is correct that there are 3,600 more pawn shops than there were before the stock market swoon of 2008, then that’s 2 new ones a week. It also means there are about as many pawn shops as McDonald’s hamburger stands. Whatever that says about us. On the other hand, the number of gas stations dwarfs both pawn shops and Mickey Ds at 159,000, but that’s down from 200,000+ 20 years ago (and down from over a quarter of a million in the cheap gas era of the 1950s). (Numbers from a website called howmanyarerthere.org, where you can play this comparison game all day long.) Well, whatever the exact number, the Huffington Post story fingers the reluctance of the big banks to lend to “non-standard” people and the decline of the “community banks,” which were allegedly a source of money for such folks in  the past. We doubt the accuracy of that. The most we’d accept is that smaller banks were prepared to make smaller loans that the big ones wouldn ‘t bother with. On the other hand, really small banks couldn’t lend much, because regulators tried to prevent them from making loans that were a large fraction of their capital. On the third hand, for Huffington, “small” means up to $100 million, which is enormous by pawn shop standards. Even the big chains don’t have total loans that approach that. Most of those 10,000 pawn shops do under a million a year, probably. But the point, made to Huffington by our friend Jerry Whitehead (a consultant who advises Kamaaina Loan) is that:

pawnshops are focused on consumers who are “getting forgotten in the banking system.”

We’d put it another way. Unlike other lenders, pawn shops don’t turn away anybody. If you’ve got collateral, we’re good to go.

Pawn 101: Pawn shop scammed

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Is that real gold?

Is that real gold?

Here’s an odd little story — in its entirety — from the Bradenton Herald:

MANATEE — A Manatee County pawn shop has been ripped off by a jewelry fraud artist.

Officials with America’s Super Pawn, 5612 15th St. E., say they paid out $550 for what they thought was a 10-karat gold chain with charms, but which turned out to be worthless metal, according to a Manatee County Sheriff’s Office report.

The transaction occurred on Oct. 1, but the pawn shop manager was just notified Tuesday by the company’s jewelry analysis expert that the gold chain was fake and of no value, the report states.

The pawn shop manager notified the sheriff’s office.

It is believed the subject who sold the necklace has sold other fake jewelry to pawn shops throughout Manatee and Sarasota, the report adds.

Odd because at our Maui pawn shop, we test all gold coming in. It is possible to fool the tester, but the touchstone is seldom fooled by something like a chain. Didn’t Manatee Pawn Shop test?
Maybe it was busy and they were in a rush. So if you ever have to wait a minute or two during the Christmas rush because the customer ahead of you in line is having her chain tested, that’s why. Always test.
Odder yet is the hint that the same scamster has hit other shops. Don’t any of the shops test? We know some Florida pawnbrokers, and we are sure almost all of them do test.
Has somebody in south Florida gone to the trouble of making some trick chains that defeat the touchstone? It could be done, but it would be a lot of work, both to manufacture the fake chains and then to pass them out in $500 lots all over a county.
Read more here: http://www.bradenton.com/2013/12/10/4881419/manatee-pawn-shop-ripped-off-by.html#storylink=cpy

A depressing tale of fake pawn shops

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The Milwaukee Sentinel has uncovered a depressing — some might go so far as to say, slimy — story about how the Bureau of Alcohol, Tobacco and Firearms goes about intercepting illegal gun sales. It involves treachery, sales of illicit drugs, recruitment of mentally-damaged mules . . .

And that’s just on the law enforcement side.

Among the tactics was setting up fake pawn shops. Thanks ATF. It’s not as if legit pawn shops like our Maui operation don’t have to struggle against an undeserved — we think — reputation of pawn shops as fences and exploiters.

How bad did it get? What’s known is very bad, but there are reasons to suspect the situation is worse than the public knows:

The ATF refused the Journal Sentinel’s request for an interview with Director B. Todd Jones or other agency officials to address findings of the investigation. Instead, the agency provided a written statement that failed to answer any questions, and spokeswoman Ginger Colbrun suggested reporters read ATF news releases issued after the stings.
The use of falsefront businesses to capture crooks has a long and, at least in the hands of journalists, distinguished history. The Chicago Sun-Times and the Better Government Association once set up a bar called the Mirage (get it?) to capture corrupt city inspectors. They won a Pulitzer Prize.
One difference between them and the ATF was that the journalists were not themselves criminals.
As more revelations come out — and it looks like both parties are ready to have Congress investigate — it is unlikely that there will be local examples. Hawaii pawn shops do not generally deal in firearms.  But on behalf of our honest colleagues on the Mainland, we are just as angry as we know they are.

Badge of shame

Badge of shame

Read more from Journal Sentinel: http://www.jsonline.com/watchdog/watchdogreports/atf-uses-rogue-tactics-in-storefront-stings-across-the-nation-b99146765z1-234916641.html?ipad=y#ixzz2n0kGefcZ
Follow us: @JournalSentinel on Twitter

Pawn 101: Pawn records aid Maui police in death investigation

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Kamaaina Loan’s pawn manager Krystal Cabiles is famous in the pawn shop for her steel-trap memory for names, faces and phone numbers. Krystal did it again today, when she matched a photo that Maui police had posted on Facebook with a pawn customer she had seen — just once — two months ago.

The body of a man was discovered a few days ago on the grounds of a Lahaina resort, and police retrieved a driver’s license. But the information on it led to a dead end, and police could not trace the man’s family. They are withholding information about him until they can find them.

They didn’t even know where on Maui the man had been staying.

Krystal says she was “making my nightly Facebook rounds” when she saw the picture. She recognized it. The man had done a pawn loan with us, and the records gave his name, address, fingerprint etc. Even better, although visitors don’t have to tell us where they are staying (we use their home addresses), the man had mentioned the resort where he was staying, and even why he was on Maui.

At police request, Kamaaina Loan blog is withholding that, too, until the family can be found. But it was a good thing the man had mentioned where he was staying, because he forgot his driver’s license. Our pawn broker Alan Cooperstein drove all the way to the west side to return it.

So this morning, Big Rich was able to tell the police where the man  had been staying, and using a credit check program, supplied a list of what appeared to be his relatives and, possibly, the name of the man ‘s family business.

As this is posted, police are following the leads.

As Big Rich rec

Richard Dan on Maui

Big Rich, tracer pf lost persons

alls, this was not the first time his pawn records solved a mystery. Once, years ago, a pawn ticket found on the body of a murder victim in Los Angeles led police to Big Rich, who had the victim’s pawned radio, which had his Social Security number on it.

 

Pawn 101: Pawn shops get more respect

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As an old newspaperman, it pains me to say it, but TeeVee is capable of performing feats — so far as public opinion goes– that print just cannot match. Case in point: Making pawn  shops respectable in the public eye.

We have mentioned a couple of times that Fender has a “Pawn Shop Special” line of instruments and amplifiers, but while this shows a certain degree of respect, it is not general. Rather, the theme seems to be that musicians, who unless they hit the big time lead a rather hand-to-mouth life, rely on finds of still-good but cheap equipment in the retail departments of pawn shops. Nice but not a full-throated endorsement of the place of pawn shops as bankers to those abandoned or ignored by the big financial institutions; or even of just the convenience of no-credit-check, no-hassle (as we say in our Maui pawn shop: NO HUMBUG) borrowing.

(For context, there are other businesses that are so chancy that in a sense new entrants rely on the lack of success of previous risk-takers. Restaurants have a very high closure rate, much higher even that the generally high failure rate for all small businesses. So there is always a lot of used equipment for sale: professional refrigerators, mixers, coolers etc. Since it’s commercial-grade, it tends to be rugged and if it hasn’t been abused,   reliable. But the depreciation rate is worse than for cars. We have seen a commercial mixer, in good shape, that goes new for $60,000 go at auction for about a grand. Some pawn shop operators do get involved in used restaurant equipment. Kamaaina Loan occasionally buys at foreclosure auctions, rather than direct from restaurateurs or as forfeitures on loans — most collateral we accept is hand-carried to the counter, not possible with most restaurant equipment — and resells to new hopefuls. But it seems unlikely that Hobart will be coming out with a “Pawn Shop Special” line of slicers. There’s no inherent reason that musicians should feel more attuned to shopping at pawn  shops than hot dog-stand owners, but they do.)

Which brings us to today’s special pawn shop news, a real breakthrough — as we see it — in the image of pawn, and due largely to the impact of reality pawn shows, especially top-rated “Pawn Stars.”

In fact, the Pawn Stars are the stars of the new TV commercial by Microsoft that uses Rick of  “Pawn Stars” to bash Google Chromebooks. The theme is that a used Chromebook is not worth anything to a pawnbroker because it’s “not a real laptop.” This digs at Chromebooks’ bargain-basement approach which means it can do work if you are on-line but not so much if you are not connected to the Web.

Well, being used as authority for dissing other brands is not quite in the league of being called the Cadillac or Tiffany of whatever, but it’s a big step up from being seen as the resort of down-and-outers and burglars.

The way we see it, pawn shops haven ‘t changed very much. Most Americans have  never been inside one. Maybe one in four have used pawn shops for one purpose or another. TeeVee has given the rest of them a look inside, and what they saw was far different from what they saw when Rod Steiger played
The Pawnbroker.”

All this could lead to some long thoughts about how mass opinion gets formed. No question the movie “The Pawnbroker” had as much to do as any other episode to form the public reputation of the pawn business, even if nine out of 10 Americans never saw it.

But the ones who did spread the meme of pawnbrokers as avaricious, hard and unscrupulous. Nine out of 10 Americans have never watched “Pawn Stars,” either, but the one-tenth have brought it up in conversations with friends, and print and on-line media have written about the phenomenon. So that a new ingredient in the froth of public perception has been added, and overall a positive one.

Thanks, Rick.

A look inside the gold price mechanism

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Revelations that London banks manipulated the LIBOR interest rate — misbehavior for which they have been fined billions by regulators — has prompted a closer look at the ways other financial markets are manipulated, including gold, one of the biggest — $20 trillion (trillion with a T) according to Bloomberg News.

It appears that the term “London fix” may be as problematic for gold as for LIBOR (which is a base interest rate that has spillover effects on rates you and I pay, for adjustable rate mortgages or credit cards, and much else).

Should it prove that the five banks — at least two of them already proven to be corrupt — that fix the London rate have also been gaming the gold price, that might not have a great deal of impact on our Maui pawn shop. We buy and sell gold based on the New York spot price, which is updated every 15 seconds during the business day; but we do not change our benchmark so often. Besides, our prices are flexible within a few dollars or so (out of, at this writing 1,245 dollars), so we are not playing in the same league as the arbitrageurs who may (or may not, who knows yet?) be fiddling the gold market.

As the story explains, the mischief seems to come in very short-term (minutes long) bets on futures prices. Pawn shops deal in physical gold, whose value is necessarily somewhat decoupled from the vagaries of the futures market. Nevertheless, suspicions that crooks are loose in the marketplace cannot be welcome. Crooks in banks? Who knew?

“Traders involved in this price-determining process have knowledge which, even for a short time, is superior to other people’s knowledge,” said Thorsten Polleit, chief economist at Frankfurt-based precious-metals broker Degussa Goldhandel GmbH and a former economist at Barclays. “That is the great flaw of the London gold-fixing.”

Stay tuned. Kamaaina Loan blog will be keeping an eye on this.

 

 

 

 

Gold gets interesting

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As readers know, the daily and weekly gyrations in the price of gold (and silver) don’t concern our Maui pawn shop too much. We make our money off commissions, so when gold goes up $25 or down $30, it doesn’t affect us that much.

Where will it go?

Where will it go?

 

But when gold gets near a top or a bottom, then we start paying attention. Today, the Dow-Jones average topped 16,000 for the first time and the S&P topped 1,800 for the first time. As often happens when stocks are up, gold is down, by $17 to about $1,273. That’s near the lowest for the 21st century.

Will it go lower? We have no idea. But here’s a good roundup of differing views from Bloomberg News. Some of the big noises in the Republican Party, like Rep. Paul Ryan, are gold bugs and, the story says, trying to get the Federal Reserve to tie the valuation of the dollar to the commodity price of gold.

Not everybody thinks that is a good idea:

“It’s a stupid idea,” Joseph Gagnon, a former Fed economist, said in an interview. “It’s pretty clear the Fed thinks so, too, since they do the opposite. They go out of their way to exclude commodities.”

It looked different, at least to vice presidential candidate Ryan, in 2010. His prophecy didn’t turn out too well:

To Representative Paul Ryan of Wisconsin, record gold prices in 2010 heralded “a lower standard of living for many Americans.” Representative Ted Poe of Texas foresaw “a blast of inflation that will crush the middle class” adding: “Where gold prices go, other prices follow.” Fellow Texas Representative Ron Paul, a perennial critic of the Federal Reserve, warned that “confidence is being lost in the entire fiat monetary system,” a reference to money created by central banks.

But the price of gold didn’t keep going up, up, up. Instead, it has dropped by a third.

The gold bugs may yet turn out to be right, but not so far.

Big surf

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Yesterday, I drove out to Hookipa to look at the surf. From Baldwin Avenue around the old men’s home, you could see the whole coast was closed out, with surf crashing over the outer reef.

The picture doesn’t show it very well — iPhone cameras weren’t made for that.

It was the heaviest surf I’ve seen in several years, though nowhere near as big as I’ve seen it a long time ago. The big sets came intermittently, and the crests were far apart. At its biggest, Hookipa surf comes in tightly bunched and crashes hard enough to make the ground shake.

Wednesday was nowhere close to that. But it did come quite early in the season.

There’s been some blather about global warming in connection with the typhoon in the Philippines, part of the promised more and bigger storms. You sure can’t prove that by Maui (or by measuring Accumulated Storm Energy worldwide, either).

It rained hard at Kahului Airport Sunday; set a record that doubled the old record for a short period. It wasn’t raining hard Upcountry, and I didn’t realize there was a downpour Downcountry or I’d have rushed to see whether the intersection at Hana Highway and Dairy Road flooded.

That intersection used to flood two or three or more times a year, and become impassable every other year or so, a serious matter since that’s how you get to the airport from the tourist areas. One time in the late ’80s, I forget which year, there was a three-day storm that closed off that intersection for days, cutting off East Maui from West and South Maui.

The alternative way along Hansen Road flooded, too, and that was closed. I reported that East Maui was completely cut off, although it is possible that in a truck you could have gotten down Amala Place, through the airport and out along Haleakala Highway to Hana Highway. I didn’t try it, and it wouldn’t have made a difference in the big picture anyway.

My story in The Maui News made a big deal of the fact that if the state closed Haleakala Highway north of Hana Highway, which it was proposing to do as part of the runway extension, flooding at Dairy and Hansen would truly cut off East Maui any time there was a moderate rainstorm. (Ed Tanji, then reporting for the Advertiser, thought I overreacted; he believed Hansen Road had been closed by a rookie cop who didn’t understand the situation; but he was kind enough not to say a malihini reporter had misunderstood, too.)

Gov. John Waihee, trying to soothe the furor over the runway and flush with $500 million from Duty Free Shoppers that could be spent only on airport projects, ordered Haleakala Highway rebuilt around the end of the runway, which never was extended. Nowadays, if you wonder why the road wanders around in the fields and requires you to make three mysterious dogleg turns, it’s because John Waihee wanted to keep me happy.

It cost $1,000,000, the most anybody has ever spent to make me happy.

Later, as part of the development of Kmart and other big box stores, the intersection of Dairy and Hana was rebuilt. (It was raised, so that the cross-streets flood now in a heavy dew.)

The point (and I do have one, though it has taken a while to get to it) is that after the intersection was raised, it stopped raining. Whenever I saw Warren Unemori, who designed the road, I’d ask him if he was sure it would handle a big storm, and he always smiled and said he was sure it would. But for more than 20 years, until Sunday, it was never tested.

So, whenever the alarmists say we are going to have to weather more and bigger storms, you can’t prove it by me.

The Dairy-Hana intersection stayed open, so Warren was right.