We see this happen, too

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From  a summary of a new episode of “Hardcore Pawn,” set on a day when gold has taken a big drop (although the claim that it dropped 5% is bogus — that would be around $75 and gold doesn’t move that much in a day):

When a woman came into pawn her gold bracelet, she was told she could get $250. She had received $300 in the past for it and demanded the same. When she was told that the price of gold had dropped, she told the woman at the window that it was not her problem and wanted to see a manager. When Ashley came to confront her, she called her out to the parking lot, without Byron. Ashley handed her back her bracelet and told her to have a good day.

At our Maui pawn shop, we have a lot of customers who pawn the same item over and over. They know and we know what the loan value is, and writing up those loans goes really fast.

Maui is a tourist island, and plenty of workers in the visitor industry have busy and slow periods. They use pawn loans to smooth out their cash flow so they don’t get behind in  their bills.

Most of these regular customers are quite sophisticated about the value of their collateral. Unlike the lady in the “Hardcore Pawn” episode, they don’t get bent out of shape when they’re told they cannot get as much as usual.

On the other hand, sometimes when gold is rising, a Kamaaina Loan pawnbroker will be asked for, say, $100 and will check the New York gold price and say, “You know, you can get more for this now.”

Some take more, some say, “No, that’s all right. $100 is what I need.”

The really sophisticated ones recognize that some lendable items can lose a lot of their appeal overnight. This is true, for example, of video game systems. When the new Xbox or Playstation comes out, the old ones lose a lot of their value. Since the game system makers usually announce new versions well in advance, the value actually starts adjusting well before the new version is released.

What are they worth now?

What are they worth now?

Something similar happens with cellphones. They are very lendable, but every new version of the iPhone makes the old ones worth less. There have been so many versions of the iPod that it takes a maven to keep straight the market value of the various models and features.

Gold, silver and diamonds are less predictable. They aren’t coming out with a new version of gold.

Gold today is under $1,300 an ounce. It was over $1,300 a few days ago. No telling where it will be next week, particularly since the issue of the government shutdown is still unsettled as this is written.

 

Exploiting Native Hawaiians

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Ian Lind (at ilind.net) has a good report from the trial of the Hawaiiloa Foundation  (which is on Oahu although the actions originated on Maui) and it is worth your time to read.

The Maui News has not caught up with this story.

Lind (a retired newspaper reporter now blogging local issues) examined some of the documents used to collect fees to “save” Hawaiians from having to pay mortgages. His conclusion:

Both claim to draw authority from a hodgepodge of sources from Hawaiian royal land patents to the Magna Carta, and both include an “Insurance and Indemnity Bond of Ownership” claiming to draw on $300 million “of lawful specie alloy or exchange in market currency” via the “Hawaiian Treasury: Waihona Waiwai, backed in gold, silver and national securities derived fro 33/1/3% kanaka vested lands, resources and rights.”

The two documents are essentially identical, with the appearance of a legalistic form filled with obscure and sometimes nonsensical gobbledygook.

– See more at: http://www.ilind.net/2013/10/11/on-scams-and-the-sovereignty-narrative/#comments

 

They got his number, and his, too

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Kamaaina Loan blog has often pointed out how stupid a crook has to be to fence stuff at a pawn shop. Here’s an example

A stolen vase

A stolen vase

from Illinois that’s a little bit off the beaten path: Police busted two guys for stealing 100 bronze vases from cemeteries. That’s about $50,000 retail value of vases, though much less as scrap, which is what the crooks sold them for.

The buyer was a scrap yard, not a pawn shop, but in that jurisdiction both types of business are covered by similar reporting rules. (Same with Hawaii, although scrap metal dealers have their own ordinance.) In any event, the outcome was the same: a routine check by police turned up suspicious items, and from there it was a simple matter to get full identification of the sellers.

Harl said that it is not uncommon for scrap yards to turn away customers who are selling likely stolen goods. In terms of the vases, he said employees might not have been aware of what they were. Harl said it is illegal for a scrap yard to knowingly accept anything taken from a cemetery.

“A lot of these (thieves) will come up with a legitimate story before going to sell them,” Harl said. “This isn’t their first time around the block. If scrap dealers get suspicious of everybody, they won’t be in business for very long. They are in business to do business, and not necessarily to help us out.”

But, in doing their due diligence, and following with ordinance guideline, the scrap yards and pawn shops are helping out in a big way.

“The ordinance is stringent, and effective and something that allows us to keep close tabs on items being accepted by various dealers in the city,” Aurora City Spokesman Dan Ferrelli said.

Bronze memorial vases turn up in odd places sometimes. We saw an urn for ashes at a “Storage Wars”-type auction once. It was empty.

Somebody offering 100 ought to be enough to make any buyer curious, but the story makes it sound as if the thieves fed them into the stream of commerce a few at a time, spread over two counties.

Probably thought they were being clever, but you’d think if they were even a little bit smart, they’d have started having doubts after being asked the third or fourth time for their fingerprints.

Can you pawn wine?

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wine

Not at our Maui pawn shop, where gold, watches, surfboards and fine art are accepted. But Kamaaina Loan would need a license from the Maui County Department of Liquor Control to make a loan on wine.

But just because you cannot do it here does not mean it cannot be done. According to this report, a few pawn shops are in the business of lending on fine wines.

They have to be stored properly:

The market here was investment-grade wines with good provenance that have been stored at a secure climate-controlled facility. The wine acts as security for a loan equal to a percentage of its market value. Pay back the loan and get back the wine (which may not have physically moved from the wine warehouse when it is stored). Fail to pay the loan and the pawn shop owns the wine.

And, no, you cannot raise scratch on your carefully hoarded collection of Mad Dog 20-20. Anywhere.

When the late Dick Tuell was auctioning off abandoned property, he would occasionally spot a half bottle of whiskey. (Yes, people do put whiskey in storage.) He was always scrupulous in saying that the bids for the storage locker did not include the booze. That was thrown in free, to avoid violating the county’s licensing law.

 

Pawn shop busts ring thieves

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From New Mexico, a story about how an alert pawnbroker used a tip from a savvy theft victim to catch two thieves.

Reason to celebrate

Reason to celebrate

It started when a woman advertised on Craigslist that she wanted to sell her wedding ring for $6,000.

OK, not too savvy to start with. At our Maui pawn shop, we cringe when we see ads that, in effect, tell bad guys: “I have something valuable, come on over and take it from me.” There was a notorious Florida case where  Craigslist seller with a boat was lured to a secluded location and murdered. In the New Mexico case, the woman was not hurt. When she handed the ring to the robbers, they ran.

But at least she had a digital file photograph of her ring, and she was smart enough to email it to every pawn shop in town.

On Maui, she could have used Kamaaina Loan’s mystolengoods.com to post her loss, not only to us, but for the police to see. (The New Mexico story does not say, but the woman should also have reported her loss to local police. Probably she did.)

Then she got lucky. The robbers brought the ring to a pawn shop, and it was distinctive enough that the pawnbroker recognized it. He did not offer to buy it, but he did get a license plate number as they drove off and reported that to the woman. She called the police and arrests follow.

She was lucky in more ways than one. First, she wasn’t injured in the robbery. Second, the robbers went to a pawn shop and not to a flea market or other unlicensed outlet. Third, the robbers didn’t try to fence the ring on  the Internet.

Despite common belief, pawn shops are not an easy place to fence stolen property. They are probably the most dangerous.

First, pawnbrokers are trained to spot suspicious characters. Second, many (though not all) have computer systems that help organize information about stolen goods. Third, if the pawnbroker is unwary enough to take in the stolen property, he also takes in picture ID, address, thumbprint, usually a telephone number: Everything needed to make it easy to trace the miscreant.

It’s a good idea to keep records of your valuable property: serial numbers, photos, receipts. And back them up on a disc or external drive in case the valuable property that’s stolen is your computer.

 

 

Why did gold swoon?

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Don’t get your hopes up. By the end of this post, we will not be able to tell you. But watching gold take a $40 swan dive the morning the government shut down raises plenty of questions.

Here at Kamaaina Loan, gold transactions make up over half our business, so we are intensely interested in price movements. But we have no influence. We buy and sell based on each day’s spot price in New York.

Also, we make no predictions about which direction the price will go. All we know is that it will go up, or down, or (rarely) stay the same. Recently, gold has been steadily dropping. After briefly hitting a record$1,900, it is now selling in below $1,300.

Last week, Goldman Sachs and other big operators predicted that during 2014, the price would average in the $1,200s. This seems bizarre. The Federal Reserve is printing money at the rate of $85 billion  a month, which is supposed to make money worth less, compared to gold.

And you’d have thought that shutting down government would be bad for stocks and dollars and good for gold. Wrong.

The stock market held steady and gold made one of its biggest one-day moves all year — a move down.

Bloomberg News reported that big players were betting that the shutdown would not last long, thus shortcircuiting any flight to precious metals, which is a usual response in troubled times. Go figure. One analyst told Bloomberg:

“While the standoff is not a great thing, the effects seem to be limited, and we are not seeing investors rush to gold for its safe-haven quality,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Riskier assets like equities seem to be in favor.”

However, Bloomberg also found an analyst, Ron William, who thinks gold will hit $2,000 next year, which would be a record.

Whatever, we stand ready to buy, sell or lend on gold every day.

A reliable kind of gold

A reliable kind of gold

 

We admire a fake

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Yesterday found us around the desk admiring a phony Mexican 50-peso gold coin.

A customer had offered to sell it, along with a fistful of pre-1964 US silver coins, which were genuine and which we did buy.

Mexican 50-peso golds, real or fake, are not rare, and we do not stop to admire them. But this fake was a beauty. It looked right. It felt right. It weighed the right amount. If it had been real, it would have been worth well over $1,000.

It would have fooled most people, which, of course, what somebody had designed it to do. But it did not fool the go/no go gauge, which is almost the court of last resort when it comes to checking coins. (The last resort is cutting into the coin for acid testing; which if the coin has — or is supposed to have — collector value you do not want to do.)

The run-of-the-mill fake gold coin is made by forming a mold from a genuine coin, then pouring in molten metal while the mold spins rapidly. This spreads the metal to the farthest reaches of the mold,  but it also leaves a gradient that is obvious at a glance to a trained eye.

It will fool most of the people most of the time, which is good enough most of the time.

This fake, however, was struck on a die, the way genuine coins are made. It takes a pretty hefty die to make coins, so the spin mold method is easier for counterfeiters. This one had a perfect “boardwalk,” the flat area next to the milled edge, which tilts in a spun coin. Every detail was crisp as only a die-struck coin can be.

However, however the die was made, it was not exactly the right size. (Getting the weight exactly right is difficult, too, but not impossible.)

It is very common, when we are brought counterfeit coins, to have them come in along with genuine ones. It is unlikely that the customer made his high-class coin; or than anybody on Maui is striking such good fakes. We cannot tell, but when someone brings in a fake, it is usually most likely that they are victims, not con artists.

It is not a pleasant part of the pawnshop business to tell a customer that he has presented you a phony coin. The implication is either, “You are a crook” or “You are gullible.”

In  the first instance, you don’t want his return business; but in the second, you do (at least if he brings in better goods next time). But who can tell?

The moral of this story is: Know who you are buying from. The fakes are getting better and better.

The next item of business yesterday was a “collection” of bottles, including some wine bottles that could have been brought the day before yesterday at the grocery store, with wine in them. Some of the older bottles were potentially collectible but chipped. The whole collection was valueless. At least to us.

The next item after that was in a way the exact opposite of the fake gold coin: a small jade necklace. It was real but also valueless. You can buy these trinkets from vendors at Waikiki for a dollar or two.

Sometimes it’s a relief when a customer brings in a fishing reel. Its gears may be worn out, and it may or may not be worth hundreds of dollars, but at least you don’t have to wonder if it’s “reel.”

The real McCoy

The real McCoy

 

 

 

 

Annals of dumb crooks

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And a not-too-bright employer, as well.

This story about a minor fiddle (total value to crook: $507.93) leaves us with some questions.

First, why didn’t he throw the pawn tickets away? He was not planning to redeem the computers he stole.

Second, why didn’t the school system have 1) an inventory sticker on its computer; and 2) an inventory check.

If you follow down in the comments, you get this gem:

One time I found a pc on the curb to be picked by the trash collector.

I took it in and found over 12,000 medical files relating to a certain hospital.   Yes the pc belong to a doctor.

If that anecdote is valid (and we have no reason to think it isn’t), then you can see how a pawn shop has some difficulty in confirming that a customer really does own the item he’s pawning.  Our Maui pawn shop requires the customer to state that he is the owner, and as further encouragement to square dealing, to leave his ID, thumbprint, address and phone number with us. (Part of that is required by law.)

But since by definition, all our collateral comes in a second-hand goods (even if sometimes still new and in its shrink wrap), and because items (like computers) can pass from hand to hand, even a sticker label reading “Kanawha County School District” would not necessarily tip us off to suspect a theft. (See comment quoted above.)

What does help is notification of losses. That’s why Kamaaina Loan And Cash For Gold has mystolengoods.com. It’s a unique and free service. If you’ve been ripped off on Maui, file a police report, then post up a description of your lost goods.

We check it every day. It is used more for stolen jewelry than for computers but it could include anything.

Knowing your serial numbers helps, of course, especially with things like computers. But waiting more than a year to notice you’ve been robbed pretty much guarantees that all precautions are going to be unhelpful.

The story does not say whether the school district recovered its computers. Probably not.

 

Banks abandon the average Joe

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I cannot say I think much of this New York Times Dealbook story about changes in the pawn business.

It seems to be based on the novelty, to the reporter, that some pawnbrokers are offering platinum debit cards.

Of interest, though, is the statement that

banks zero in on more affluent customers who promise twice the revenue of their lower-income counterparts, close branches in poor areas and remain stingy with credit

This is news only to the New York Times and is incorrect to boot. Banks have been looking for ways to stop serving half their customers for a generation, ever since it dawned on them that 50% of their clients account for 150% of their profits. In other words, banks not only don’t make small profits out of Joe Sixpack, they make losses.

Were it not for government oversight, you would not find a bank branch anywhere on the poor side of town, and you will not find many.

It is entirely understandable why banks would want to behave this way but not very nice. When they say, we want to be your bank, they don’t really mean it.

Meanwhile, pawn shops keep on serving all comers, as they have for centuries.

Note also this statement:

EZCorp, a publicly traded operator of pawnshops, reported that total loan balances swelled 22 percent to $44 million in its most recent quarter.

EZCorp is big for a pawn business, but $44 million is unnoticeable in the context of commercial banking. In other words, EZCorp is there for the little guy.

 

 

Bye-bye Blackie

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The piece below about Blackie Gadarian ran in The Maui News. There was much more of Blackie that could have been said. He was, for example, one of very few people who owned a recreational tugboat:

In a world of pussyfooters, Blackie Gadarian walked in hobnailed boots. They were disguised as black Keds, part of his invariable costume of orange shirt and black trousers.

Blackie said what he thought, whether the subject was cheapskates, jazz music, traffic, ignorant tourists or the value of a college education.

Not that Blackie downplayed education or college; he was a well-traveled, well-read read man. But he considered, and proved in his own long life, that you could do very well without going to college. Each year, he and his wife Sara presented $500 grants to Lahainaluna School graduates who were not going to college.

Blackie was, among other things, a machinist. He made rolling stock for the Lahaina, Kaanapali & Pacific Railroad, and custom brasswork for the Hyatt Regency. The later, larger and grander Grand Hyatt used off-the-shelf brass, which Blackie deemed a comedown.

If you only know Blackie for his frequent, short, funny letters to the editor of The Maui News, you missed the essence of the man. He loved to talk, and lots of people — I among them — enjoyed listening.

You heard the most surprising things. At the invasion of Tarawa in 1943, a torpedo sank the small aircraft carrier Liscombe Bay, killing 600 Americans in a matter of minutes. Once Blackie mentioned he had been aboard a similar carrier just a short distance away. He never said anything else to me about his Navy service.

Late in life, after he closed his bar, Blackie’s Boatyard, and his machine shop, he wanted a place to work, so he bought a lot on Luakini Street and built a place with a pool table and workshop. A neighbor came over and pointed to a tree on the lot. As Blackie told it, “He told me a Hawaiian family had lived there in the old days, and they drank and they threw their empty bottles under the tree. ‘If you dig there, you’ll find plenty of collectible bottles.’ So I immediately had four inches of concrete poured around that tree. I don’t want anybody digging up any damn bones.”

Blackie was famous for throwing customers out of the boatyard. He told me he once threw out a young couple who tried to order one hot dog between them. He considered that unacceptably cheap.

Some people disliked such displays, but when an African-American woman he had ejected filed a discrimination suit, Blackie testified under oath that he threw people out without regard to race, creed, color or national origin, claiming a personal best of 23 in one day. He was acquitted of racial prejudice.

The Boatyard was filled with Blackie’s gags. He probably was most proud of the whale egg, which was about two and a half feet long and resided in a glass case with a placard that explained that Maui’s humpbacks laid their eggs in crevices at the bottom of the Alenuihaha Channel. Blackie claimed that many tourists believed it, and I believed him.

Blackie called me a few months ago to say he was working on his memoirs. I said I would be the first to want to read them, but I guess that pleasure will have to be foregone. The one and only Blackie Gadarian died July 21 after a short illness and a long life filled with fun.