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.

Right turn on hospitals

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In reports Wednesday and Thursday in The Maui News, Gov. Abercrombie says he understands that Hawaii Health Systems Corp.’s financial stability needs to be addressed. Hurrah. It remains to be seen whether the Oahu-centric Legislature understands this yet.

It was obvious from the start that HHSC was the wrong way to deal with the fact that small, rural hospitals can never cover expenses. And when rural people start demanding urban services (like emergency rooms), the shortfall just gets more impossible.

Hawaii is an island state. Inevitably, some places are going to be distant in time and space from urban services. When that service is health care, it is reasonable to expect government to level the situation somewhat by subsidizing rural care. The question is, how?

The answer, in 1996, was to loot the operating profit of Maui Memorial Medical Center, the only one of 12 outside-Honolulu facilities to run in the black, to fund the other 11. This ensured that the 11 would be on starvation rations, while MMMC would be constrained in its development. It was a stupid idea, but appealing to the Oahu legislators because by not making demands on the funds th4y wanted for their local schemes.

The governor said he is open to public-private partnerships as part of the restructuring of the outlying hospital systems. No doubt the Oahu legislators will go for any version of this that does not touch the funds they want for their pet projects. Neighbor Islanders must be on guard against this poison pill.

Because if almost everything in health care delivery is debatable, one is not: No private medical center will cover mental health. Not one.

That’s what Mauians were asked to give up when Ron Kwon and Jan Shields attempted to do in MMHC in favor of a private Kihei hospital. They promised better, cheaper service, but what they meant was NO MENTAL HEALTH CARE.

 

 

 

 

Mean streets

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As Kamaaina Loan blog has noted many times, a pawnshop is a stupid place to try to fence stolen goods, since you have to leave your picture ID, thumbprint, address and phone number — not to mention your performance on the surveillance camera for the burglary squad to enjoy.

But pawnshops are also a poor choice if you are planning to rob somebody. Most American pawnshops deal in firearms, so the people behind the counter are familiar with how guns work.

This is not true for Hawaii, where pawnbrokers mostly choose not to deal in firearms. But in Hawaii, armed stickups are thankfully rare anyhow.

In the tough town of Hamtramck, Michigan, three robbers chose the low odds approach, according to this report from the local Channel 2.

It seems ALL the pawnshop employees were packing heat, and before it was over, one robber was shot dead and the others were in cuffs.

But it was  business as usual for Hamtramck, where, according to the police chief Garbarino:

“It’s not too often we get things like this in Hamtramck. Most of our shop owners are armed around here, not to mention our police response is under 30 seconds. In fact, we were here within 30 seconds of getting the call.”

The story does not say, but presumably the pawnshop had a silent alarm that someone tripped when the bad guys came in.

There’s an easier way to get cash from a pawnbroker — bring in something you own (even burglars must own something), and take out a pawn loan.

Mike's. Don't mess with him

Mike’s. Don’t mess with him

 

 

90% of life is just showing up

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Or 100% for a man named KK Ho, who lost his job but kept showing up anyway, pretending to be a bond trader. The Bloomberg News story does not explain how, or if, Ho got income from showing up.

I recall a story, from 40 years ago, about a guy who lost his job, which was something in demand, aerospace engineering or something like that. The story did not explain why, since the field was good, he didn’t just get another job; but instead he made a sort of a living for a couple of years by sending out resumes.

In those days, men with his background were sought after, so employers would send him plane tickets to come to an interview. He cashed the tickets and drove instead, living off the difference.

But the story of the parking lot attendant who just showed up and after years disappeared with millions is urban legend, according to snopes.com.

I feel sorry for the other Mr. KK Ho, who may (or may not, who knows?) be a legit trader in the same city. Bloomberg could not satisfy itself about that. But with only 100 Chinese surnames, and a fairly limited roster of given names or initials, the possibilities for confusion in an increasingly connected Chinese working population appear to be enormous.

It’s bad enough with the US Office of Foreign Asset Control, which keeps a list of foreigners with whom designated businesses (mostly financial, including our Maui pawnshop) cannot trade. Not even to buy a $10 silver ring.

There are a lot of alleged drug dealers on the list, and if one Juan Garcia in Colombia comes to the attention of the DEA, then Kamaaina Loan is forbidden to deal with any Juan Garcia, unless we can prove ours is not the DEA’s.

Not easy to do.