Saw the first political sign wavers of this year this morning in Kahului. It would be nice if it were the last.
It’s hard to figure what sign-waving is supposed to contribute to the political discussion. Just distracts drivers, who, heaven knows, have better things to put their minds to.
In an earlier post, we wrote about the limitless variety of stuff that comes through our doors. From time to time, the blog will tell about some of them.
Last year, we were offered several small coins, about the diameter of a button on a man’s shirt, that no one could identify and which didn’t show up in any of our references.
But, since the coins tested as silver, Kamaaina Loan acquired them for their metal value. We had to wait several months for Denis, our obscure coin expert, to tell us what they were.
Denis, who lives in New York, visits us several times a year and goes over the oddballs in the coin drawer.
He identified the small silver coins as Cambodian currency from the 13th or 14th century.
How they ended up on Maui we haven’t a clue.
I paid $4.60 for gas yesterday morning and this morning it’s up another 6 to 10 cents. Like you, I have read all the reasons why the price is up, and heard all the nostrums for making it go back down. Except one. The real one.
Yes, it’s true that demand in China and elsewhere is pushing prices up, and that restrictions on deliveries from, eg, Iran are pushing prices up. And that sluggish economic activity in Europe pushes it down.
Those are world forces, and despite the ravings of the Republicans, nothing the United states could do can or will have any significant effect.
But this is not the world, it’s America, and prices are rising in America for specifically American reasons: the unhindered stock market is the culprit. And, no, I don’t mean speculation.
In a world market as big as oil, speculation cannot have more than minor and transient effects. Nobody can corner oil.
The character of the American gasoline system has changed fundamentally over the past couple of decades.
It used to be that when world crude prices rose, that was wonderful for owners of oil wells, but not so wonderful for owners of refineries. The world price of crude is almost always more elastic than the price American motorists are willing to pay for gas. When prices rise, use declines and refiners get squeezed.
It used to be that a large fraction of American gasoline came from integrated companies that owned wells, refineries and, often, distribution networks.
Big Oil, say Exxon, didn’t see its profits zoom quite as much when crude rose, but it didn’t see its margins shrink quite as much when crude fell, either. The system was damped.
Wall Street plungers – and excutives who get paid according to what their stock did this quarter – hated this. It was really hard to goose the stock price.
Integrated oil companies broke themselves up. They sold off their refineries, so that the largest refiner is not Exxon or Chevron, but a company nobody ever heard of, Valero.
Few American business managers really believe in the business cycle, and nobody on Wall Street does. The people who bought Valero don’t, although if they are paying attention, they ought to be changing their minds.
.
A couple of years ago, when demand was down, Valero and other exclusive refiners saw their profits melt. They did what industrial companies usually do: laid off workers and shut down production lines.
Only, for a variety of reasons, refineries are not like widget assembly lines. They are hard to restart once abandoned.
The managers of Valero and the other refiners were too stupid to imagine that, hey, demand for gas might go up again, and pretty soon. When you are managing by quarters, you cannot afford to think 5 or 6 quarters ahead.
So, the economy improves somewhat and demand for gas rises somewhat (a very small thanks to the Obama administration, which has not done much to help the revival but at least has avoided Republican nostrums that would prevent it from recovering ever).
Eh, voila! We have not a shortage of oil – the country is producing more than ever, despite the lies told by Mitt Romney – but a shortage of refineries.
This is what unregulated markets do. Under Bush II, they crashed the financial system. Obama, more’s the pity, did not do anything to regulate petroleum (and, truth to tell, it’s hard to see how this particular exchange of assets could be regulated), and now they have crashed the domestic gasoline supply system.
A self-inflicted wound.
Canal Street in Manhattan, just below Union Square, is a famous, or infamous shopping district where you can find knockoffs of Prada, Gucci, Coach and every other kind of high-end designer merchandise.
At Kamaaina Loan, we make loans on (or buy outright) Prada, Gucci, Coach and other kinds of high-end designer merchandise. But not if we spot that it came from Canal St., or someplace like it.
Can you spot the knock-off? We have resources that help us tell the authentic goods from the fakes, even if you cannot.
So two points:
1. If you want to borrow $100 against that Louis Vuitton handbag, we can accommodate you, probably, but not over the phone. We have to inspect it to see that it’s the real LV.
That’s why we cannot offer estimates over the phone for anything.
2. If you see a designer watch, bag etc. in one of our 5 retail stores — and at an unbelievably great price — it’s not because it’s a fake. If we sell it, we’ve checked and believe it to be authentic.
Our prices are great because our prices are great
You may be following (perhaps in The Maui News) a disagreement between the county planning director, Will Spence, and one of the former directors, Mike Foley, about how detailed the county’s general plan should be.
Well, when I was a reporter, I covered the creation of the current plan; and I have watched the gestation of its replacement.
The plans generally try to look ahead 20 years, and to lay out restrictions and allowances for the next 10 years.
The old general plan took 8 or 9 years to pass, so the 10 years was mostly up before anybody knew what was in it.
What wasn’t in it was much provision for new residential districts in West Maui. As a result, rents went way up. Several hundred million dollars were thereby transferred from the pockets of Maui workers to landlords (many of them not on Maui).
Before this gets corrected, if it ever does, the transfer will top a billion dollars.
That’s right. County dilatoriness will have moved over $1,000,000,000 from the pockets of county taxpayers to other pockets.
The landlords have been very happy (except for the gamblers who thought the gravy train had no caboose and overleveraged).
The current attempt to create a new general plan – called the Maui Island Plan and done under new rules since the old rules didn’t work – is years behind schedule. Not 8 or 9 years yet, but it won’t be long.
Earth to Spence. Earth to Foley. It doesn’t matter what details are in a plan that has not been enacted.
The problem is not with the details. The problem is with completion.
To protect your property and make it harder for thieves to fence stolen goods, Hawaii has a second-hand dealers’ law. It requires buyers of used merchandise to (among other things) hold the purchased goods for 15 days before reselling them.
We move new (that is, used but new to our store) tools into the eBay-tool store at 50 North Market Street every other Wednesday. Today was the day.
I noticed that not all this “used:” merchandise was really used. There were some Stanley items still in their unbroken factory packaging. But we are pricing them as used, not new.
Smart toolhounds will make a habit of checking out our store at least twice a month.
Recently (Feb. 27), we promised to tell you about the history of an unusual pawn shop that didn’t take gold – the favorite transaction of most pawnbrokers – or guitars, firearms, clothing or any of the many, many items that most pawnbrokers deal in.
It was the Provident Loan Society of New York, a non-profit established following the Panic of 1893. In those days, even large businesses could hardly obtain banking services for years, and the situation of the working family in need of a loan was desperate.
The Provident restricted its lending to diamonds, which were the form of portable wealth commonly used by ordinary people. The presentation of a diamond engagement ring was not just an expression of love. It indicated that the groom (the main wage earner in most working families in those days) was solid enough to provide a cushion, beyond the weekly pay envelope, for the security of his family.
In a time when health insurance and unemployment insurance were unknown, when a line of credit (similar to a credit card) was impossible for working families to obtain, possession of a diamond meant the difference between having a roof over their heads and being tossed onto the street in the event of layoffs or injuries or sickness.
But abusive lending practices were common.
The Provident was set up to serve the better-off working poor and middle class. It restricted itself to diamonds, as related in “God Bless Pawnbrokers” by Peter Schwed, an early president of the Provident who later went on to become chief executive of one of the largest publishing houses.
The Provident still exists, but it is not as flourishing as it once was, though today it accepts gold jewelry and gold watches as well as diamonds. While it offered a better deal for those families that had a diamond, it could not compete effectively with commercial pawnbrokers, who were ready to take bigger risks and offer more accommodations for people wanting short-term cash – and who did not have a diamond, even though they might own a TV, tools, or a violin.
Despite looking a little overcast, the weather was perfect for First Friday. By the time First Friday Cam (also known as www.wailukucam.com) went live around 6:45, North Market Street was filled with people, strolling in ideal 72 degree temperatures and soothed by a mild breeze.
Compared with First Friday in February, it seemed there were more children out on March 2, and Jason Schwartz and Harry Eagar kidded around with about a dozen of them. They also interviewed Megan and Jackie from Wailuku Coffe Co.
And the tables were turned when Jason and Harry were interviewed by Marcel and KJ, roving deejays from station KMAR-FM in Las Vegas, who were on Market Street to see what was shakin’.
Visitors from Alberta, Cincinnati, California, Kula, Haiku and even Wailuku stopped by the First Friday cam to wave to their friends.
The first, simple test is to touch the jewelry or coin with a magnet. At Kamaaina Loan, we use a small but powerful neodymium magnet (the kind used in speakers).
If it’s just plate (sometimes sold as gold-filled or under other tricky names), the magnet will be attracted to the iron underneath.
Gold plate is real gold but so thin its value is insignificant.
If the item is not plate, then a series of tests can determine its karat-value, or proportion of gold to base metal.
24K is pure gold. Jewelry is made from lesser karat-gold, because pure gold is too soft to be durable.
Thus, 12K is half gold, and 18K is three-quarters gold.
If gold is selling for $1,800 an ounce (it’s close to that today), then a 14K ring weighing 10 grams contains a little over a sixth of an ounce of gold. There are 31.1 grams in a troy ounce, so the 10-gram ring weighs just under a third of an ounce, and 14K is a little over half gold, so the ring contains a bit more than one-sixth of an ounce of gold.
At $1,800 an ounce, the gold itself has a value of about $300. After it has been refined. The market value of the gold while it’s still in the ring is going to be something less, because of transaction costs, shipping costs and refining costs.
But that’s how a pawnbroker determines how much gold is in your piece of jewelry.
Because gold is the most universal store of value across all times, nations and cultures.
But that does not mean that some societies don’t prefer other forms of portable wealth: silver, diamonds, cattle (which are self-portable).
Until fairly recent times, most people did not use banks. In our great-grandparents’ day, you didn’t just become a depositor at a bank. You had to have an introduction. Most working people were not welcome in banks.
Times change, but the habit of relying on gold, diamonds or silver as an emergency “savings account” remains strong.
In every community, the pawnbroker is the place where that emergency stash can be converted into legal tender to deal with bills.
(In the next episode of Pawn 101: Introduction to Pawnbroking, we will tell the story of the Provident, a famous pawnshop that did not accept gold, and why.)
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