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More oil for your gold

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We are Kamaaina Loan and Cash For GOLD, so we are always fascinated by what gold does. Not that we have any control over it. We buy gold by the tenth of a gram; the big players trade a minimum 1,000 pounds at a time.

So we were as surprised as anyone when gold staged a rally this past week. Here’s what Bloomberg News reported:

 

Bullion jumped 4.1 percent last week for the best performance since August amid a global equity rout spurred by a stock market slump and a weakening currency in China.

Bloomber also reported that gold compared with oil is worth twice what it has been for the past generation — and that was before oil took another tumble yesterday:

 

An ounce of gold buys more than 33 barrels of oil, the most since 1988. The average ratio has been 16.

It sounds like an excellent time to bring your broken or unused jewelry, any gold coins you find behind the cushions in your sofa or any other unneeded gold you have to Kamaaina Loan and Cash for GOLD.

 

#mauigold #mauiretail

What will pawnbrokers think of next?

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A rendering of the Badlands pawn shop. We think that 's a helicopter on the roof

A rendering of the Badlands pawn shop. We think that ‘s a helicopter on the roof

On little Maui, we refer to our retail store at 96 N. Market as “our big store,” because it’s about 4 times the size of our original location at 42 N. Market (now being turned into a framing shop by another business).

Everything is relative. On the Mainland, there seems to be a trend to mega-pawnstores, in the 20,000-square-foot range. But, hey, why stop there?

That appears to be the mantra of Chuck Brennan of Sioux City, Iowa, a concert promoter whose latest promotion is “the Disneyland of pawn shops,” a $15 million, 53,000-square-foot emporium of everything that would attract a shopper in northwest Iowa — a gun range where you can fire a .50-caliber machine gun; 20 restrooms such as you would find in a luxury hotel; a foundry where gold coins will be minted; an FM radio station; a tattoo parlor; and, oh yes, a pawn shop.

The report in the Sioux City Journal does not say anything about food, aside from nickel coffee, and nothing really about the pawn shop; but we’re guessing there will be a place to chow down on local delicacies like loose meat sandwiches.

That’s loose meat, not moose meat. Crumbled ground beef cooked so that the fat runs off and served on a hamburger bun. Gourmet dining in northwest Iowa.

We have heard of pawn shops that also performed weddings, but Brennan’s Badlands Pawn Shop Gold & Jewelry is the most ambitious expansion of the basic loan emporium we have heard of, and, to tell the truth, way beyond anything we ever imagined when talking over what we could do to make Kamaaina Loan an even better place for borrowers.

Sioux City is half the size of Maui and has weather about one-tenth as attractive, but Brennan’s venture is near the intersection of two Interstate highways, so maybe it will take its place with other improbable attractions that take advantage of Interstate off-ramps, like South of the Border in South Carolina and the original In-and-out Burger in Baldwin Park, California. (OK, nitpickers, it wasn’t on an Interstate, because in 1948 there weren’t any Interstatesw, but it was strategically situated near a freeway ramp.)

 

 

Should you line up to buy silver?

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silver-coins

You might have to, according to this report from Numismatic News:

Rationing the supply of new 2014 silver American Eagle bullion coins might return if current extraordinary demand for them continues.

The real question is not whether you should wait in line but whether you should buy now. All we can say is, silver is priced much lower than it was two years ago. It has declined more rapidly than gold.

Taking the end of 2012 as a somewhat arbitrary point, silver is down by nearly half, while gold is down by less than a third. Still, either is only a bargain today if the price is not going to go much lower. Who knows?

Numismatic News attributes the latest boomlet in Silver Eagle sales to bargain-hunting spurred by low prices. The number of eagles sold in September was 4.1 million (or around $65-67 million, not a huge amount compared to what flows into mutual funds).

At our Maui pawn shop, we are agnostic about the price trend. We will sell if you want to buy, or buy if you want to sell, and take our chances on the market.

What we do promise is that we will beat any other offer on Maui. Shop around but see us last.silver-coins

#mauicoin #mauisilver #mauigold

Why make a police report?

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Here’s an unusual story from Wyoming and South Dakota which reinforces the notion that you should always make a police report when you experience a theft, even though statistics show that the vast majority of burglaries are never solved; and with sneak thefts, the clearance rate must be even smaller.

(One in 8 burglaries are cleared, according to the FBI.)

burglar

It is not unusual for someone to come into our Maui pawn shop and alert us to something that was stolen, in case someone brings it in and tries to cash in. And when we say,”‘Have you filed a police report?” very often they say, “No, it’s not worth it.”

Well, yeah, burglaries are hard crimes to solve (see link above), but without the palapala, how are we to know the item was stolen?

In the Wyoming case, the item — a World War I gas mask — was lost or stolen from a museum display back in the ’20s. In this case, if there was a police report, it has long since disappeared, but the item did have a label saying it came from the “Pennewill Collection.”

Hardly anybody has heard of the Pennewill Collection, but there’s always somebody, and he’s on the Internet.  The label was nearly as good as a serial number, and the mask was restored to the Wyoming State Museum.

Chris Johnson,  the Rapid City pawnbroker who bought the mask — almost certainly not from somebody who realized it was stolen property — said the right thing afterward:

“Any time we hear that something has been stolen, it gives us a little bit of a sinking feeling,” Johnson said. But he added that he was pleased to be able to donate it to the Cheyenne museum.

“You can’t put a price tag on giving something back to the rightful owners,” Johnson said.

The AP story does not make it clear, but apparently the museum had both a record and somebody on the staff who was aware of the theft from 90 or so years ago.

Redeeming a pawn the hard way

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So last week, we noticed a story from Nampa, Idaho, about police catching a burglar cutting through the roof of a local pawn shop. Nothing that unusual.

But now we find that he was a carefully focused burglar.  According to Kotaku website, he just wanted his Xbox back. If he didn’t have the money to redeem it, he could always have extended the loan, which no doubt would have been cheaper than what he’s going to pay now.

Why he was armed with an AR-15 is yet unexplained.

 

Class acts

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A repeated theme here at Kamaaina Loan blog has been the turnaround in the attitude toward pawn shops in the press, probably due to reality teevee more than anything else.

Over the weekend, a kind of milestone in this process occurred when the New York Times published an admiring piece about pawn shops for rich East Siders, based on a 250-year0-old English pawn shop’s first branch in Manhattan. Not only that, although the story was in the “Wealth Matters” section, far inside the bulky newsprint version of the Sunday Times, for a brief time today, the story was on the front page of the Times’ internet edition, until it was pushed off by fresh Chris Christie scandals.

Their fancy East Side store

Their fancy East Side store

Now, as a pawn shop, we are happy to have the Times look upon pawn shops as public-spirited businesses, or at least as public-spirited as the big banks the paper writes about all the time. But we do have a couple of comments.

First, the Times is about a year late on this story. Reports about pawning by the rich have been common fare on such sites as CNN for a long time now. Second, the Times may have been late, but its reporting (by Paul Sullivan) was superior:

The high-end portion of the industry is betting that with comparatively lower pawn rates and an ability to fulfill even large loan requests in a day or two, it will be able to build its business on happy repeat customers. Paul Aitken, founder and chief executive of Borro, said he attributed repeat business to the human desire to spend today without thinking about tomorrow.

“Entrepreneurial people like to do things on the spur of the moment, and they’re probably not the best planners,” he said. “When they have money in their pocket, they like to buy luxury goods. When they don’t, they like to use those goods to get money for their next venture.”

And that is how he ends up taking a Mercedes McLaren in as collateral for a loan.

That’s an aspect — we are not necessarilu endorsing it — we haven’t seen in numerous other stories about high-end pawn.

Third, high-end pawn is not, as Sullivan’s story implies, something that arose when banks tightened credit following the Panic of 2008. It’s been part of the business all along. It has probably extended its catchment area since 2008.

Our Wailuku pawn shop. We have a fish.

Our Wailuku pawn shop. We have a fish.

Fourth, while our pawn shop at 96 N. Market St. is not as flossy as Suttons & Robertsons Upper East Side shop, our Private Viewing Room is just as swank as S&R’s, what with its Chinese antiques and paneling. And — something S&R does not seem to have — its private entrance, for those rich borrowers who don’t want the neighbors to know they are pawning the McLaren. (Actually, in Hawaii law pawn shops cannot make loans on McLarens, but you get the concept.)

private

Fifth, the bottom line is, as always with pawn loans, would you rather be turned down by a banker or accepted by a pawn broker. Because pawn brokers lend on collateral, and the extra scrutiny that has scared bankers into holding onto their money means nothing to us. Gold is gold, a diamond is a diamond, a Rolex is a Rolex, whether the stock market is booming or crashing.

A ‘blue feather’ day

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At our Maui pawn shop a “blue feather day” is one when someone says, “Gee, it’s been ages since anybody brought in a nice 2-carat diamond,” and the door opens and in walks a nice 2-carat diamond.

alice

Or, as pawnbroker Stefen explains her blue feather day Thursday:

“I was working in 50 N.Market Street [where we sell golf clubs] on the new inventory system. While putting the new price tags on the golf clubs, I remarked to my co-worker Bob how nice a certain vintage set of clubs were. Bob then said that the clubs should go on eBay because it was gonna take a special person to buy those clubs because of their age.

“I noticed how nice the wood clubs were and said that they were the type of clubs Alice Cooper would appreciate since he’s bought vintage clubs from us before. Bob agreed and said that he thought Alice would like them as well, or maybe some kind of sporting club that could put them on display. After that, I went about finishing tagging the rest of the golf clubs and left to go do more work in another room.

“Not an hour later did Bob call me in the room I was working to tell me that Alice Cooper had just come in and bought those Vintage Clubs! I said ‘No way,’ but Bob told me that he had told Alice Cooper about the conversation we had just had about him and the clubs and Alice said, ‘They’re mine now.’ Both of us couldn’t believe that Alice Cooper had just come in and bought those clubs within an hour of us saying he should have them. What a coincidence huh?”

Big Rich picks up the story. “Alice Cooper visits the store from time to time, and he has bought things, not only clubs, before; but he doesn’t come in every week or every month.”

The clubs, a set of three woods in beautiful condition, had been around for a while (nobody remembers exactly how long) and had just been put out on retail display. “It’s like those clubs were calling, ‘Alice, Alice Cooper. Come by Kamaaina Loan, come by Kamaaina Loan.’ “

Rich adds, “You better believe we gave him a great price.”

Alice, of course, is a huge golf fan and even titled his autobiography, “Alice Cooper, Golf Monster.”

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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 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.

Who is a pawnbroker?

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As this editorial from the Wheeling Intelligencer demonstrates, pawnshops and other dealers in secondhand goods sometimes have to surmount poorly conceived local regulations.

In most places, including Hawaii, there are separate legal codes for pawnbrokers (whose primary business is lending but who buy and sell used merchandise) and pure secondhand dealers, who do not make loans. In a few places, like Florida, there are more than two sets of regulations, as secondhand dealers are further subdivided.

Not in Moundsville, West Virginia, though.

Pierson took his concerns about the ordinance to council last month. He explained his store is not a pawn shop. He merely buys and resells merchandise. He does not provide loans with items brought into the store held as collateral. Most reasonable people would agree Pierson is not operating a pawn shop.

But city officials have said Pierson is required to fill out pawn cards for any valuable items he buys, then hold the merchandise for 10 days before selling it. Police Chief Tom Mitchell explained requiring documentation and a delay in sale can help his department track stolen goods.

This appears to be nothing more than 1) poorly drafted legislation in a hick town; and 2) casual perhaps biased enforcement.

One of the continuing beefs at our Maui pawn shop is that enforcement of secondhand dealer laws is spotty to non-existent. Kamaaina Loan is registered as both a pawn shop and a secondhand dealer.

Following the two sets of rules is not extra burdensome. The same sorts of recordkeeping are required for both kinds of deals, and the difference is the holding period.

For purchases, our business is required to hold merchandise for 15 days before reselling. Pawned items have to be held 60 days, and if not redeemed by the borrower by then, can be sold.

And since Kamaaina Loan, as a pawn shop, makes daily electronic reports to police, the authorities can monitor both kinds of transactions at the same time. Secondhand dealers are regulated in theory but in practice with swap meets, Internet classified lists and other avenues for disposing of used goods, secondhand dealing is hardly supervised at all.