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Trouble for diamonds

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The following post should concern you even if you are not a diamond miner, which we assume most of our readers are not. Even if the only diamond you ever own is in an engagement ring, there is trouble ahead.diamond

At last year’s National Pawnbrokers Association convention, Martin Rapaport, publisher of the Rap Report guide to current diamond prices, spoke about the increasing appearance of synthetic diamonds and how difficult they are to tell from natural ones.

We are not talking only about artificial coloring of natural stones, which is impossuible to detect, but also about factory-made stones passing as dug-from-the-ground gems.

A year ago, Rapaport was saying that the problem was coming but was not yet a big problem for diamond buyers and sellers in pawn shops (and, by implication, for their customers). Well, trouble is here already.

As Bloomberg News reports, producers of natural gems are frightened enough to have, for the first time ever, formed an industry association:

 

The famously secretive diamond industry has lacked coordinated leadership since De Beers’s monopoly over the supply of gems ended after it lost a 10-year legal battle with the U.S. over price-fixing in 2004. The proposed association would represent the vast majority of the world’s diamond supply.

When we say that the value of a diamond is determined by the 4Cs (color, cut, clarity and carat-size), left unsaid is the fifth factor: rarity. Manufactured diamonds, of course, are potentially infinite in availability.

Diamonds have been made industrially since the 1950s, but the process was difficult, not too cheap and not well-suited to making gem diamonds. Technology advances.

Although a variety of factors have driven down the cost of genuine diamonds considerably (end of the deBeers control, new sources in Russia, South America and Africa outside South Africa), the cost of producing a look-alike has fallen even faster.

The Times of India reported last month that 110 manmade diamonds were discovered in a parcel in the Indian city of Surat, the world’s biggest cutting center. The undisclosed mixing of diamonds has been discovered on several occasions in the nation with India’s Gem Jewellery Export Promotion Council starting the Natural Diamond Monitoring Committee to combat the issue.

The fact that the unscrupulous traders were caught proves that it is still possible to tell the difference between manmade and natural diamonds, but is not easy, inexpensive or quick. (An artificially colored natural diamond is undetectable with current technology.)

It requires a specialized laboratory and days. At present, a retail buyer of stones, like our Maui pawn shop, cannot do the test, and the days required mean that customers are not likely to wait around for a distant lab to report. We can hope that the technology will improve and become cheaper, the way gene-splicing moved from custom work to mass production (to take one example from many). But who knows when that will come?

At present, there are not so many fake gem diamonds in circulation that pawn shops and jewelry stores are taking a big risk in making an offer for a customer’s old jewelry. But the incidence of fakes could accelerate rapidly.

Pawnbrokers have already seen how fake coins — made available in huge quantities from the world’s largest Internet scam business, Alibaba — have ruined the numismatic market for some coins, including Kingdom of Hawaii coins.

For the moment, Rapaport is sticking with the advice he gave his pawnbroker audience last year: Know who you are dealing with and stick with respectable vendors.

Addressing whether consumers should be concerned about diamond synthetics, Martin Rapaport said, “If you’re going to be buying diamonds, you better be dealing with a reputable source and that’s number one. There are a million ways for the consumer to be taken advantage of and it’s important for the consumer to buy from a reputable source even if it cost a little more.”

He also added, “Find someone you’re comfortable with and trust. Don’t feel you’re under pressure to buy. A lot of times you are under some pressure, you really want to get engaged, but I say relax and find the time to find someone that you trust. Comfort is king.”

#maui #mauiretail #mauijewelrydiamond

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.)

 

 

How pawn shops get stuff

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On the Kamaaina Loan webcast from First Friday in Wailuku, Jason Schwartz and I tried to explain how pawn shops come by the odd and fabulous things we sometimes get to put on our shelves.

I was concentrating on tools, since in January we usually have some terrific bargains. You see, wives and girlfriends buy their husbands and boyfriends tools for Christmas, but they don’t know what they need, so they end up getting them stuff they already have.

The husbands and boyfriends then sell the duplicates to us, often still in unopened packaging. So akamai toolhounds know to shop the tool store at 50 N. Market St. in the weeks after Christmas for extraspecial bargains.

But today we find an ESPN story about how a pawnshop ended up with something even rarer and more special than a new tool — a Super Bowl ring awarded to someone who wasn’t on the winning team.

It isn’t an especially happy story, since the ring’s owner had to surrender it following a personal bankruptcy, but presumably his creditors got some joy out of it.

But remember, if you need money and want to sell something to your friendly pawnbroker, you don’t have to tell us why. You do have to attest that it is your property and leave your name, address, picture and thumb print, so if you stole it, you’d be pretty stupid bringing it to a pawn shop.

But if you are a little embarrassed — personally as well as financially — we sympathize — but we don’t have to know why, Lots of people tell us anyway, but that’s a topic for another day.

See gold go UP!

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A month ago, gold was trading at $1,175 an ounce. This morning, it is a bit over $1,290.

That’s a gain of about 10%, and, no, we didn’t see that coming.

So bring us your gold, and we will buy it or lend on it, and either way, we can offer you more than we could afford to a month ago.

Will it go down 10% over the next month? We have no idea but it’s risk we have to take to keep delivering financial help with aloha to Maui people, just like during all the swings up and swings down over the past 38 years.

#mauiloan #mauigold #mauiretail

Crooked lawyers? Say it ain’t so!

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The post below is copied from my other blog, Restating the Obvious Maui, at The Maui News. For Kamaaina Loan blog, the key point to add, if you are a borrower, is that pawn loans are “non-recourse loas, which means that if you do not repay, the pawnbroker can keep your collateral, but he cannot go after any of your other goods or income. He cannot ask the courts to make you pay.

And he does not report your default to a credit reporting agency. Something to think about if you have ever had trouble repaying a loan in the past.

* * *

The NY Times has a story about the New York attorney general going after corrupt practices of buyers of bad consumer debt. If you have consumer debt, it’s worth your time (and one of your 10 monthly Times looks if you are not a subscriber) to read.

When I say “going after,” I mean candy-assed sweetheart settlements, amounting to mere hundreds of thousands in frauds that appear to total billions. And no hint of sanctions against the lawyers involved for their culpability in perpetrating frauds upon the courts.

Eric Schneiderman is no Eliot Spitzer.

But unlike mortgage foreclosure lawsuits, consumer debt collection cases often play out far from public view, consumer lawyers say, because borrowers seldom show up in court to contest the suits.
As a result, an estimated 95 percent of debt collection lawsuits result in default judgments against borrowers, an automatic victory for the debt buyers that enables them to garnishee consumers’ wages or freeze bank accounts.

That’s half true. I’ve never seen a debtor show up at Circuit Court to contest a credit card collection action. There are typically 3 to 6 in a morning session. (These are usually suits by the lender not by a buyer of bad debt.)

But I’ve seldom seen anybody show up to contest a real estate foreclosure action either, at least in the years since the Crash of ’08.

In either case, very often the borrower has left Maui long before the lender goes to court.

(Style points to the Times copy editor for getting the correct verb — to garnishee, not to garnish.)

#mauiloan #mauipawn #mauiborrow #borrow

Farewell to 2014, a ‘meh’ year for gold

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At Kamaaina Loan we look forward to 2015, because gold has got to have a better year than the one it just had.

bear1

Of course, we make loans and buy gold whether it is up or down, but like most people (bears excepted) we like the price to be up. That allows us to lend our customers more, or pay them more for their gold. They like that and we like it.

Gold started the year around $1230 an ounce. (The charts are available from Kitco.com.) In March it made a run up to $1380, but on the last day of the year it swooned, finishing at a disappointing $1182.

Well, it’s a new year and a fresh start and we wish you well and hope to see you sometime. We will deal for gold, however you want, and as always offer the best deals on the island, with aloha.

Hauoli makahiki hou!

Cliff Slater was right

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Honolulu rail transit is going to be a disaster. It is no surprise that the cost overrun is already estimated at $500 million.

Still worse, Honolulu is thinking of plundering TheBus to cover TheRail. Honolulu once had a good bus service. No longer. And raiding the modernization fund will just destroy what’s left of it.

Extending the excise tax surcharge to forever for Oahu is also under consideration.

Expect someone in the Legislature to propose extending it to the Neighbor Islands.

Note to Joe Souki: Do not allow it.

#maui

New price: $500,000,200

New price: $500,000,200

Bad for Russia, good for gold

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When asked about the direction gold will take, Big Rich always says, “It will go up, or it will go down, or it will stay the same.” Seldom does it do both so enthusiastically during one 24-hour period than it did Monday and today, however. As Bloomberg News reports:

Gold rebounded from yesterday’s biggest drop this year as investors sought a haven amid turmoil in emerging market economies and falling commodities.

Russia’s ruble plunged to a record low after the country’s largest interest-rate increase in 16 years failed to revive confidence in the currency. The Turkish lira also tumbled to an all-time low.

Your Christmas (or Hanukkah) present is you don’t have many Turkish lira. Lucky you.

(Silver did not get the same kind of love. When nervous people with money look for comfort, they don’t look to silver — usually.)

The New York Times has much more about why gold did the big turnaround. It’s the ruble. It was less than 20 years ago that Russia defaulted, bringing down Long-term Capital Management and its two Nobel prize-winning advisers who didn’t understand that things can change on a dime — or 10 kopecks.

The economic news had another victim not mentioned in the news reports: Obama haters. Remember how they were sure that Obama’s “soft power” tactics were making the United States a pitiful has-been? Well, the five countries that are subject to US (and to some extent international) economic sanctions are all on the verge of economic collapse: Russia, Iran, North Korea, Venezuela, Cuba.

It might not be a great idea to collapse countries with nuclear weapons, but the sanctions were meant to have an effect and they are having it.

As always, Kamaaina Loan is ready to buy or sell gold for you at whatever the day’s price is. We don’t care about the ruble.

#mauipawn #mauiretail

 

 

 

 

‘Getting the chair,’ but in a good way

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From Norwich, Conn., we learn of a pawnbroker who took the old advice and made lemonade from his lemons.

According to WTNH television, it began 5 years ago when Phil Pavone of A-Z Pawn bought a couple of motorized wheelchairs, expecting to resell them. They didn’t move, so he had another thought.

Kamaaina Loan blog called Pavone to get the rest of the story, with more perspective from pawnbroking operations than WTNH’s story provided:

It turns out, there’s more to creating a mobility project than taking in chairs by one door and handing them out at another. Pavone started by running newspaper ads, asking anyone with a disability to write or email him about their problem and how a chair would help.

chair

He got 60 submissions.”I heard from people who had been homebound for years. . . .  You cannot believe how many flippin’ people fall between the cracks of eligibility. It’s a disaster.”

Pavone, a cancer survivor, says he understands what it means to be sick. He went out and bought four more chairs to give away.

From there, it grew, but not without a big push from him. “The most expensive part of the whole thing was getting the word out.” He advertised heavily in newspapers and on television for two years.

Now that he is established as “the go-to guy” in his area, the chairs come in to him as donations or inexpensive purchases. The program costs him around $10,000 a year.

A team of volunteers refurbishes the chairs, which usually amounts to no more than a new battery or a charger. A battery distributor provides batteries at cost.

Then he and his volunteers match the chair to the applicant: by weight (up to 250-300 pounds; or over 300); right or left-hand controls. Occasionally, a recipient will require a tilting chair to keep legs elevated.

“It’s not a tax writeoff,” says Pavone, who has two shops, one in Florida.”It’s about looking in the frickin’ mirror and liking what you see.”

He keeps his “Gift of Mobility” campaign going year-round. Sometimes he installs a chair in his shop with a placard, asking for donations of no-longer-needed chairs.

Then, about this time of year, he advertises for more stories. (He asks and gets special rates on this advertising.) His volunteers fix up the chairs and a few days before Christmas they lend pickup trucks to deliver chairs to recipients who cannot come to A-Z Pawn.

As of Veterans Day, he had “at least 40-45 chairs” to present, and another 11 or so being spruced up and probably to be ready by donation day (around Dec. 21).

You can learn more about Gift of Mobility, with links to Youtube videos of past campaigns, here.

#mauipawn #mauiretail

 

Crazy for love, maybe?

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Mooncalf

Mooncalf

I think this guy wanted to be caught:

Police found that the suspect (in a burglary of a Black River Falls, Wis, pawn shop) cut himself on the broken glass and left blood evidence inside the store. Police collected samples of the blood and processed them as evidence, along with the pipe the suspect used to break in.

During the investigation, Black River Falls police developed information about an individual who had been involved in a domestic abuse case who fled on a bicycle outside of the City. It was believed that the same suspect, Colvin, might be involved in both incidents.

Black River Falls police worked with the Jackson County Sheriff’s Office and found Colvin at the Black River Falls Gaming Casino. Police said Colvin “was wearing a cluster of decorative rings on his fingers and had a fresh cut to his hand.” Colvin was taken into custody and medically treated for his cut hand.

And speaking of burglary, I was looking over the Maui police reports of stolen items taken in burglaries in October. (They give us the list in case someone wants to sell one, which happens but not often.)

It was a short list, which is good. But the number of items that the owner had kept a serial number for was even shorter: One.

Not all burglars are love-stricken mooncalfs who want to be punished like Shane Colvin of Black River Falls. (And that’s Shane Colvin not the singer Shawn Colvin, who in any case is a girl.) Most want to get away with your stuff, and you make their work easier and the police work harder by not recording serial numbers, and taking photographs and putting secret marks on your stuff.

Pawnbrokers do take “reported stolen” lists seriously because in many jurisdictions they take the loss if a stolen item is found in their inventory. But “two old silver coins” — which was on the Maui watch list in September — isn’t helpful.

 

#maui #mauiloan #mauigold