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Who do you trust?

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One cool thing about being in the pawn business is that we can (usually) make money on gold whether its price is up or down. That’s because we both buy and sell and depend on the commission for profit, not the fluctuation.

That is not the case with most individuals. Probably most buy gold as jewelry, so the variation in price doesn’t matter much to them anyway. But for those who buy gold as an investment, it certainly makes a difference when to hold ’em and when to fold ’em.

For example, right now the price of an ounce of gold is about $1,314. Goldman Sachs thinks the price will be down close to $1,000 by the end of next year; but there’s an alternative opinion. Bloomberg News describes the views of  Peter Schiff, a well-known gold bug. He thinks gold is going to $2,000, and soon.

So, take your pick, $1,000 or $2,000. The story quotes Ben Bernanke:

“Nobody really understands gold prices and I don’t pretend to really understand them either.”

Neither do we.

We will buy your gold or silver jewelry, coins, ingots, dust any time, for the daily New York spot, minus a small commission. Or we will sell you jewelry, coins or ingots (sorry, gold dust not usually in stock), for the New York spot plus a small commission.

We will beat any other written offer you can find on Maui, too.

A reliable form of Maui gold

A reliable form of Maui gold

 

Two colorful pawn shops

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These two pawn shops, one in Maine and one in Florida, make our little Maui pawn shop seem kind of — how to say? — drab?

Pawn shop in Maine

Pawn shop in Maine

 

The photo of the Florida shop does not show quite how colorful the shop is. Even the palm trees are painted green, yellow and blue.

 

Even if we wanted to paint our Wailuku pawn shop this way, we don’t have the wall space to do it.

Pawn shop in Florida

Pawn shop in Florida

Too little to borrow

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Kamaaina Loan blog has linked to many newspaper or television stories about the new status of pawning. Here is an unusually detailed report in the Chattanooga Times Free Press.

Business reporter Ellis Smith did something we haven’t seen before. Although we have often noted that banks won’t lend you a hundred bucks — something our Maui pawn shop will be happy to do — Smith made the effort to ask his local bankers just how small a loan they would consider:

First Tennessee, the largest bank by deposits in Chattanooga, doesn’t lend less than $2,500, “and we don’t make money until we get way over that,” said Keith Sanford, market president for the bank. “Even at that level, we try to steer them toward a credit card.”

SunTrust has an option on its website for unsecured loans, but it also requires a credit check, and the minimum loan amount is $3,000.

Of course, Kamaaina Loan doesn’t make unsecured loans either. We need something to pawn — gold ring, power tool, guitar. Something.

But we don’t care what your credit rating is, or even if you have a credit rating.

Guns in a Chattanooga pawn shop

Guns in a Chattanooga pawn shop

 

Other differences between our Maui pawn shop and the pawnbrokers in Tennessee: By law, in Hawaii we cannot lend on autos.  Pawnshops can lend on titles in Tennessee. We don’t do firearms. As far as we know, only one pawnshop in Hawaii has the federal firearms license required to do  pawn loan.

It’s on Oahu and is primarily a gun shop that makes loans as an additional business service.

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

 

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.