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Big cat fight on Maui

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There’s a hot cat fight going on here on Maui. But ours is just the local edition of a cat fight that is making fur fly all across the country.

Thrill killers?

Thrill killers?

You may have been following the controversy about the Maui Humane Society, its departing executive director and the strident campaign of cat (but not bird) lovers to introduce a “no-kill” policy at the society, which gets most of its money through a county animal control contract. There’s more here (though behind The Maui News paywall).

And still more here about the situation in New York City, just to show we are not alone..

In theory, cats can be controlled by having cat lovers capture and spay or neuter feral cats, then return them to their happy hunting grounds, feeding and watering them, until they die of old age. Problem solved.

This is not how it works in real life. There was a cat colony at Iao Valley State Park, and a few years ago if you went up there after dark and shined your headlights into the forest, you would see hundreds of cats’ eyes looking back at you. During the day, scores of cats patroled the parking lot.

You cannot go into the park after dark any more, so the spooky cat crowd is not on display; and the last time I was at the parking lot it was not overrun with cats. I don’t know if that means the cat colony has diminished, but I doubt it has.

Colonies of Jackson’s chameleons, nene and pueo do die out. Cat colonies and cattle egrets, hardly ever. Usually, it seems that people who are dropping off their unwanted cats (instead of drowning them, which was customary in bygone times) look for existing cat colonies, presumably so their cat will have company and three squares a day.

On Maui, there is the issue of ground-nesting birds, especially seabirds. Some of these are endangered. All of them are slaughtered by cats. Few seabirds even try to nest on the island, and when they do they are usually mauled.

Even well-fed cats will hunt and kill for pleasure.

The upside of this is that without our thousands of blood-crazed cats, there would be even more feral chickens everywhere.

 

#maui cats #feral cats #no-kill #maui

 

 

Seedy maybe, but not dark

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Reporters who show no interest in the millions of ordinary working people who patronize the nation’s 13,000 pawnshops are endlessly fascinated by the small number of threadbare millionaires who — when down to their last Patek Philippe — do the same.

Few show much evidence of ever having visited a pawn shop themselves.

Kamaaina Loan -- neither dark nor seedy

Kamaaina Loan — neither dark nor seedy

Take, for example, a story that got nationwide exposure yesterday on National Public Radio.

Ashley Milne-Tyte — sounds rather posh, doesn’t she? — of the Planet Money team did a segment about a “new” (not really) sort of pawn shop that caters to the well-off. These shops are not, she said, “dark and seedy” like other pawnshops that deal with the “desperate.”

While traveling around the country, I stop in pawnshops of all sorts. Some are really gun shops that do a little loan business, others are really jewelry shops that take in a small amount of household goods. Others are primarily second-hand goods stores that will buy a gold ring or two.

Most are like Kamaaina Loan, full service lender/traders whose customers are primarily working people. They may need to even out their cash flow (especially if they work on a tourist island where many jobs are intermittent or subject to wide swings in income) but are hardly desperate.

Some pawn shops I have visited are definitely seedy. These tend to be on the outskirts of town, in areas of low-paid work, cheek by jowl with mobile home sales lots, dealers in not-too-new used cars, second-hand furniture stores and apartments and houses that have not been repainted since the Reagan administration. The people they deal with seldom acquire high-quality merchandise in the first place, and what they have to offer for a pawn loan will not impress the likes of Ashley Milne-Tyte.

But dark? Never dark.

#maui #maui gold

The risk the pawnbroker takes

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All lenders take a risk,  but pawnbrokers live with an unquantifiable risk that most other lenders do not have to worry about: the possibility that gold will crash.

We have written often about how our

Some of Kamaaina Loan's gold inventory.

Some of Kamaaina Loan’s gold inventory.

Maui pawn shop is at the mercy of the world gold market on the Kamaaina Loan blog. Today, the lesson is driven home in an example from England: Albemarle & Bond, a chain with 180 locations, was caught holding a lot of gold when the price started falling last year. Now it’s bankrupt.

Albemarle’s situation was partly of its own creation. According to earlier news reports, it chose to hold gold.

Kamaaina Loan’s situation is different in important respects. First, we are not a stock company. The stock market can act with  brutal swiftness when it perceives that a company has bet wrong. While gold is down about a third from its recent peak, Albemarle & Bond’s stock went down 97%.

Second, we do not hold a lot of gold. We have some in inventory as jewelry at our retail store at 96 N. Market St. And we have quite a lot  being held as collateral for loans at our pawn shop at 52 North Market Street.

State law requires us to hold pledges for 60 days. Right now (according to the historical charts at Kitco.com), gold we lent against 60 days ago is worth a little more than it was then: $1310 an ounce this morning compared with $1260 then.

Over the past six months, the net change in gold has been almost 0, although there have been many ups and downs in between.

We prefer that our customers redeem their gold pawns, as most do. First, a redeeming customer is probably a satisfied customer who might want to do another loan someday. Second, if we have to take over the collateral, there are overhead expenses, so even if gold has gone up a few  bucks, we might not cover our costs by selling. And if gold goes down over 60 days, we for sure cannot cover our expenses.

Over the long haul, the best way to play the world gold market is not to try to beat it but to go with the flow: Sell gold as it comes in and live with the ups and downs. As we understand it, that is not what Albemarle did. They held gold when they didn’t have to and got  burned.

Pawnbrokers in India, who are even more tied to gold than even American pawnbrokers, apparently are caught in the Albemarle trap, too.

It’s great when gold goes up. Everybody feels happy, and those who are holding “physical gold” as the speculators like to call it make windfall profits. If that sounds like the real estate business in the early 2000s, that’s because the situation is parallel.

Leverage works just as much in down markets as in up markets, though.

 

Presidential diamonds

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At Kamaaina Loan, we like to say we never know what will come over the counter next. But we have never had a First Lady’s diamond tiara yet. The famous Rick Harrison at Gold and Silver Pawn has beaten us to it.

Mrs. McKinley wearing tiara (Photo from Akron Beacon Journal)

Mrs. McKinley wearing tiara
(Photo from Akron Beacon Journal)

The TV pawn superstar obtained a diamond tiara once worn by the wife of President McKinley.

He has offered to sell it at his price, $43,000, to the McKinley Museum in Ohio. Presidential museums and libraries are not tax-supported but depend on donations by (usually) supporters who backed the man in office.

That’s why money is being raised for a Barack Obama library — with Hawaii and Chicago expected to compete for the location — right now. But it is only in fairly recent times that  big political money has flowed into presidential libraries. There is nobody around now who backed McKinley, who was shot in 1900.

So the Ohio museum seems a bit dubious about whether it can come up with the $43,000.

Gold: S.O.S.

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There’s a reader forum at the Kitco.com website where followers can discuss Kamaaina Loan’s second favorite subject, the price of gold. (The favorite is our customers.)

Even Kitco describes the recent behavior of the world gold price as “carnage.” The New York market is about to close as this is written, and it looks as if today’s price will be $90 an ounce under where it was (briefly) just two weeks ago.

So the forum asked the S.O.S. question, are the followers going to Stay with gold Or Sell? The unanimous answers were STAY.

In a way, that’s bad news for our Maui pawn shop. If nobody sells gold, what will we do?

Well, we could lend money on gold, and we do that, but sellers are an important part of our business.

Oh. Not only are most of the Kitco Kommenters staying, most are planning to buy more gold! That’s a relief. We sell gold, too.

Thank goodness somebody is buying this stuff

Thank goodness somebody is buying this stuff

 

Kitco is mentioned  because it publishes a moment-by-moment price statement on the Internet, very convenient for pawnbrokers, who need a daily fix of gold info.

Like a deer in the headlights

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Iraq has purchased 1.1 million — yes, MILLION — ounces of gold, according to Kitco.

Some of Kamaaina Loan's gold inventory.

Some of Kamaaina Loan’s gold inventory.

Analysts speculate that this quiet buying helped support the world gold price recently. Shucks, we thought it was because the world was afraid Vladimir Putin was starting World War III.

In any event, if Putin spooked the market, that’s over. Gold was back down to $1312 in New York today. It had nudged up to $1380, which was $100 an ounce higher than at the beginning of the year.

That’s a gain of nearly 8%. All gone now.

Here at Kamaaina Loan, we feel like we imagine a deer feels in the headlights — transfixed but helpless to do anything about it. For our Maui pawn shop, transactions in fractions of ounces are our bread and butter. A  purchase or sale of 10 ounces would be a red letter day.

We, of course, like to see the price of gold go up. We have a sizable amount of gold in our jewelry store at 98 North Market St., so rising prices make that more valuable. Even more important, if gold goes up, we can lend our pawn customers more, earning more interest for us.

If the smart money is right, though, the trend is not in our favor. Goldman Sachs and Societe General, big playas, are looking for an average 2014 price as low as $1225. Bloomberg News reports:

Bullion, which slid last year by the most since 1981 as some investors lost faith in the metal as a store of value, rebounded 9 percent in 2014 as the global expansion faltered and tensions escalated in Ukraine. Those bullish influences are “transient,” and the U.S. economy will recover from a weather-driven slowdown, pushing gold lower, Goldman’s Jeffrey Currie reiterated in a March 20 report.

Since the year is already almost one quarter over, it will take a 6+% decline just to get to $1225. To get to an average of $1225, the bottom price would have to go lower still.

What can we tell you? If you want to sell or pawn your gold jewelry sometime this year, Goldman Sachs thinks you should do it now rather than later.

We have no idea.

What are we waiting for?

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There was a bill in the Hawaii Legislature this year that would have mandated electronic reporting of pawnshop transactions to police. At present, it is optional. There were a number of questions ab out how it would work in practice and the bill was deferred.

Electronic reporting at Kamaaina Loan is more advanced than this

Electronic reporting at Kamaaina Loan is more advanced than this

Instead the Department of Commerce and Consumer Affairs will form a working group to report to the 2016 Legislature. So far, so good.

One of the issues is the “hold period” for purchased or pawned items. The rationale behind a hold is that it gives citizens or police a chance to check dealers to see if they have received stolen items.

(Yes, from time to time citizens come by with circulars describing items they have lost in  burglaries, usually readily identifiable jewelry. Not often, but sometimes, there’s a match.)

In Maui County, the hold period for licensed secondhand dealers, like Kamaaina Loan, is 15 days. For pawns, 60 days. In theory, most people dealing in buying and selling secondhand goods ought to be licensed, but we don’t think most are. Inspections are lax to nil, except pawnshops, which are more closely regulated.

In other Hawaii counties, hold periods vary within the 15- to 60-day framework. But on the Mainland it can get much more complicated. How complicated, you ask?

The Brockton, Massachusetts, area may hold the record. Each community sets it own standard, ranging from no hold at all, to 10, 14, 21, 30 or (in a proposal in one community) 60 days.

burglar

While the amateur burglars may not keep that straight, it seems likely that the professionals know which towns have the least regulation.

 

Yes, we are regulated, duh

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It seems the Michigan State Police raided a “pawnshop,”  and now the “pawnshop’s” “customers” are

  wondering if they will ever be able to buy their items back.

Aside from the evident confusion of the Fox reporter — pawn customers do not “buy back” their collateral, they repay a loan and redeem it — this story does raise some questions. The “pawnshop” was (allegedly) operating without a permit. That means, we suppose, that the “customers” were without the protections that regulations provide for real “customers” of real “pawnshops.”

Just hanging out a sign doesn’t make you a pawnbroker, any more than  hanging out a shingle makes you a lawyer or a doctor.

The story does not say low long the “pawnshop” operated without a permit, or whether it had any sort of business license at all. In other words, was this a totally fly-by-night operation, or was it an example of a (more or less) legitimate business that crossed the line into pawnbroking unintentionally?

 

We have been around long enough for our guardfish to get huge

We have been around long enough for our guardfish to get huge

Generally speaking, you shouldn’t have to check the Business Registration division of the Department of Commerce and Consumer Affairs (in Hawaii, or whatever the equivalent is in Michigan) before doing business; although maybe that wouldn’t be such a bad idea. Our Maui pawn shop has  been in business at the same location for decades, so you can assume — and you would be correct — that it has its proper licenses and is supervised by (among others) the Maui Police Department.

A pop-up shop that hasn’t been around for long, all assumptions are chancy.

Before you pledge your wedding ring — we will assume here that it has both sentimental value and precious metal value, and the sentimental value might be higher than the gold value — maybe you should check DCCA for complaints. Just because a pawnshop has a license doesn’t mean it also has a good record of complying with the mandatedc hold perios (15 days on purchases, 60 days on pawns). We know of a local pawnshop (not ours) that has been sued — more than once — because a customer went back to redeem a pledge and discovered that it had been sent to the smelters.

Pawnshopsa are not the only businesses where people leave  valuable property and expect it will be there later when they want it — banks, escrow companies, stockbrokers, property managers  and storage companies come to mind in this respect. Think Bernie Madoff.

The adage, know who you are dealing with, applies across the board.

Pawning and banking in China

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On the same day that The Maui News reported that China opened bidding for the first five private banks in the country, online news source Quartz reported on the  boom in pawn shops there.

China is considered the birthplace of the pawn business, maybe 3,000 years ago, but the Communists suppressed pawnbrokers and today there are only about 7,000 pawnshops, half as many as in the United States.

Do I look like a teddy bear?

Do I look like a teddy bear?

But as Quartz reporter Nona Tepper explains, an American pawn shop is about as different from a Chinese pawn shop as a teddy bear from a panda bear.

While our Maui pawn shop, like most of the 13,000 others in the Unitd States, deals in gold chains and TVs and lends a couple hundred dollars or less to most customers, in China pawnshops deal in astronomically priced apartments and serve to finance business. That’s because China’s state-run banking sector is famously dysfunctional.

At Huaxia, apartments are the most commonly pawned item, luxury vehicles the second, and jade, expensive stones and watches make a close third. Compared to America, where individuals pawning jewelry and electronics worth about $150 are brokers’ most common customers, Huaxia looks more like a luxury department store gleaming with Cartier and rare jade statues.

Huaxiz upscale Peking pawn shop (from Quartz news story)

Huaxia upscale Peking pawn shop
(from Quartz news story)

Tepper then goes into some commentary on China’s “shadow banking” business. In the absence of established markets for commercial paper or most of the other numerous sources of business capital in the western world, especially short-term capital, businesses raise money on personal assets – largely residential real estate that is widely viewed (from outside China, anyway) as a bubble.

Should the long-expected crash in apartments come, the effects on China’s businesses would likely be disastrous.

American small business owners occasionally pawn Rolexes to meet a payroll, but this is not a way of life like it has become for China’s small (and not so small) businesses.

“There’s certain risks in regards to the shadow banking industry,” said Ismael Pili, head of financial analytics Asia at Macquarie Group. “1) It’s not well regulated, 2) There’s still opacity with regards to what’s going on and 3) It’s become a sizable portion of the economy.”

So the spirit of unregulated borrowing and lending continues. Today, shadow lending is the fastest-growing part of China’s financial sector, and JP Morgan Chase estimated that it accounted for 69% of China’s GDP—or 36 trillion yuan ($5.9 trillion)—in 2012.

Pawn shop treasure: Peace out

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In a sense, this is old news, but a Nobel Peace Prize discovered in a pawn shop is headed for auction in, of all places, Baltimore.

Identified as the Peace Prize, this medal is actually a Pulitzer Prize

Identified as the Peace Prize, this medal is actually a Pulitzer Prize

Old news, because the pawn shop discovery was made 20 years ago, when an alert collector recognized the hefty medal (nearly half a pound of 23-karat gold) in a pawn shop in some unspecified place. Presumably Argentina, where the medal was awarded to the foreign minister for helping to bring to a conclusion the Chaco War, a war fought over what turned out to be no oil.

You never can tell what will come into your pawn shop. From the story, it appears the pawnbroker may not have known it was a Peace Prize medal but knew enough not to melt it for the gold. At today’s prices (way up by the way, thank you Vladimir Putin), the metal is worth around $10,000.

As a collector’s item, the presale estimate is $50,000. That’s why at Kamaaina Loan, we say we will give you the highest amount based on either the metal weight, the artistic value or the collectible value.