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Look who’s pointing fingers

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An ad on my Facebook page alerted me to a film coming out this summer to be called “Spent: Looking for Change.” It is said to be about the 70,000,000 Americans who are “underserved” by the regular financial system.

Now, Kamaaina Loan blog has often considered the unbanked and underbanked. Pawnshops are prominent among the “alternative financial institutions” who do serve the unbanked. No credit? Bad credit? No problem, as long as you have an asset to pledge.

It is clear from the “Spent” trailer that the film — posing as a documentary but actually a long commercial — will be a hit job on, among others, pawn shops.

Are pawn loans expensive? Compared to what? If you can borrow a million dollars, you can probably get it for 4%. If you want to borrow $160 (an average pawn loan), you will pay 20% in Hawaii, less in some other states; although where the rates are lower, fees are usually allowed. In Hawaii fees are not allowed.

Let’s say you need that $160 to pay your electric bill. Borrow on pawn and it will cost you $32. Borrow from the utility — by waiting until next month — and you will probably pay even more than $32 in late fees, plus maybe get a bad mark against your credit.

We wouldn’t recommend anybody take out a pawn loan every month to pay electric bills; but once in a while, when the bills outstrip the household budget, it might be the cheapest, most prudent alternative.

Now let’s get down to the nitty-gritty. Who is paying for “Spent”?

American Express.

Yes, one of the giants of banking that is not serving those 70,000,000.

Why? According to ABC News:

“Spent” will premiere this summer and is sponsored by American Express. The company currently offers two alternative financial products for the financially underserved, in their “Serve” and “Bluebird” prepaid debit cards.

Not really an alternative for the typical pawn customer sketched above, who, if he cannot pay his electric dill also cannot buy any prepaid debit cards.

 

 

 

 

 

 

 

Do we have too much aloha?

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The short answer is no. But a story at the National Pawnbrokers Association website got us to thinking about our experiences with reality television.

We have been approached four times by producers, and have done a “sizzle,” which is a short, hot pitch to be shopped around. Well, we are still sitting at the counter of Schraft’s, sipping on a malted and waiting to be discovered.

Our little Maui pawn shop is not alone.

Nancy Cejudo, the woman owner of Ben’s Pawn (yeah, Ben; she bought the business from a man), also had a look-see with a producer and, like Kamaaina Loan, was left waiting at the altar.

In an interview for the NPA blog, she declared the producer (also a woman) told her:

 “She’s just too nice.”

Not the worst kind of rejection note, but a rejection all the same.

The producer told her:

 

“Reality TV will continue to be exactly what it is. Some shows will be more compassionate than others.”

Probablky the best way to get picked would be to act like Jerry Springer and throw chairs, but we don’t plan on doing that. Farewell fame. It was nice to meet ya.

Just as well, maybe. The other day, we were looking at a reality TV fan site (www.tv.com) and reading the fan (if that’s the right word) comments on Hardcore Pawn. Now, we know the Hardcore Pawn folks and they are as nice as could be. All the nastiness on the tube is an act.

Some watchers don’t get it, which, we guess, the producers and advertisers count on. Anyhow, if this is what it would mean to get on the tube, maybe we’ll pass:

Ashley u r the worst person on the planet you rank right next to Satan that’s how evil you r

Next to Satan? Man, that’s harsh. The rest of the comments are just about as cruel. And, they don’t speak very well for the schools the Hardcore Pawn audience went to.

Greet each customer with a smile

Greet each customer with a smile

Is gold looking up?

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Some people think so. From Bloomberg News:

Coutts & Co. is adding gold for investors as rising wealth in China and increasing political risks including in Ukraine spur demand, helping prices rally from the biggest annual decline in more than three decades.

And:

Gold is getting more attractive to hedge-fund managers even as Goldman Sachs Group Inc. says the metal’s surprising rally this year will soon fizzle.

Hedge funds and other speculators expanded bets on higher prices for a fourth week in New York futures and are now the most bullish since December 2012, government data show. While gold is off to its best start in six years after topping $1,350 an ounce, Goldman’s Jeffrey Currie says chances are increasing that prices will slump to $1,000 for the first time since 2009.

As Kamaaina Loan blog has noted many times, Goldman predicted a sharp drop in the price of gold in 2014. So far, Goldman has been wrong but they are not admitting it yet. $1,000 gold would be close to half the highest price from last year.

 

Gold taking a breather?

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We have been fascinated by the steady rise in the world price of gold, because we listened to the smart money (at Goldman Sachs etc.) that was predicting a fall in 2014.

Well, today, gold pulled back a little, but according to Kitco news, only because some holders were cashing in their profits from a 4-month-long rally:

Gold prices ended the U.S. day session moderately lower Wednesday, pressured on profit taking and chart consolidation following recent gains that saw prices hit a four-month high overnight.

#maui #mauigold #mauiretail

Gold offered for sale on Maui

Gold offered for sale on Maui

Pawn shop with ferris wheel

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Loved this headline from the Broward/Palm Beach New Times:

 

Pawn Shop Opens March 6 With Ferris Wheel, School Bus, and So Much More

Was totally bummed to find out that the “pawn shop” is just a disco club called “The Pawn Shop.”

On the other hand, gold climbed past $1,340 today, continuing to confound the seers who predicted falling prices for precious metals.

#maui #maui pawn

Hey, wassup? Silver and gold. that’s what

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It’s kinda puzzling. The Dow is up sharply, which usually has a depressing effect on metals. But gold is up, too. It was  briefly over $1,337 an ounce today. Silver, too. It got over $22 for the first time in a long while before slipping all the way down to $21.99.

Nowhere near the $1800 and $38 of a couple years ago,  but the trend is up not down.

Not only do we at our Maui pawn shop not pretend to understand what moves gold and silver prices, we find stock prices puzzling, too. Especially stocks in pawnshops.

Most of America’s 12,000 or so pawn shops are quite small, but there are a few  big chains.  Big  being relative compared to banks. Even local banks often have assets over a billion dollars. Pawn chains are not that size.

One of the ” big” ones is EZ Pawn, which reported an 8% gain in same-store sales over the holidays. The stock bounced up by 27%. How very nice for them, but hard to understand since “The company’s profit and sales actually fell during the quarter, by 27% and 1%, respectively.”

Profit down 27%, stock up 27%. It must make sense to somebody.

Bring us your old surfboard. We know how to value that.

 

 

Keeping up with ‘Pawn Stars’

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First, according to formerly famous Alec Baldwin in his last interview in New York magazine, the autograph is dead. Not so, Alec, as we learn from this piece on “Pawn Stars” from the Ceres Courier.

(Ceres is near Turlock in case you haven’t ever been there.)

After indoor taping ended, Sarah and I were escorted to the Old Man’s office as Rick chatted in the hallway. He signed an autograph with few words and posed for a photo.

The rest of the piece is about a newspaper editor’s bid to get on the show. Did you know “Pawn Stars” is numero uno in Argentina?

We didn’t either.

The pawn business is almost universal.

Maybe we’re prejudiced, but we’d rather keep up with the Harrisons than the Kardashians.

Jeff and Sarah with Rick (Ceres Courier photo)

Jeff and Sarah with Rick
(Ceres Courier photo)

What in the world is gold doing?

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First, our regular disclaimer whenever we blog about gold and silver prices: We have no idea what the trends will be. At our Maui pawn shop, we buy and sell metal every day but we are completely at the mercy of the world price.

Each day, when we open the computer to see where gold went, it is a surprise.

That said, we read the opinions of those who do claim to be trendspotters with interest. Late last year, the smart guys on Wall Street were pretty much agreed that gold would drop during 2014, probably to a price near $1,200 an ounce.

For a while, they looked like soothsayers. On Dec. 30, the price dropped below $1,200 for the first time in a long time.

So what did the world say to the smart guys? So far, it’s been a big Bronx cheer. Gold is up well over 10% even after taking a bit of a dip today.

Of course, most of 2014 is yet to come and maybe gold will start dropping in a big way.  There’s a scary report from the International Monetary Fund (summarized at Bloomberg News) warning about deflation, especially in Europe and emerging markets.

Deflation is generally bad for gold, as when you make fiat money (dollars, money that is money because the government says it is and everybody agrees to go along) more valuable, metal becomes less valuable. In fact, deflation is generally bad for everybody because it becomes harder for everybody to pay their bills.

Very low inflation, “if below target for an extended period, could de-anchor longer-term inflation expectations,” the IMF economists wrote. It “also complicates the task in the periphery where the real burden of both public and private debt would rise as real interest rates increased,” they said.

Translated, this gobbledegook means that inflation, which is good, or, at least, essential to a modern economy, has been tamed all too well and if luck is not with us, we could experience another crisis like we had in 2009.

Of course, some people think the IMF has been prescribing bad medicine since, oh, forever; and it would be a good thing to ignore those guys.

 

 

Bad press for pawn

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So, at Kamaaina Loan blog, we are quick to pass on just  about any news item that untarnishes (is that a word?) the widespread image of pawn shops as sleazy, predatory businesses. Fair’s fair.

Sometimes the old image crops up Paul Bunyan-size, as it just did in Flint, Michigan, where a pawn shop planning to deal in auto titles was denied a special use permit. (Pawning cars is not allowed in Hawaii; laws vary across the nation.)

liberty bell

 

The decision by the Flint Planning Commission was unconstitutional, a point we will expand on later, but first let’s look at some of the objections to the Cash for Keys pawn shop.

A preacher said,

“I’m against pawnbrokers and pawn shops,” said the Rev. Allen Gilbert. “I want to know: Who are they? Where did they come from? Is there anything in their background (that would be) a major concern?”

A citizen said:

South Flint resident Barbara Griffith Wilson said the proposed Cash for Keys Pawnbrokers would be another business that doesn’t help the neighborhood its in.
“We have an overflow of pawn shops and (gentlemen’s clubs),” Griffth Wilson said. “We should take a real microscopic look” at this business.
And while the comments on the All Michigan news site cannot have influenced the commission, they were as negative as could be:
They are businesses that the majority of their customer base is convicted felons. You’ve got to be a little shady to run one.
and

Pawn shops encourage criminal activity and cater to the desperate. It’d be nice to see them go. Most use them as a way to get quick cash after ripping someone off.

We need not go into the inconvenient facts, except to say that most pawn shop customers are not convicted felons. But quite likely some members of the commission think so, too.
Should the applicant have the resources to challenge the decision, she’ll win. Although we have not seen the contents of the decision and order of the commission, most of the testimony as reported by All Michigan was not germane. So what if the area has a lot of strip clubs? A pawn shop is not a strip club.
More to the point, there has to be a rational nexus between the action of any government body and the facts on the ground. Vague suspicions like those held by Rev. Gilbert don’t meet the test. Unless the applicant has a criminal record, character doesn’ count either.
Some places deny pawn licenses to convicted felons but most don’t. Even if an applicant was an ax murderer, the conviction might not rise to the level needed. If, however, she had been convicted to auto theft, that could be a rational reason to at least question her qualifications.
But, since she had operated a used car lot on the same site until recently, it seems unlikely she was boosting hot cars.
And there lies the real rational nexus. The application proposed to replace a used car operation with another used car operation. The financing of the deals would change, but not the use.
Pretty generally, equal protection of the laws don’t allow governments to discriminate on that basis. You cannot allow a Ford dealer on a lot but disallow a Toyota dealer because (for example), Toyota is a foreign company.
So it looks like we have an out-of-control planning commission in Flint. One wonders what the corporation counsel was doing. Nothing would be our guess.

To catch a thief — or several

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We have surveillance cameras at our Maui pawn shop, but we DO NOT do what Portland pawnbroker Mike Fink does:

Fink, who owns Guitar Grave, has been posting YouTube videos of customers who are trying to sell stolen items or have stolen from him.

Read more: http://www.wmtw.com/news/pawn-shop-owners-videos-help-police-fight-crime/24353626#ixzz2t8hddQU8

He does more than that. He posts videos from his shop about anything that strikes him as funny, and he is a humorous man. Some are what you might expect — stoners; but others are just Portlandians who seem to hear a different, more uncertain trumpet. You can watch a bunch of them by going here.

Portland Press-Herald photo

Portland Press-Herald photo

Fink also marries people. This is not that unusual. A number of pawnshops (but not Kamaaina Loan) will tie your knot. We have not watched all his  videos yet,  but our favorite so far is “A Very Guitar Grave Wedding.” The bride, Nikki Rae, who seems to be having a very good time, says, a few minutes after Fink ties the knot, “I want to be on top.”

For some reason a local radio reporter walked in during the ceremony and recorded it. It must have made for curious radio. He ended up being the witness for the marriage, too.

Guitar Grave is not the most obvious name for a pawnshop, but there’s a story behind that, too.

Fink says he started out selling games and was looking for a name. Marketing advice said to find something alliterative, so he started searching the database of available names for Game G-something.

Among the choices was Grave, and he picked that because it was the only one that his son, who was then 7, could spell.

Later, an employee persuaded him to expand into collectible guitars, and Guitar Grave was born.

Really, Kamaaina Loan (Hawaiian for “child of the land,” meaning native-born or, loosely, old-timer) seems pallid by comparison.  And nobody but a kamaaina can spell it.