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.

 

Banks abandon the average Joe

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I cannot say I think much of this New York Times Dealbook story about changes in the pawn business.

It seems to be based on the novelty, to the reporter, that some pawnbrokers are offering platinum debit cards.

Of interest, though, is the statement that

banks zero in on more affluent customers who promise twice the revenue of their lower-income counterparts, close branches in poor areas and remain stingy with credit

This is news only to the New York Times and is incorrect to boot. Banks have been looking for ways to stop serving half their customers for a generation, ever since it dawned on them that 50% of their clients account for 150% of their profits. In other words, banks not only don’t make small profits out of Joe Sixpack, they make losses.

Were it not for government oversight, you would not find a bank branch anywhere on the poor side of town, and you will not find many.

It is entirely understandable why banks would want to behave this way but not very nice. When they say, we want to be your bank, they don’t really mean it.

Meanwhile, pawn shops keep on serving all comers, as they have for centuries.

Note also this statement:

EZCorp, a publicly traded operator of pawnshops, reported that total loan balances swelled 22 percent to $44 million in its most recent quarter.

EZCorp is big for a pawn business, but $44 million is unnoticeable in the context of commercial banking. In other words, EZCorp is there for the little guy.

 

 

Bye-bye Blackie

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The piece below about Blackie Gadarian ran in The Maui News. There was much more of Blackie that could have been said. He was, for example, one of very few people who owned a recreational tugboat:

In a world of pussyfooters, Blackie Gadarian walked in hobnailed boots. They were disguised as black Keds, part of his invariable costume of orange shirt and black trousers.

Blackie said what he thought, whether the subject was cheapskates, jazz music, traffic, ignorant tourists or the value of a college education.

Not that Blackie downplayed education or college; he was a well-traveled, well-read read man. But he considered, and proved in his own long life, that you could do very well without going to college. Each year, he and his wife Sara presented $500 grants to Lahainaluna School graduates who were not going to college.

Blackie was, among other things, a machinist. He made rolling stock for the Lahaina, Kaanapali & Pacific Railroad, and custom brasswork for the Hyatt Regency. The later, larger and grander Grand Hyatt used off-the-shelf brass, which Blackie deemed a comedown.

If you only know Blackie for his frequent, short, funny letters to the editor of The Maui News, you missed the essence of the man. He loved to talk, and lots of people — I among them — enjoyed listening.

You heard the most surprising things. At the invasion of Tarawa in 1943, a torpedo sank the small aircraft carrier Liscombe Bay, killing 600 Americans in a matter of minutes. Once Blackie mentioned he had been aboard a similar carrier just a short distance away. He never said anything else to me about his Navy service.

Late in life, after he closed his bar, Blackie’s Boatyard, and his machine shop, he wanted a place to work, so he bought a lot on Luakini Street and built a place with a pool table and workshop. A neighbor came over and pointed to a tree on the lot. As Blackie told it, “He told me a Hawaiian family had lived there in the old days, and they drank and they threw their empty bottles under the tree. ‘If you dig there, you’ll find plenty of collectible bottles.’ So I immediately had four inches of concrete poured around that tree. I don’t want anybody digging up any damn bones.”

Blackie was famous for throwing customers out of the boatyard. He told me he once threw out a young couple who tried to order one hot dog between them. He considered that unacceptably cheap.

Some people disliked such displays, but when an African-American woman he had ejected filed a discrimination suit, Blackie testified under oath that he threw people out without regard to race, creed, color or national origin, claiming a personal best of 23 in one day. He was acquitted of racial prejudice.

The Boatyard was filled with Blackie’s gags. He probably was most proud of the whale egg, which was about two and a half feet long and resided in a glass case with a placard that explained that Maui’s humpbacks laid their eggs in crevices at the bottom of the Alenuihaha Channel. Blackie claimed that many tourists believed it, and I believed him.

Blackie called me a few months ago to say he was working on his memoirs. I said I would be the first to want to read them, but I guess that pleasure will have to be foregone. The one and only Blackie Gadarian died July 21 after a short illness and a long life filled with fun.

Right turn on hospitals

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In reports Wednesday and Thursday in The Maui News, Gov. Abercrombie says he understands that Hawaii Health Systems Corp.’s financial stability needs to be addressed. Hurrah. It remains to be seen whether the Oahu-centric Legislature understands this yet.

It was obvious from the start that HHSC was the wrong way to deal with the fact that small, rural hospitals can never cover expenses. And when rural people start demanding urban services (like emergency rooms), the shortfall just gets more impossible.

Hawaii is an island state. Inevitably, some places are going to be distant in time and space from urban services. When that service is health care, it is reasonable to expect government to level the situation somewhat by subsidizing rural care. The question is, how?

The answer, in 1996, was to loot the operating profit of Maui Memorial Medical Center, the only one of 12 outside-Honolulu facilities to run in the black, to fund the other 11. This ensured that the 11 would be on starvation rations, while MMMC would be constrained in its development. It was a stupid idea, but appealing to the Oahu legislators because by not making demands on the funds th4y wanted for their local schemes.

The governor said he is open to public-private partnerships as part of the restructuring of the outlying hospital systems. No doubt the Oahu legislators will go for any version of this that does not touch the funds they want for their pet projects. Neighbor Islanders must be on guard against this poison pill.

Because if almost everything in health care delivery is debatable, one is not: No private medical center will cover mental health. Not one.

That’s what Mauians were asked to give up when Ron Kwon and Jan Shields attempted to do in MMHC in favor of a private Kihei hospital. They promised better, cheaper service, but what they meant was NO MENTAL HEALTH CARE.

 

 

 

 

Mean streets

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As Kamaaina Loan blog has noted many times, a pawnshop is a stupid place to try to fence stolen goods, since you have to leave your picture ID, thumbprint, address and phone number — not to mention your performance on the surveillance camera for the burglary squad to enjoy.

But pawnshops are also a poor choice if you are planning to rob somebody. Most American pawnshops deal in firearms, so the people behind the counter are familiar with how guns work.

This is not true for Hawaii, where pawnbrokers mostly choose not to deal in firearms. But in Hawaii, armed stickups are thankfully rare anyhow.

In the tough town of Hamtramck, Michigan, three robbers chose the low odds approach, according to this report from the local Channel 2.

It seems ALL the pawnshop employees were packing heat, and before it was over, one robber was shot dead and the others were in cuffs.

But it was  business as usual for Hamtramck, where, according to the police chief Garbarino:

“It’s not too often we get things like this in Hamtramck. Most of our shop owners are armed around here, not to mention our police response is under 30 seconds. In fact, we were here within 30 seconds of getting the call.”

The story does not say, but presumably the pawnshop had a silent alarm that someone tripped when the bad guys came in.

There’s an easier way to get cash from a pawnbroker — bring in something you own (even burglars must own something), and take out a pawn loan.

Mike's. Don't mess with him

Mike’s. Don’t mess with him

 

 

90% of life is just showing up

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Or 100% for a man named KK Ho, who lost his job but kept showing up anyway, pretending to be a bond trader. The Bloomberg News story does not explain how, or if, Ho got income from showing up.

I recall a story, from 40 years ago, about a guy who lost his job, which was something in demand, aerospace engineering or something like that. The story did not explain why, since the field was good, he didn’t just get another job; but instead he made a sort of a living for a couple of years by sending out resumes.

In those days, men with his background were sought after, so employers would send him plane tickets to come to an interview. He cashed the tickets and drove instead, living off the difference.

But the story of the parking lot attendant who just showed up and after years disappeared with millions is urban legend, according to snopes.com.

I feel sorry for the other Mr. KK Ho, who may (or may not, who knows?) be a legit trader in the same city. Bloomberg could not satisfy itself about that. But with only 100 Chinese surnames, and a fairly limited roster of given names or initials, the possibilities for confusion in an increasingly connected Chinese working population appear to be enormous.

It’s bad enough with the US Office of Foreign Asset Control, which keeps a list of foreigners with whom designated businesses (mostly financial, including our Maui pawnshop) cannot trade. Not even to buy a $10 silver ring.

There are a lot of alleged drug dealers on the list, and if one Juan Garcia in Colombia comes to the attention of the DEA, then Kamaaina Loan is forbidden to deal with any Juan Garcia, unless we can prove ours is not the DEA’s.

Not easy to do.

‘Marketplace’ explores pawn business

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National Public Radio’s Kai Ryssdal decides to see if the ups and downs of pawn business are useful in tracking the economy, the way car sales or home turnover are used.

Michael Mack, a fourth-generation pawnbroker explains that, yes, pawn shops are affected by swings in  the overall economy, but buffered, too. When booms come, the retail side improves, while the loan demand may drop; and vice versa in slow periods.

“Pawn shops do well in most every economy,” he argues. “We loan more money in the downturn; we sell more merchandise in the upside. So we try to hedge ourself both ways.”

At Kamaaina Loan, we use the RolexIndex. When the real estate agents start bringing in  their Rolexes, we know the downturn has begun.  But that’s Maui, where real estate turnover, especially on the high end, is more important to the overall economy than in, say, Dubuque.

Mack also lets Ryssdal know that pawn changes, too. When he takes some big collateral (like a plane), he does not hope the borrower fails to repay.

In the old days, Mack told Ryssdal, that might have been the thinking — make a big score by selling the big collateral. But no longer.

Today, pawnbroking, like many another sector, is a relationship business. Mack’s Max Pawn and our Maui pawn shop  both operate on the theory that it is to our advantage to have borrowers repay and reclaim their collateral. And, Mack says, maybe return later to do another transaction. We don’t want to keep your gold ring. We want to keep you as a customer.

Kai Ryssdal

Kai Ryssdal

The profits from selling collateral are never as juicy as they look to outsiders. Just ask any mortgage lender stuck with a foreclosed house over the past six years or so.

Does Macy’s tell Gimbel’s?

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We don’t know. But according to The New York Times, EZ Pawn does tell Tiffany’s.

It’s been a rough few weeks for Tiffany’s. First a vice president was charged with stealing over a million dollars worth of jewelry. Next a customer wearing a riding cap (whatever that is) grabs nearly $100,000 worth of jewelry from a clerk and runs out.

The store got his picture on surveillance camera but, so far, not him.

EZ Pawn, well known in New York because it has lots of ads in the subways, offers advice to Tiffany’s (which has been in business since 1837 and you’d think wouldn’t need it) on how not to get robbed.

One thing that the Tiffany clerk did that even rookies are taught not to do is to take out two items for inspection at the same time. It’s tedious, sometimes, but most jewelers put one piece back before taking out another.

For 9,999 out of 10,000 customers, it’s an irritation. For that 10,000th one, who’s looking to grab and run, it’s a wise precaution. Maui readers may recall the crook who grabbed a $65,000 Rolex and ran from a Wailea jeweler a few years ago.

He didn’t get away  but he did create plenty pilikia.

At our Maui pawn shop, we follow most of the tried-and-true precautions that EZ Pawn recommended to Tiffany’s. But one we don’t:

Ms. Simon said that when a customer entered, she looked at his shoes. If they are tightly laced, that is a sign of trouble: “They’re a runner,” she said. It was pointed out to her that a couple of customers were, at that moment, wearing tightly laced shoes and seemed innocent enough. She shrugged.

Most of our customers wear slippers.IMG_1041

More good press for pawn shops

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A ReutersMoney feature discovers (again) that well-to-do people use pawn shops for short-term loans. Pawnbrokers like to emphasize this, because so many people are convinced that all our customers are fences, derelicts and down-and-outers.

When Marc Kaye needed a loan to fund his boutique insurance firm at a time when payroll, his kids’ college tuition and a mortgage payment were all draining his cash reserves, he didn’t go to a bank.

Instead, he pulled a 1940s Picasso pencil drawing off his living room wall and made an appointment with Borro, a high-end pawnbroker. Borro did not require mounds of paperwork, did not care about his credit rating and did not put him through the third degree over how the money would be used.

“I needed some immediate cash,” says Kaye, who quickly got a six-month loan of $39,500, agreeing to a monthly interest rate of 3 percent plus about $175 in processing fees. “I had never pawned anything before.”

Nothing really new here. Even our little Maui pawn  shop has made a loan on a Picasso. It doesn’t happen every day, but it happens perhaps more often than you would think.

That’s the great thing about pawnbrokers. They are completely democratic.

Well, maybe not completely. Because some customers don’t want to be seen in a pawnshop, either because they are embarrassed or because they don’t want anyone to know money is tight, many brokers — including Beverly Loan Co., mentioned in the story and famous among Hollywood stars as a place to get a discreet hit of cash — have set up private transaction rooms, with secluded entrances.

At Beverly Loan Co., a brick-and-mortar pawn business outside Los Angeles that has catered to the wealthy for 75 years, business is also brisk, and small business customers are on the rise, says owner Jordan Tabach-Bank.

To meet demand for loans ranging from a few thousand dollars to $1 million, he opened a second office in the New York City’s International Gem Tower; it offers well-heeled customers secure storage for everything from GIA-certified diamonds to Patek Philippe watches.

Kamaaina Loan has a private transaction room, too. We go further. Call for an appointment, and if the deal sounds big enough, we’ll send a limo to pick you up.

In  reality, our private transaction room is used  at least as much for appraisals to help conservators settle estates as it is for pawn loans.  (Since the owner is a court-recognized appraiser.)

And not necessarily only for high-value deals. As Jimi, who has been working our pawn counter for longer than anybody except our owner, Big Rich, points out, sometimes a customer comes in with 50 items, all different, that he wants to borrow on (or sell).

That’s awkward to do on the counter, so usually that bargaining ends up in the private transaction room, where there is room to spread out. (Think about offering a collection or coins or stamps. It takes time and space to go through a big assortment.)diamond

Should you be interested in the private transaction room, call for an appointment, 242-5555.

 

Thoughts about buying gold now

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Is now a good time to buy gold? Maybe.

The price is the lowest it’s been in about three years. Which does not mean it couldn’t go lower still. But if you think gold is near a bottom and you want to accumulate, here are some things to consider.

Trust, trust, trust.

Somewhere in China, clever guys are busy counterfeiting gold coins, bars and nuggets. We see it all the time.

Want to hear a horror story? About a year ago, a customer brought us a “native nugget” (that is, as found in nature) of what looked like gold from a well-known deposit in China. (All gold is yellow, but this gold, probably because of the other minerals combined with it, is noticeably paler than most.)

Gold was selling high at the time, and the nuggest weighed close to a pound: If genuine, we would have offered about $26,000 for it.

But first we tested. At our Maui pawn shop, we always test (and, yes, once in a while, even with our experience we miss a fake). And when the “nugget” was sawed in two, it proved to be lead.

We don’t know where the guy got his nugget. Probably he wasn’t a counterfeiter. Just some poor schmoo who bought his “nugget” from somebody he could no longer get back to. Maybe, who knows, from an address in Internetland.

Even “slabbed” coins and bars, with serial numbers, are showing up fakes these days. And the fakers are getting better and better.

So, first, know and trust your vendor.

That means, among other things, avoid those “pop up” gold buyers that appeared everywhere — including kiosks at shopping centers and hotel meeting rooms — when gold was high.

Funny thing. It’s getting easier and easier to avoid those guys, because a lot of them have already disappeared. Several have closed on Maui in the past couple of months. One was a “chain” that had outlets on several islands.

Until one morning, it didn’t.

If you bought a “gold eagle” from those guys and you are dissatisfied now, lots of luck trying to do anything about it.

If you don’t like what you buy from Kamaaina Loan And Cash For Gold, bring it back. We were here 37 years ago, we’re here now, and we’ll be here tomorrow.

Other things to think about, if you are going to hold gold:

1. Put it in a bank safe deposit box. The annual rent is cheap insurance compared to just about any other place you could keep it.

2. Keep your records. There are plenty of legit places that will happily buy your gold. Our Maui pawn shop is one of thousands of reputable pawn shops that belong to the National Pawnbrokers Association. There are other reputable buyers, too.

Unfortunately, there are also too many shady ones.

3. If you are buying $50,000 worth of gold, or more, in a calendar year from one agent, that agent is supposed to file a report to FinCen (the government anti-money laundering agency). We will.

4. If you are converting cash to gold, a FinCen report is required for any purchases of $10,000 in a day. “Structuring,” or dividing up deals to avoid having to report is not allowed.

5. If you are selling gold (as jewelry, coins or bars), in Hawaii (and many other jurisdictions) the buyer is required by law to file your ID. In Hawaii, that means a government-issued picture ID (usually a driver’s license), and, at our Maui pawn shop, a thumbprint, and a physical address (P.O. Box won’t do). If the business you are dealing with does not ask for your ID, they are flouting the law, and that should make you suspicious about everything else, including the accuracy of their scales.

We have checked and found any number of pop-up gold dealers on Maui who do not follow this law, but it isn’t something that gets prosecuted. Be smart on your own behalf.

The same cautions apply to silver coins and bars as well. You might suppose that counterfeiters wouldn’t bother with silver, which is worth so much less than gold. And that’s true — up to a point.