President Obama continues to tout his jobs bill, though it hasnt been getting much traction in Congress. Still,HB Markets Breakst Today including: National Grid,. there are a few industries that have been growing without government help: tech, healthcare Comments 54,Tera Gold. and interestingly, pawnshops.
The History Channels reality TV show Pawn Stars reflects how pawnshops are adapting to todays economic reality: They now cater to people who just a few years ago were buying expensive watches, not borrowing against them.
KALWs Callie Shanafelt takes us to one such pawnshop in Millbrae.
CALLIE SHANAFELT: At first glance, Numis International looks like a discount jewelry store.
JACOB NOTOWITZ: I have people who come in sometimes and theyll say, Do you know where the pawnshop is? And Ill tell them that its right here and theyll be surprised.
Thats Jacob Notowitz. His ther endearingly known as Uncle Al, opened the shop as a coin store in the early 60s. Now more than half of the people who walk through their door come into the shop to get a pawn loan. Like Gordon Winter.
GORDON WINTER: I ran out of money I didnt have the means to make it to the end of the month. I have a lot of other instruments here at the pawn as well.
Winter says this as he picks up the 1978 Fender precision bass guitar he pawned four months ago. Winter is a former musician and has been unemployed for the last three years.
WINTER: I worked for Xerox for six years and was laid off.
Now he lives off a trust fund from his parents,uwo gold but when he doesnt have money to pay his bills he borrows from Numis International for about a 10% finance fee. If he doesnt repay the loan and fee within four months, the shop can sell his guitar.
WINTER: I wanna hang onto my instruments. Ive had em almost all my life so I always make sure I pick em up or pay the finance charge before the date runs out. Ive never let anything lapse thats for sure.
If he did let the loan lapse it wouldnt affect his credit score. Winter would lose his guitar and that would be the end of that.
The simplicity of the pawn loan is probably why its one of the oldest financial instruments in the world. Queen Isabella of Spain mously said she would pawn her royal jewels to fund Columbuss journey to the New World. But Jacob Notowitz says the new customers who are showing up at his shop arent funding adventure.
NOTOWITZ: Five years ago they were in excellent shape and unfortunately theyve run into hard times and its taken them a long time to run out of their savings.
Notowitz says at the beginning of the recession his average customer was in their 30s or 40s…
NOTOWITZ: They were either out of college and had a job. They were kind of the first to be let go.
Now their average customer is in his or her 40s or 50s,cash for gold wow. and many have never pawned anything before. Theyve never had to.
NOTOWITZ: Youll find that they come in with a Rolex that was $28,000 new a nice mans President Rolex and they need to borrow $6,000 and that works, we can do that.
A lot of these people have been out of work for years. But Notowitzs customers arent just the long-term unemployed. One recent customer borrowed $15,000 to pay his employees.
NOTOWITZ: Hes a contractor. Over the last couple years everything slowed down for him. He still has jobs but if you get work done on your house you maybe make a deposit but you definitely dont pay the whole thing up front.
While Notowitz loans out anywhere from $25-$500,000, the average loan is about $200-$300. The most common items pawned and bought at his shop are jewelry and collectible coins. Gold is especially in demand.
NOTOWITZ: Were getting tons of new customers who are doing that. They are buying gold as a hedge against the downll of the dollar. Theyre buying gold against the downll if the stock market drops because theyre scared to put their money there. Or the return on their interest for savings is so low.
DONNA: How much is gold an ounce at right now?
NOTOWITZ: Golds doing at $1,800 an ounce. On something like this we work on about 8% cost.
Donna, who asked to not include her last name Rappelz Rupees, came to the shop today to sell gold chains and earrings.
NOTOWITZ: If you were to sell these today, Im assuming everything here is 14 carat, I do have to check it youd get just under $400 on these items.
DONNA: Okay, Id like to do that.
NOTOWITZ: Let me figure exactly, and I get you an exact number, okaywow gold?
People may think a lot of what ends up in pawnshops is stolen, but Notowitz says buying and selling gold is highly regulated.
NOTOWITZ: The last thing I need is a thumbprint very softly put the center of your thumb right there. Go like this It evaporates, its not ink.
DONNA: Wow do you need a feet print too?
NOTOWITZ: Three drops of blood, your first born.
Each customer selling gold has to leave a thumbprint, and the item is held for 30 days while its repo