How bad is it? Pawn shops, payday lenders are hot

[formercia]

Down on the US? Consider stocks that rise when things fall. Pawn shops, payday lenders are up

NEW YORK (AP) -- As the jobless rate inches up and the economic recovery sputters, investors looking for a few good stocks may want to follow the money -- or rather the TV, the beloved Fender guitar, the baubles from grandma, the wedding ring.

Profits at pawn shop operator Ezcorp Inc. have jumped by an average 46 percent annually for five years. The stock has doubled from a year ago, to about $38. And the Wall Street pros who analyze the company think it will go higher yet. All seven of them are telling investors to buy the Austin, Texas, company.

Is the economy still just in a soft patch? A hard patch? Will the market rise or drop? Even experts are just guessing. In investing, it's often better to focus on what you can safely predict, even if that safety is found in companies that thrive on hard times. One good bet: The jobless aren't likely to find work anytime soon. And companies profiting from their bad fortune will continue to do so.

--snip--

http://finance.yahoo.com/news/How-bad-is-it-Pawn-shops-apf-2995486552.html


Welcome to the Real World, Neo.

[Taverner]

1. Can someone explain to me how a pawn shop makes money?

Look - -I know the first part: people who are down on their luck 'pawn' their most prized possessions for a quick buck that undervalues the item, but lets them buy that object back at a lower price.

But considering most people down on their luck stay down on their luck - the guy has to sell the possession at some point, otherwise its product taking up space - and pawn shops are not good places for a deal. Most stuff they sell is cheaper to buy new.

[Viking12]

5. Interest

Most items are offered up to the pawn shop as a form of secured loan. If the customer wants the item back, they pay the balance of the loan along with substantial interest. If the customer 'defaults' on the loan (usually after 90-120 days), the pawn shop sells the item.

Some pawn shops, like the one featured in 'Pawn Stars' on the History channel buy outright at a rock bottom price and resell for a profit.

[brewens]

6. That's not the way it works. I hocked my golf clubs once when I was a kid

for $50. I think I had to pay the guy $10 a week to keep him from selling them. This was for that day a pretty nice set of Power Built Levalumes and bag. Even used he would have got $100 easy. I got them back by the next weekend so I could play golf. What is that? Over 1000% interest? That would be how they make money.
That's right. I couldn't afford to pay my bills but I could play golf.

[Lone_Star_Dem]

7. Interest

They charge around 240% APR on items in pawn. At least in Texas. Most people come in monthly to pay their interest keeping the note alive. It's only after they stop paying the interest that an item goes out for sale. The vast majority of people try to hang on to their possessions as long as possible. Most cases they pay way more in interest over months than it would have cost for them to get their item out of pawn. The problem is they have the lesser amount to pay, but not the whole amount at once.

[Taverner]

10. Ahh that makes sense. Thanks

And thanks for the other responses. I knew I was missing something.

[pipi_k]

11. Those pawn shop programs on TV...

"Pawn Stars"..."Hard Core Pawn", etc. show how they make money.

People bring stuff to them for "loans". They get money and a certain length of time to pay back the loan to get their stuff back. With interest. If they don't get the stuff in that timeframe, they forfeit and it goes up for sale.


Also...some people bring their stuff to pawn shops for sale. The pawn shops buy the stuff at ridiculously low prices. Why? Because they know the people are desperate.

"Hard Core Pawn" takes place in Detroit's 8 mile area. People truly are desperate there. Some of them are willing to take ten dollars for a video game system. Then the pawn shop can sell it for twice or three times that much and make a huge profit.

I think those people are weasels for taking advantage of poor people.

[GReedDiamond]

13. Slight correction...

...8 Mile is in Detroit, which is indeed an economically depressed area with plenty of desperate people.

The "Hard Core Pawn" guy could be properly described as a "weasel" - I saw an episode where he proclaimed his adoration of Dick Nixon.

[pipi_k]

18. OK, thanks...

I knew that but get things confused. Will try to edit...

Anyway, I didn't know Les Gold liked Tricky Dick Nixon. But it figures...

[GReedDiamond]

22. "Les Gold"...great name for a pawn shop guy...

..."come into our pawn shop and you too can have Les Gold than when you entered!"

"Max Gold" would be a more appropriate moniker for this guy, judging from his sleazy looking bling.

[pipi_k]

28. No kidding! What the hell is up

with that ugly ass necklace thing he wears?

I have to confess that I have an emotional reaction dislike for the guy. He reminds me of my second husband when he used to get drunk.

I often feel like slapping Mr Gold's silly face.

[formercia]

32. He must also own a Falafel Franchise.

I wonder if he also owns a pair of Elvis Glasses.

[notadmblnd]

19. I think he's a weasel too

I sometimes cleaned house for his sister who worked for him many years. These people have nothing better to do (retired in their 50's) than to take advantage of people and complain. They are cheap SOBs that think they are entitled to something for nothing. The thing I hate about them most, is their bigotry. They have a naked blow up doll of President Obama tossed in a corner of their garage right be the entry door. It is very offensive to me an I have refused to go to their home to clean.

[pitohui]

14. they steal old people's gold for pennies on the dollar

one of these theives just gave an older relative of mine $70 for thousands of dollars in melt weight of gold, if i had only known, i could have given her much more and still turned a nice profit myself

if you have ever brought anything to a pawn shop and asked what you can get to borrow against it, you will be STUNNED -- this is a bold class of legal fraud indeed!

they are giving folks pennies on the dollar and then putting thousands in gold (and now, with rising silver prices) also silver in their pocket

i'm sorta friends w. a guy who became a multi millionaire, starting as a homeless grifter in atlanta a few decades ago, and almost all of the money came from his pawnshops/gold buying and selling

if you have no soul and no conscience, then it's a very profitable business

the rest of the crap, such as the buying and selling of shit cameras and tools etc. i think they do that just to make the store look bigger -- the profit is in paying pennies on the dollar for gold

[formercia]

23. Pawnshops get 98-99% return on the value of the Gold from the Refinery.

There are Refiners that cater to the Pawnshop Trade. The Refiners will even return the stones, which can be sold for a profit as well. Even the small Diamonds have value.

[snooper2]

45. You haven't shopped at many pawn shops..

I got a Stihl MS 270 that sells for around $425 new for $130 (had it listed at $175 but you can always get them down)

[woo me with science]

2. Constant commercials, too, for the thieves who will liquidate your settlement or annuity,

and give you a portion of your own money back.

And the ubiquitous reverse mortgage commercials, which tout the wonderful benefits of "financial security" in your old age, obtained through mortgaging away the only free and clear asset you have left.

Put your gold blindly into an envelope, and we will send you some money, we promise.

All of these designed to make it fast and easy for desperate people to relinquish the last resources they possess, for a fraction of their value.



And we also have the mushrooming for-profit, fly-by-night professional schools, which promise to lift people out of a desperate situation but actually drown them in student loan debt and leave them with a worthless McDegree.

[Sarah Ibarruri]

3. I notice things a lot. After Reagan the pig took over, I began to notice some things changing

Dollar Stores began to spring up like flowers.

Homeless people were everywhere. Someone I know opened a pawn shop and made a lot of money on it.

Under Bush, I noticed that the Miami Herald's Sunday employment pages, which were pretty huge, 15 or 20 pages or so, began diminishing. Now they're one page.

If we continue to do nothing, and end up with presidents that are subservient to the Repukes, I don't know what's going to happen.

[HughBeaumont]

8. Cities that once thrived and had people are now boarded-up ghost towns.

These ghost towns usually have minimum one, usually three, closed hulking buildings where factories used to be and weeded-up pavement where the workers used to park (see: Northeast Ohio).

My mom didn't have to work . . . until Reagan was president.

My dad was able to buy a new house and was able to pay for it without issue . . . until Reagan was president.

Now he cannot sell that same house he bought in 1978, even though it's a four bedroom, 2-car, 1 bath (2 half-baths) with a jacuzzi and a finished basement, near the schools and near a pool. Four years on the market. NO one is biting.

This is what happens when your tax base (in this case, the Ford plant and another business) leaves and is replaced by retail and tourist shops.

You know what else dies with free trade - all of the surrounding bars, stores, restaurants and small businesses that had to close up shop because there's simply no secondary business brought from those Ford workers.

This is Reaganite "free trade" at it's finest.

This epic FLOP of an economic system should have been tossed in the dustbin 20 years ago. Instead, we keep on perpetuating it, as if "we give it another few years, it's just GOTTA work, by cracky!"

Unbelievable.

[Sarah Ibarruri]

9. The Bible bangers sided with the fascists, and went to the polls as a brainless group

And we're now a second-world nation, heading to third-world.

[surrealAmerican]

20. Not to detract too much from your point ...

... about the economics of the Regan era, but those dollar stores mostly "sprang up" because of what was vanishing at the time: "variety" stores and "five and dime" stores like Woolworth's and Newberry's . The demise of these stores left a void that the dollar stores filled.

[Sarah Ibarruri]

31. I don't know about that. Five and Dime stores were not $1.00 stores - they had items that cost more

When I lived in NY there was 1 store that was 'like' a dollar store, it was called John's Bargain Store, and things cost less than a dollar. They weren't springing up all over the nation tho.

Now dollar stores are everywhere, and the sort of people that go there are generally quite poor. Some buy their food from there, and dollar store takes rejected products or imitations. Very low quality items.

[Rex]

4. Funny how they drag a dead horse behind them and call it a

recovery. People pawn things out of desperation, we are a country desperate for some kind of financial miracle.

[formercia]

34. They offer statistics to try and convince us that the Economy is improving.

..and the value of Pawnshop Stocks are almost doubling every Year.

It's just too late for a lot of us.

[Volaris]

44. yeah...and every item sold off for LESS than its worth,

is just another mechanism of upward wealth transfer...

[originalpckelly]

12. Pawn shops are a total rip off. So are payday loans. And don't forget check cashing places.

As someone who has seem intense poverty, I know that this is a part of what keeps people so poor. But you're willing to take this shitty deal because it's all you've got.

Ebay is a better deal, but the problem is that you have to be able to have internet, which you may not when you're very poor.

[Rex]

15. And the commercials! Almost as bad as the E-college promos!

"It's MY money and I want it NOW!" I HATE that commercial! :mad:

[Posteritatis]

27. I was really glad when the local government came crashing down on payday loan places

They were all officially mentioning interest rates which are vastly too high in the first place, but the fine print had enough daily fees and taxes and service charges that the effective interest rates on most of them was several thousand percent.

[Mojorabbit]

16. It is my barometer of the economy

payday loan and pawn shops multiplied like rabbits during the 80's also

[formercia]

29. It's a much better Barometer

than the bullshit statistics the Government puts out.

[The Midway Rebel]

17. Pawn shops were few in my town until...

we legalized casino gambling. Now we are saturated with them. Funny how that worked out.

[peacetalksforall]

21. It's not -

the economy and the market ...

"Is the economy still just in a soft patch? A hard patch? "

It's what the ruling elite agree to.

They frame and make the economy, the market and more - they invent frauds.

We are just swinging in their wind.

[formercia]

24. Getting the last drop of Blood out of the Turnip

..squeezing those last few things of value from the Poor.

[kenny blankenship]

25. Who says "You'll never get rich"?

If you're willing to cash in on others' misfortunes, there's ALWAYS opportunity for you in America.

[formercia]

26. Disaster Capitalism

here's always a way to squeeze a buck or two out of the misfortune of others.

[Major Hogwash]

30. Yeah, I noticed that when the largest one here opened a 2nd big new store farther uptown.

The 2nd one was HUGE!!
And it was stocked from ceiling to floor with people's stuff.
I just about cried when I saw it advertised on tv.

All of that stuff that everyone hawked to make a few bucks from it.
Broke my heart, man.
I thought they should do away with them, but at least they're not selling it on the black market as much now.

I don't like the Repo man much either.
But their business is booming big time.
Every other day I see them hauling a car back to a dealer, loaded up on their trailer.

This shit has gone on for so long, 3, 4, or 5 years now for some, that people are losing hope.
They'll never figure out that it was Bush's 2 neverending wars that did it to them, they'll blame Obama instead.

[formercia]

33. Sad, isn't it?

Peoples' lives going down the tubes.

[Major Hogwash]

35. It really is. The most popular reality program on tv is that show called "Pawn Stars".

The guy that owns the store is not all that fascinating, but the stuff people bring to sell to him is a strange assortment of antiques and just junk.

At the local pawn store, there are items that you just know were in their family for at least 2 generations, but they need the money more than grandpa's stuff.
It's sad to see so many antique items or stuff 100 years old in there.
And dozens of guitars.
Dozens of them.
Like, all of those kids wanted to be the next Elvis Presley or Jimi Hendrix.

Broken Dreams Shops is what they ought to call them.

[formercia]

42. "Broken Dreams"

Broken lives, broken families. Many will take generations to recover, if ever.

[Odin2005]

37. Pawn shop owners, loan sharks, a repo men are all evil sociopaths.

I wish they all dropped dead.

[Major Hogwash]

40. Pretty much. They are bottom feeding leechs attached to the still living souls of the poor.

They make their money by sucking the very last bit of worth out of the people while picking their teeth with gold-plated toothpicks.

[Odin2005]

36. Pawn shops and payday loan sharks are evil.

[formercia]

38. I agree.

When the Pawn Shops come to Town, it's time to move elsewhere.

[CleanGreenFuture]

39. So are CoinStar machines. I have the opportunity each week to chat it

up to the lady behind the service desk at a local grocer that handles some business matters for me. A couple of weeks ago I needed a money order and while she was taking care of that for me we were chatting about gas prices having come down and I asked her if she had noticed an increase in traffic at the CoinStar machine, which is right beside the door to the Customer Service desk.

She shook her head and sighed and said sadly that used to they would only get a few people a day cashing in change collection vessels of some sort or other (mine is a plastic Folger's coffee can) from their cars simply because they were full, not necessarily because they were resorting to desperate measures. Now, however, the machine is busy all day, with very little time between uses. And she said some people are embarrassed and some come right out and admit they're down to this point.

She's a sweet lady. I know seeing this hurts her heart.

[formercia]

41. So many are scraping the 'Bottom of the Barrel.'

The so-called 'Economic Recovery' is just a cruel joke to them.

[w8liftinglady]

43. All I can say... here in Texas, EVERY strip shopping center consists of

1. Pawn Shop
2. Pay Day Loans
3. Dollar Store
4. Washateria.

It is an epidemic here...

oh, and BTW- small "Mom-and-pop" businesses...... almost non-existant.