You know it’s bad when…. you have to pawn your 18-caret gold bracelet with 69 diamonds to get a face lift.
Bloomberg: Even Pawn Shops in Bevery Hills are Booming
Courtesy of Trader Mark at FundMyMutualFund.
Goodness gracious! I guess every income strata is indeed being hit. It is ironic he used the words I’ve used in the past in regards to pawn shops – the lender of ONLY resort for more and more Americans. I just didn’t expect it to be the Beverly Hills crowd when I said "people". I guess the lack of discipline, planning, and financial literacy is not just a problem of the "common folk".
- The worse the economy gets, the better it is for Jordan Tabach-Bank. “Business is booming,” said Tabach-Bank, the chief executive officer of Beverly Loan Co. in Beverly Hills, California.
- Beverly Loan is a pawnshop. Not just any pawnshop, but the kind that caters to people who hock Cartiers, Harley- Davidsons and Oscar statuettes when they need cash. They really need it now, Tabach-Bank said from a third-floor office, protected by bulletproof glass, off his showroom in the Bank of America building near Rodeo Drive.
- “I’ve never seen so many bankers, lawyers, doctors and actors” with valuable things to pawn, he said. He pointed to an 18-carat white gold bracelet with 69 diamonds ($2,900) and an 18-carat yellow gold Rolex Yachtmaster II (“a steal” at $18,500).
- With credit drying up at regular lenders, “in many cases now, we’re not just the bank of last resort,” Tabach-Bank said. “We’re the bank of only resort.”
- The average U.S. pawn transaction is $75, according to the association’s Web site. At Tabach-Bank’s shop, “confidential collateral loans,” as they’re called, have been made on art works by Pablo Picasso, Andy Warhol and Jean-Michel Basquiat. Amounts loaned range from several thousand dollars to “six- and seven-figure deals,” he said, with clients using the money to cover the mortgage, make alimony payments or finance cosmetic surgery.
- South Beverly Jewelry and Loan, also in Beverly Hills, has seen business triple in the past six months, said owner Yossi Dina. Some of the collateral is in a parking lot: About 60 cars, including Ferraris, Porsches and a Bentley. “We’re making loans today we never used to,” Dina, 54, said. “Millions — never used to have that. We’re selling a necklace now, the client wants $2.7 million.”
- The pawning surge has a drawback, according to shop owners. Just as falling real estate prices have led to record foreclosures in some cities, customer defaults have climbed by “a couple of points over the last six months” said Tabach- Bank.
- In downtown Los Angeles, King’s Jewelry & Loan began seeing luxury business pick up about 18 months ago when variable-rate mortgages started resetting to higher payments, said owner Sam Shocket, 54, a member of the national association’s board. “We were seeing more Rolexes, Patek-Philippe watches, larger diamonds,” said Shocket, who deals almost exclusively with jewelry.
- “Instead of construction workers, we’d see major contractors,” Shocket said of his customers. “Instead of real estate agents, we’d see brokers. Instead of actors who played bit parts, we’d see someone you might recognize from `The Tonight Show.’ ”
- Tabach-Bank said clients have pawned items to pay for mortgages, emergency health-care, “tummy tucks and face lifts” and gambling debts, “especially around Super Bowl season.” (I’m noticing a plastic surgery theme here – "hey man, I’m technically broke but I look good doing it!")
