Banking Licenses Sold!

[Midnght]

See bolded paragraph Joker.

LONDON (Reuters) - For people who need cash but are in debt and not sure property prices will support another loan, an ancient solution may be making a comeback: the pawn shop.

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The practice of pledging valuables such as jewellery in exchange for loans was mentioned in the Bible and dates back over 3,000 years to the Chinese. Used by the Greeks and Romans, it has traditionally been viewed as a seedy business and portrayed as a recourse for the desperate.

But pawning, which also happens in North America, Scandinavia and Australia, is sprucing up its image in Britain to attract more affluent clients as people sink deeper into debt and high gold prices swell the loans their jewels can secure.

Pawn franchises with glossy signs can be seen in many towns. The outlets often resemble building societies, the trusted alternative to banks that are widely used by Britons for saving and home loans.

There are now about 800 pawn shops in Britain against just 50-100 in the 1970s and early 80s, said Des Milligan, Chief Executive of the National Pawnbrokers Association (NPA), established over 100 years ago to represent the sector.

The NPA estimates around 400 million pounds a year is borrowed from pawnbrokers across Britain, but cannot give historical comparisons.

Pawnbroking has long served the poor by tiding them over during financial ruts, but it is now reclaiming city centres and brokers say they are serving people from all walks of life.

"Over the last three to four years, we have noticed the amount of professionals coming into our stores increase," said marketing manager David Towse of pawnbrokers Harvey and Thompson, which has 77 shops across Britain and is one of two pawnbrokers listed on the London Stock Exchange.

The other is Britain's largest pawnbroker, upmarket Albemarle and Bond, which has 79 shops.

Shares in Harvey and Thompson have over the past six months outperformed the London market with an over 20 percent gain, although Albemarle and Bond have lagged the FTSE 100's five percent rise.

"It is part of a general trend that people are beginning to accept pawnbroking... The Dickensian image of the backstreet pawnshop is fading," Towse said.

Angie Liston, a real estate agent and first-time pawner who received 400 pounds against a gold necklace and her husband's watch, said she was surprised by how efficient the process was.

"(Getting the money) was very easy to do and it was better than standing all day queuing at the bank," she said when leaving a north London pawnshop. "This will sort out some extra bills we have and I'm sure we'll give it another go come the time."

DEEP IN DEBT

Pawnbrokers still bear a traditional symbol of three gold balls suspended from a metal bar, a relic from 15th century Florence where the Medici family of bankers had the image as their coat of arms.

The system is simple.

A loan is taken out against a valuable item which is later redeemed by the client during a contracted period up to seven months, when they repay the borrowed money plus interest.

A pawnshop can provide similar sums of money to a small bank loan. Typical loans range from five pounds to thousands with an average of 100 pounds, Milligan said.

But unlike a bank loan, there is little paperwork and no credit checks are needed as the pawn shop uses the valuable goods as security.

Interest is usually charged at around seven percent a month -- banks charge about seven percent annually -- although it is often reduced for regular customers or large amounts, Milligan added.

Those who can't get the cash together in time to repay a loan see their jewellery move to the sales window. On average around 10-20 percent of pledges are not redeemed.

Britain is saturated in debt which is growing monthly with Britons owing some 1.3 trillion pounds, making them some of the most indebted people in the world, official data shows.

Around one trillion pounds is owed to lenders such as banks for mortgages and the rest is unsecured debt, like credit cards.

Insolvencies are also running at record levels, although the Bank of England says this is not a major problem if people can afford to pay back their mortgages.

"It's a totally different ballgame now from 20 years ago when I started out," said Stephen Pam, manager of independent Hatton Garden Pawnbrokers in London's banking district.

"Interest rates are now very low and people over-extend themselves or have big mortgages. That's when they come to a pawn shop."

GOLD WEIGHS HEAVILY

Another factor which may support pawning -- although the NPA sees this as just coincidence -- are recent highs in the price of gold. Brokers say these have sent the street value of jewellery soaring.

"We look at it very simplistically. We weigh the gold, we test the gold -- and it's worth more now," said a Wagonmark pawn shop assistant in North London, who declined to give her name.

Gold has gained nearly 10 percent this year and more than 65 percent in almost two years, as investors and funds poured money into the metal amid worries about firm oil prices, tensions in the Middle East and a weaker dollar outlook.

Gold hit a 26-year high of $730 an ounce in May last year. It surged to an all time high of $850 in January 1980.

Gold generally moves in the opposite direction of the dollar, which has been gradually weakening over the past year.

"We try to price things so that you would come back. We're not going to lend you too much, because then we won't see you again," said Wagonmark's shop assistant.

Pawnbrokers suggest a newly-wed couple could pawn their gold rings to cover the cost of a honeymoon more easily than with a standard loan. They also like to note that Christopher Columbus funded his voyage to the New World by pawning Spanish Queen Isabella's jewels.

[thoreau]

Originally Posted by Deathifier

That was fun to watch, but I disagree with it being the most exciting auction around.

It is hard to beat the TI auction,...

For me the TI auction was better because it involved 2 committed EU players. I'm not sure who 3 of the 5 winners are for the bank licenses and I suspect the 4th is just here for the cash.

Additionally, I worry about why MA is selling things such as they are. 26k for TI, 100K for CND, 400K for Bank Licenses. It just doesn't feel right.

[chielsen]

Well Joker i whish they were banks, but there is not such a system in place (only transfering owner ship, not the item itself), so it are just pawnshops.
Maybe MA will add this feature, but if they were planning to do that, why didn;t they mention it. It's far more interesting for banks that way (because it's more interesting for people to get a loan).

[Midnght]

Originally Posted by Joker

I have never been to a pawn shop just know one of thier functions...

that is buying things cheap... selling them higher... never knew they could make loans eh? where i live there are pawn shops all around.. but non ever say LOANs here....

They don't say it because people who use them understand this. If you go inside they may have a sign. If not simply ask them how much you can get for an item how long oyu have to pay back the loan and the fee upon repayment. I'd wager they'll tell you their set up.

If they don't give loans then they are not a true pawn shop.

They are a consignment shop or antiques dealer etc. they will buy your stuff period end of story. Or sell it for you for a price if it doesn't sell you can get it back or they keep it.

[Joker]

well then knowning this.. how could u prepose to MA to make it more like a bank.. i see no other options.. this is the best way to make it no risk...

and since they dont want to get involved with authorities i would imagin... This still is a bank IMO nothing gonna change it sorry


maybe there is a happy medium but it isnt a pawn shop to me... and i think MA would be upset to know people thought this

[Midnght]

Originally Posted by Xen

No man, pawn shops *do* hold your items, for an agreed upon amount of time.

From what I've heard about how they will work, it is exactly like a pawn shop. I have not heard of any bank-like functionality, like being able to deposit and collect interest, or unsecured loans with irl credit checks, not even secured loans with you keeping the collateral and it being transferred upon default.

Oh many I want soo want my Neverdie savings account!! }:>)

[Angel D]

Originally Posted by Joker

well then knowning this.. how could u prepose to MA to make it more like a bank.. i see no other options.. this is the best way to make it no risk...

and since they dont want to get involved with authorities i would imagin... This still is a bank IMO nothing gonna change it sorry


maybe there is a happy medium but it isnt a pawn shop to me... and i think MA would be upset to know people thought this

They could add savings accounts where you receive interest. If they were related to a real bank, they could offer faster ped to RL money such as the ATM cards. They could offer a loan so you could buy real estate, rather than having to have the deed before applying for a loan.

But as they stand, they are overrated pawn shops.

[Xen]

Well, they are going to be pawn shops to many, if they don't add some more bank-like functionality.

They can call them "Banks" all they want. If you put a dress on a pig, it's still a pig...

[Midnght]

Originally Posted by Joker

well then knowning this.. how could u prepose to MA to make it more like a bank.. i see no other options.. this is the best way to make it no risk...

and since they dont want to get involved with authorities i would imagin... This still is a bank IMO nothing gonna change it sorry


maybe there is a happy medium but it isnt a pawn shop to me... and i think MA would be upset to know people thought this

Well if they run it like a bank IE a savings account you can earn interest on then were back to square one with US issues. and taxes. Not sure of other countries taxes. but int eh us you have to claim the earnigns from your savings account.

Then they are beholden to bank regulations etc etc.

Being multi national they'd be hard pressed to follow all the banking guidelines the pawn shop aspect is the best way to work a bank scenario for them without having to deal with multiple nations legalities.

[chielsen]

Originally Posted by thoreau

For me the TI auction was better because it involved 2 committed EU players. I'm not sure who 3 of the 5 winners are for the bank licenses and I suspect the 4th is just here for the cash.

Additionally, I worry about why MA is selling things such as they are. 26k for TI, 100K for CND, 400K for Bank Licenses. It just doesn't feel right.

Why would 4th be in it for that cash? You don't deposit 600k to to speculate somebody else takes it from you for more who does have the extra 1 M lying around.

And I think it's good that MA is trying to get more money into the game, but I'm afraid that they will nerve something again to please the investors. Just like nerving auction system / shopkeeper.

And i'm no miner, but as miner you are almost obliged to mine on CND as that is were all the goodies are. So miner all go there, but no storage.. Ah now ND can sell his apps..
TI... gave unique mobs (SEGS) and free tp.

Ma always makes sure investors get their money back.
So I wonder what will be nerved this time. Because I doubt it very much that they will make back the money with EU as it is now and the plans lying on the table.