Sunday, February 22, 2009
There's yet another story about "gold parties" in the mainstream media, this one in the Los Angeles Times, and it makes you stop and wonder just how quickly fortunes have changed for some people in some parts of the country.
A few years ago, when friends and neighbors in the City of Angels would get together, they might talk about how much their homes were worth and how they might spend the money they were in the process of "extracting" from them with the assistance of some bank somewhere which may or may not still be in business.
Today, they are more likely to extract unused jewelry from their dresser drawers and, when they meet with friends to swap it for cold, hard cash, they probably think more about what bills they can pay or what essentials they need, rather than what fun new thing they can do or buy with the proceeds.
There is more than a little irony in the fact that the lady who was running the gold party that was the subject of this report used to be a mortgage executive.
Julia Geivet, 39, had hopes of selling an "embarrassing" Italian horn bauble she had owned since eighth grade and a few other small trinkets, which she thought might get her $30.Some quick math on the figures above indicate that they're paying around 40 percent of the spot price for 22 carat gold.
The party Geivet attended at the Aliso Viejo home of Mary-Margaret Fincher is a twist on the old suburban Tupperware party. Here, however, it's the guests who do the selling.
Erin Stevenson, who organized the party through her group My Gold Party CA, appraised the jewelry with assistant Richard Bartoletti as guests debated whether to wear heels or flats during pregnancy.
Fincher, 34, said the parties were popular in her hometown of Atlanta. As the host she gets 10% of what is paid out -- which this night was $4,000. One woman walked away with a $1,836.88 check.
Stevenson pays about 65% of the market value, which works out to $5.56 for a gram of 8-karat gold, rising to $15.47 a gram for 22k. She then sells the gold to a refiner for a price just under the market trading price.
She founded her company in April after losing her job as a mortgage account executive at Credit Suisse. Business ebbs and flows with the price of gold; right now, she's booking three parties a week.
That's about double what you'll get at Cash4Gold as discussed here after the Super Bowl.
This week's cartoon from The Economist: