Wikinvest Wire

The Los Angeles gold parties

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.
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.
IMAGE 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.
Some quick math on the figures above indicate that they're paying around 40 percent of the spot price for 22 carat gold.

That's about double what you'll get at Cash4Gold as discussed here after the Super Bowl.


This week's cartoon from The Economist: IMAGE


Anthony J. Alfidi said...

The good news is that mortgage bankers are finding productive employment. The bad news is that they're still ripping off people.

Anonymous said...

I work with Erin in the SF Bay Area. We are not ripping people off paying 65% of market value for gold. No one out there is paying this much. You should do more research before making such comments.

Anonymous said...

I love this is a contrarian indicator. The public is trying to sell their gold for stupid FRNs. Long way to go before this is comlete.

marku said...

So Tim, how far away are we from ex-realtors talking up junior mining stocks? Time to sell my gold? Just kidding....

the4lenks said...

Hellooooo! cash4gold pays $1.67 per gram, that's about 10% of it's value.

Bill said...

Gold and diamond parties in people's HOMES are criminal violations of CALIFORNIA BUSINESS AND PROFESSIONS CODE SECTION 21642 (b) 1.

The reason it is a violation is because secondhand dealer activity, according to California BUSINESS AND PROFESSIONS CODE SECTION 21625-21647, must:
1. Be conducted under a license.
2. Can only be conducted at the business address that the government has printed on the license, not in someone's home.

The penalty is 2-6 months in jail and up to a $25,000 fine according to California BUSINESS AND PROFESSIONS CODE SECTION Sec 21645 A through C.

This could effect BOTH the criminals offering the home gold party AND the homeowner hosting the party.


I didn't make this stuff up. Look the laws up yourself.

Anonymous said...

Bill works for Valencia Loan Company & Pawn Shop
He thinks everything is Illegal

Bill you're just upset because you are giving people 30% for their gold and you hate the fact that a gold party company is paying 65%.

eric blair said...

I worked with Erin years ago. Sheis not a scammer! You are wrong!

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