Jim Cramer Jumps on Pawn Shop Bandwagon

By: TraderMark Monday, October 20, 2008 2:22 PM

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Just noticed this Cramer pump of the pawn shops, specifically Cash America (CSH) from last week's Mad Money - we identified this trend in July (Jul 7: Missed Opportunity in Cash America) (Jul 10: Another Payday Loan/Pawn Shop Breaks Out on Higher Guidance - A Trend Seems to be Afoot) but we don't have a TV show ;)

I prefer EZCORP (EZPW) over Cash America (CSH) due to the heavier exposure of the latter to the cash advance business, but both have extensive pawn shop networks. I was trying to figure out why EZCORP was up so much today when I saw this Cramer blurb.

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Cash-strapped consumers don’t have the same options struggling banks do. The Fed discount window doesn’t open for Joe Six-Pack. So when times get tough and credit is non-existent, a lot of Americans turn to a different window, at their local pawnshop, to raise money.

Sure, this one’s bulletproof and you have to scream at the clerk through tiny air holes to get his attention, but pawnshops do trade greenbacks for jewelry. And as morbid as it may sound, more and more people might be exchanging their favorite gold bracelet for cash as the U.S.

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