For a long time, the conventional wisdom was that even if the economy headed south, the well-to-do would not be seriously affected. After all, they had plenty of money. A weak economy and falling prices would only bolster their purchasing power.

Of course, those assumptions rested on the belief that those who were classified as being in the upper echelons were truly wealthy, and that their financial standing was not overly dependent on borrowed money or a steady paycheck.

As it happens, that was not the case. And that is one reason why, as the Wall Street Journal reports, "People Pulling Up to Pawnshops Today Are Driving Cadillacs and BMWs."

Well-to-Do Turn to Last-Resort Lenders; Putting Up Diamonds, Dumpsters as Collateral

PHILADELPHIA -- At Society Hill Loan, a pawnshop in a middle-class neighborhood here, a steady rain fell outside as a fashionably dressed young man parked his Cadillac Escalade outside. Looking around warily, he came in to speak with Nat Leonard, co-owner of the store.

The visitor was a 29-year-old engineer who was laid off earlier this year from one of the local chemical companies. Since then, he's been cleaning planes at the airport for less than half the salary he was earning a year ago.

Now he needs a $2,500 loan on his watch -- a Movado Fiero with a diamond bezel -- to pay his mortgage note.

"I want to help," said Mr. Leonard. But unlike Rolex and a few other brands, "there's no market" for Movado in his pawn universe.

The young man, who didn't wish to give his name, left the store disappointed. "I'm not sure what I'm going to do," he said.

Typically, pawnshop customers have a household income of about $29,000, according to Dave Adelman, president of the 2,400-member National Pawnbrokers Association. But operators around the country say they are seeing a surge in new activity fueled in part by a different clientele: middle- and upper-middle-class customers facing ravaged stock portfolios, tightened bank credit and unexpected layoffs. In areas dogged by high unemployment and foreclosure rates, the pawn business is especially robust.

Rick LaChappelle, owner of four pawnshops in Maine, calculates he has lent about 33% more money this year than last. "The banking industry is not giving out any money right now," he said. "So people are relying on second-tier lending institutions."

While some pawnshops -- like Beverly Loan Co. in Beverly Hills -- have discreetly served the wealthy for decades, more stores, such as Society Hill, are newly awash with furs, diamonds and other baubles from the bubble. At places like Society Hill, transactions are up by as much as 40% in recent months.

Even Beverly Loan has seen a shift in customer patterns.