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Wall Street Journal: People Pulling Up To Pawnshops Today Are Driving Cadillacs and BMWs
By:
TraderMark
Sunday, January 04, 2009 9:03 PM
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Meanwhile, small business? Not to worry - pawn shops are for you! Cramerica - for the corporation, by the corporation.
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. (
these are the fellas we're going to give 4.5% - heck maybe 4.0% if Ben B can manage it fixed rate loans; you sucker who has been paying your mortgage the past 7 years? hahah- sorry - no soup for you
)
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.
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.
Lee Amberg, owner of AA Classic Windy City Jewelry & Loan in affluent Evanston, Ill., said he's been seeing Cartier watches, two-carat diamonds, David Yurman jewelry and pieces from Tiffany's. One client, he said, brought in a fur coat from Saks Fifth Avenue that retailed at $9,000. She told him she needed a loan to help buy private-school uniforms for her child.
Diamond Exchange USA is more of a hybrid store. In addition to selling its own pieces, it makes loans against customers' goods and purchases used jewelry too. Located on a major thoroughfare in Bethesda, Md., it has a
constant stream of Mercedes-Benzes, BMWs and other luxury cars pulling into the lot
. Virtually all of the clientele are women. Many come to sell their gold or diamond jewelry.
On a recent weekday morning, a line stretched from the front counter at Lewiston Pawn Shop. Mr. LaChappelle and his Lewiston, Maine, staff turned away many customers with less-than-desirable goods.
The end of the story has some anecdotes about small construction company owners forced to the pawn shop due to the credit crisis; hopefully by the time we give away all the pork of New Deal 2.0 (of course they promise NO PORK!) to the large corporate firms whose lobbyists are firmly implanted ... well you know... there will be a few crumbs left for the small business guys.
Anyhow, moral of the story - I'd like EZCORP to go up so any owner of EZCORP can make capital gains to help fund the bailouts of said Escalade owners. Thank you.
Long EZCORP in fund; no personal position
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