A counterintuitive story in Monday's Wall Street Journal suggests that the bloom is off the rose for publicly traded pawnshop companies. Normally you would expect pawnshops to rake in the family heirlooms when the economy goes south, but today's pawnshop chains are part of sprawling corporations that tend also to do a lot of business in the payday loan sector. And when times get tougher, payday loan customers tend to default on their loans. Adding insult to injury, a growing number of states are cracking down on the proliferation of predatory loan operators.
But in a rare moment of Wall Street Journal bloglike snark, Leslie Eaton's article closes with a kicker that has just a whiff of class warfare:
If pawn brokers post big losses on payday loans, they may really understand how their cash-strapped customers feel.
Really? Will slumping share prices send the CEOs of Cash America International and EZCorp Inc. down to the local pawnshop, gold watch in hand? One suspects they would be more likely to sell off their vacation homes, or cancel the next $50,000 worth of interior redecoration, before they find themselves standing in line at the payday loan center.
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