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Boom Times For American Pawnbrokers As Rich Hit Hard Times

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“I need $3,000,” Tito Vazquez, 45, says as he looks at his gleaming Harley-Davidson motorcycle. “But the economy's a mess right now and my credit cards are all maxed out.”

Which brings him here, to Collateral Lender, a few blocks east of ultra-posh Rodeo Drive, in Beverly Hills. In short, it is a pawn shop. Like most pawn shops in Los Angeles - home to not one but two failed mortgage lenders, Countrywide Financial and IndyMac Bank - it is doing a roaring trade.

For Mr Vazquez, that is not good news: Collateral Lender has so many Harleys it does not have room for any more. The manager sends him to another broker in a different part of town, where with a bit of luck he will be able to get a short-term $3,000 float using his “hog” as collateral. The state-regulated interest rate is likely to be about 7 per cent, although pawn shops have a knack of getting around this by charging other fees.

“I know I'll be coming right back for my Harley,” says Mr Vazquez, who lives an hour from Beverly Hills and needs the cash to pursue an urgent “business opportunity”. “If I wasn't coming back that would be different. I've pawned this bike a few times.”

The recent boom in America's pawnbroking business has come as something as a surprise - not least to the brokers. During the economic go-go years of the mid-2000s, the concept of lending money against items such as electric guitars, gold watches and family heirlooms seemed to have been made obsolete by 0 per cent interest rates, lax credit checks and the instant liquidity offered by the likes of eBay and craigslist.

Have the pawnbrokers here seen a pickup of trade yet?

If the wealthy are starting to have problem god knows what's going to happen to the rest of us.

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“business opportunity”

Whats the next bubble?

Flipping oil barrels?

Cocaine shipment just in.

I was wondering if legalising drugs with a healthy tax might sort out our global financial woes for a while, or is the business of clamping down on it worth more? hmmm

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