News & Resources

Desperation stocks rise as economy and unemployment falter

Jul 13, 2011 Todd Milner

Stocks and profits for short term lenders, pawn shops and debt collection agencies are rising, as these companies continue to take advantage of Americans' unfortunate economic positions. According to the Chicago Sun-Times, pawn shop operator EZCorp has seen its profits soar by 46 percent annually over the last five years. In addition, stock in short term lender Advance America Cash Advance Centers has doubled since 2010, while another company, Rival Cash American International, saw its stock swell by 64 percent over the same time period. Furthermore, the news source reports that San Diego, California-based debt collection agency Encore Capital Group reported a 50 percent increase in profits since last year, despite being subject to multiple lawsuits over the soundness of its practices. "Here we are celebrating the second year of recovery and confidence is at levels consistent with a recession," David Rosenberg, an economist at money manager Gluskin Sheff, told the Associated Press. "The folks in the survey are probably not the same folks shopping at Tiffany's." However, experts believe these stocks may not see continued success, as they worry that customers may become too poor to borrow or buy if the economic situation takes a turn for the worse, the news source adds.