Thursday, January 29, 2015

The working poor: a wonderful biz opportunity

What a long story which I had to read in installments. I think the writer is giving it a human interest angle to help readers make an emotional connections. The short story is that the poor are a wonderful business opportunity and the means to their pocket is the auto loan. You can drive your car to work but you can't drive your house to work. These folks try really hard not to have their cars repossessed. The interest they are charged with is easily above 20%.

Fortunately we have no equivalent in Singapore. We should never allow anything similar to be a permitted business here. You can't blame business people from getting involved if you allow them as that is the nature of business.

I don't think the auto sub prime market will become anything like the one on property mortgages that did us in.

Update: 5:05pm

I didn't shared earlier that sometime before I had read about Warren Buffett investing in auto dealerships. Now I learned that Soros is also doing the same.

There is a pot of gold here eh?


  1. Will the poor just get poorer (and high on dream of driving around with a car-on-loan, and the middle class (dreaming to get to that 1% apex) descend faster to the lower scale?
    Also here's an article recently posted - Fired Before Hired:
    How Corporations Rigged The Job Market And Killed The American Dream

  2. A market where the poor and the middle class get more squeezed is real estate.
    Toby N website has this to offer
    The London property ladder: are you kidding me?
    January 29, 2015

  3. Elizabeth Warren, Harvard Law School: [paraphrasing bank executive] If you cut out the people who are least likely to be able to pay, if you cut out the most marginal borrows, the ones who are deepest in trouble, then you're cutting out the heart of our profits, because that's where we make most of our money.

    You know, who one of the most popular customers of credit card companies is right now. People who been through bankruptcy. "The reason," as one of the vice presidents of MasterCard once explained to me, "is we know two things about them. One is that they can't file for bankruptcy again and the second is they have a taste for credit." And I said, "What does that mean?" And he said, "Well, they're willing to make minimum monthly payments forever. And that's why we make our money."

  4. All these suggest the rich business people are no different from the ahlongs. They never will lend to each other.

  5. More revelations from the land where definitely the rich gets richer - with a little help from their Treasury friend
    The Latest TARP Taxpayer Screw-Job Is Revealed Michael Krieger Jan 28, 2015