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Pawn Shops are Seeing Something the Stock Market Isn’t - Video học tiếng Anh
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Pawn Shops are Seeing Something the Stock Market Isn’t
Pawn Shops are Seeing Something the Stock Market Isn’t
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0:00
Take a look at the headlines and you'd think the economy is booming.
0:03
Stocks are at record highs. Jobs numbers look strong. But that’s not the whole story.
0:08
While the S&P 500 was breaking records in early 2026, some of the smartest investors
0:13
in the country were buying businesses built around one thing… people running out of money.
0:19
And maybe that tells you everything you need to know about this economy.
0:22
Because when the rich start investing in pawn shops, they’re not betting on prosperity.
0:27
They’re betting on desperation. Chapter 1: The Illusion of Stability
0:32
On the surface, America looks healthy. Unemployment is low and wages are creeping.
0:36
The middle class is stable. But that’s not exactly true.
0:40
As of early 2026, the Federal Reserve places U.S. credit card balances at roughly $1.28 trillion,
0:47
with the figure climbing in the mid-single digits each year. That's happening while employers report
0:52
stable payrolls.Consumer sentiment is collapsing under the weight of everyday costs. Grocery,
0:57
fuel, and utility prices have outpaced wages in the middle of the income ladder.
1:02
None of that shows up in the jobs report. But it shows up in the pawn shops.
1:06
The biggest operators reported record service charges through the second half of 2025.
1:12
That trend continued into early 2026. Even foot traffic in suburban strip malls is climbing again.
1:18
But the most revealing part is what people are actually doing inside these stores.
1:22
Between 80 and 90% of pawned items eventually get bought back. That suggests most of the
1:28
customers have steady jobs and are using the loan to bridge the gap between paychecks.
1:33
You can open the The Wall Street Journal and see headlines screaming “strong economy” and
1:37
“stable labor market”. Meanwhile, in the same week, household finances are
1:41
crumbling. The paychecks are still arriving. But the cash is disappearing faster
1:46
than it comes in. So if the paychecks
1:48
are arriving, why are families pawning their possessions just to get through the month?
1:52
Chapter 2: The Invisible Outperformer FirstCash Holdings runs more than 3,300 pawn
1:58
locations across the United States, Latin America, and the United Kingdom. Over a 12 month period,
2:03
ending April 2026, the stock roughly doubled. It went from the low $120s to
2:08
a high of $227. The S&P 500 returned a fraction of that over the same window.
2:14
It's the kind of run you'd expect from a frontier AI lab or a biotech. Not
2:19
from a chain of storefronts whose median transaction is a loan against a watch.
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FirstCash reported first-quarter 2026 revenue of just over $1 billion,
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a 26% jump year over year. The pawn loans on the balance sheet hit a record $851 million,
2:35
and total assets crossed $5.4 billion. It’s the sign of a booming business.
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The company even raised their full-year 2026 outlook after the late-April update.
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That saw the stock surge higher on the news. The fastest-growing item inside FirstCash Holdings
2:51
isn’t the resale of pawned goods. It’s the loans themselves.
2:55
Not what gets sold… but how fast debt against household property
2:58
is growing. That’s what the market is rewarding. Compare that to a tech company. The growth usually
3:04
comes from new contracts or expansion into new countries. The thing being scaled is software.
3:09
Here, the thing being scaled is desperation. A $150 drill set gets pawned to cover a car
3:15
repair. Do that thousands of times across suburban storefronts, and you arrive at a margin profile a
3:21
software company would envy. It’s a steady stream of short-term loans backed by everyday items.
3:26
A chain of pawn shops is starting to look like Nvidia on a price
3:30
chart. And Wall Street has noticed. They assume the loan book keeps growing…
3:34
and that’s the tell. Because it only works if more people keep needing short-term cash just
3:40
to get through the month. In other words, the growth story isn’t about expansion anymore.
3:44
It relies on the middle-class strain continuing to show up in the numbers.
3:49
Chapter 3: The Rolex in the Suburbs The picture most people carry of a pawn
3:54
customer is decades out of date. It involves an inner-city storefront, a neon sign,
3:59
a row of dusty guitars, and a clientele the banking system gave up on years ago.
4:04
That’s not the case. The ticket sizes are changing.
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And so are the customers behind them. Employed families are showing up more
4:11
often. Women are pawning inherited jewelry. Small-business owners are arriving with Omega
4:16
and Rolex watches, while tradespeople are bringing in their tools. Some of those are worth $1,000,
4:21
and some hit $3,000 on a single visit. Today’s customers have pay stubs.
4:26
They have 401ks. But they’re still walking through that door because,
4:29
at the end of the month, the numbers don’t add up. Middle-income households earning between $60,000
4:34
and $100,000 a year now make up a meaningful share of new customer growth. Many use the loan to cover
4:40
a mortgage payment. Some small employers use it to make payroll on a Friday when an invoice is late.
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EZCORP is the second major publicly traded pawn operator,
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and its second-quarter fiscal 2026 numbers almost defy belief. Total revenues climbed 46% to almost
4:56
$447 million. Pawn loans hit $349 million. The average loan amount jumped from $160 in 2022
5:05
to $240 in 2026. A 50% increase in just 4 years. Even the jewelry scrap side of the business
5:13
rose by 64%, helped along by increasing gold Gold prices are sitting near multi-year highs,
5:19
which means operators can lend more against fewer items. A wedding band that would have
5:24
brought $180 back in 2023 might pull $320 in early 2026. The invites higher-value collateral
5:31
through the door, and higher-income borrowers have started showing up.
5:34
A pediatric nurse in Phoenix walks in on a Tuesday with her grandmother’s tennis
5:38
bracelet. She’s not in crisis in the dramatic sense. She has a steady job and a normal life
5:44
on paper. But her air conditioning just died. Her credit card is maxed out and a bank loan won’t
5:50
clear in time. She needs $400 by Friday. Across town, an HVAC contractor walks in
5:55
with a Snap-on socket set. It’s worth thousands of dollars. He needs $900
6:00
to cover a payroll gap. Nothing is wrong with his business. The timing is just off.
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Both of them end up in the same place. If people with jobs and assets are
6:09
increasingly using pawn shops to bridge short gaps, it’s not really a question of employment.
6:14
It’s a question of timing. That’s why this whole industry is growing.
6:18
Chapter 4: The Banking Desert Walk the main drag of almost any
6:22
American suburb built between 1970 and 2000, and you’ll see the facades of banks. In their
6:27
place are nail salons, pop up shops or “For Lease” signs. Where there used to be a regional bank with
6:33
a drive-through and a Saturday teller, there's a fenced-off lot waiting for redevelopment.
6:37
From 2017 to 2025, the national banking network shrank by nearly 15%, dropping from
6:44
roughly 86,000 branches to about 73,000. More than 900 bank branches closed during calendar
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2024 alone. 16 of the largest banks accounted for 800 of those closures. The 2025 figures
6:58
show another several hundred branches gone. The geography matters more than the number.
7:03
The Philadelphia Fed has found that from 2019 to 2023, the U.S. lost roughly 5,400 bank branches,
7:10
with the highest absolute number of closures occurring in middle- and upper-income suburbs.
7:15
But proportionally, the damage was devastating elsewhere.
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Low-income and majority-Black neighborhoods saw branches vanish at a significantly faster rate,
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rapidly accelerating the creation of banking deserts.
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Take a place like Lithonia, Georgia, a middle-income suburb southeast of
7:32
Atlanta. Between 2020 and 2025, branches across DeKalb County steadily disappeared.
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Wells Fargo locations closed. So did Bank of America and Truist Financial.
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The traditional banking footprint shrank. But the pawn signage along Highway 124 has not gone dark.
7:49
It multiplied. The same pattern
7:51
repeats in suburbs across the country. Banking deserts, areas without a bank
7:56
branch within a reasonable distance, grew between 2019 and 2023. And in the places that were hit,
8:02
access didn’t just disappear. It stretched. In those affected neighborhoods, the median distance
8:06
to the nearest branch increased by roughly 1.5 to 2 miles compared to just a few years earlier.
8:12
That means the nearest option for quick, in-person banking kept moving farther
8:17
away. And for a growing number of households, that gap gets filled somewhere else entirely.
8:22
The same suburban corridors that lost their last walk-in branches are the corridors where pawn
8:26
loans expanded fastest. One form of lending was pulled out of these ZIP codes at almost the same
8:32
time another form was put in. Chapter 5: The BNPL Gateway
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There’s one stop most middle-class households make before they ever reach the pawn counter.
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It doesn’t look anything like a lender. It looks like a checkout button.
8:46
Buy Now, Pay Later was sold as financial inclusion. Four easy installments and no
8:51
interest if you pay on time. It’s an easy way to spread a $300 purchase across two paychecks.
8:56
The big three players are Affirm, Klarna, and Afterpay.
9:00
Affirm alone processed more than $34 billion in 2025. Klarna now
9:05
serves around 150 million active users globally. Meanwhile, PayPal, Apple,
9:09
and even Amazon have all rolled out their own pay later options.
9:13
The space went from a niche feature to a default option in roughly 5 years.
9:18
The Richmond Fed has tracked the growth of the category, with transaction volume climbing
9:22
at high double-digit rates each year. A growing number of purchases are through installment plans
9:28
that mostly skip the traditional credit bureaus. These apps generally don't run hard credit checks,
9:33
but they do report to the major bureaus and run soft credit checks. But it still
9:38
means a shopper can stack four plans across Affirm, Klarna, Afterpay, and a store card.
9:43
The Consumer Financial Protection Bureau has flagged the pattern.
9:47
BNPL users tend to carry higher balances on credit cards and personal loans than non-users.
9:52
Late fees pile up, repeat usage increases, and eventually the household hits a wall.
9:58
When the BNPL limits get used up, and credit lines tighten, there’s one obvious place to
10:03
turn to. A growing share of pawn customers seem to be coming out of households that
10:07
leaned heavily on buy-now-pay-later first. A pawn shop doesn't report to bureaus. It
10:12
doesn't care about credit history. It just cares about the loan.
10:17
But if this is really the growth story, the next question is obvious.
10:20
Who actually owns it? Chapter 6: The Institutional Landlords
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Behind the storefronts, the ownership structure looks very different.
10:28
FirstCash Holdings is roughly 80% institutionally owned. As of February 2026, the Vanguard Group
10:35
held around 9% of the company, worth roughly $650 million. BlackRock has a similar amount. Below
10:41
them, there are hundreds of smaller investors. These are the same firms that manage your 401k..
10:47
Money is flowing in two directions at once. The same firms helping people save for retirement
10:52
are also invested in companies that make money when households run short on cash. On one side,
10:58
they manage long-term savings. On the other, they own pieces of businesses that step in
11:03
when someone needs $300 or $500 in a hurry. Nothing about that is hidden. It’s all public.
11:09
But it creates a strange overlap. The money that’s supposed to
11:12
protect your future is sitting in the same system that profits when things get tight.
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And that’s the part that doesn’t feel obvious until you say it out loud.
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Why are the biggest asset managers in the world putting billions into
11:25
a system that seems to profit when their own retirement clients are under pressure?
11:30
Chapter 7: The Yield Trap Pawn shops don’t look expensive…
11:34
until you look at the fees involved. Depending on the state, pawn charges
11:38
work out to roughly 60% to 240% APR . A typical credit card usually sits around the low 20s.
11:45
That’s not a small gap. That means a $500 loan against a
11:49
wedding band for 90 days can generate around $300 in fees and interest. A bank loan for the same
11:56
$500 over the same period? About $15. It’s the same money and time.
12:02
But it’s a totally different cost. Most items in the pawn shop - around
12:06
80% to 90% of things - get redeemed by the customer. So the collateral usually comes back.
12:12
But the fees don’t. They’re locked in.
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And that means the same customers can cycle through the system again and again,
12:19
each time paying for speed and access. There’s another advantage to this system. In many
12:23
cases, it doesn’t show up on your credit file. It doesn’t run through the same approval system. It
12:28
follows different rules entirely, set by state pawn laws, not traditional lending standards.
12:34
Put together, it becomes a very specific kind of business. It’s fast cash,
12:38
backed by something you already own. The result is a market that keeps
12:42
growing. Not because people are buying more luxury items to pawn. But because
12:46
more people are using the same items again and again, just to get through the month.
12:51
But when you look at all of this, a different pattern starts to appear.
12:54
A two-tier financial system that has been constructed while most
12:58
of the attention was elsewhere. Chapter 8: The Great Decoupling
13:02
The top 20% of borrowers still live inside the old financial system. They have savings accounts,
13:07
mortgages, credit cards, investment accounts. For them, banks still feel like banks.
13:12
But below that, something else has quietly formed. One that’s faster. That’s more expensive,
13:18
and doesn’t help you build wealth over time. It just helps you get through the month.
13:22
And it shows the divide. The executives running parts of this system don’t really talk about it
13:27
like a problem anymore. They take the money troubles of regular people and call them a
13:31
boost for the company. When they buy up more businesses, they call it a chance to grow.
13:36
The original American Dream relied on banks that actually wanted to keep middle-class families as
13:41
customers. Now, those families are viewed as just another way to make money. The system
13:46
is already set up for this, the money is already moving, and the companies are already cashing in.
13:51
Investors are backing pawn shops because the profits aren’t
13:54
coming from new products or new customers. They’re coming from the same households the
13:59
system once claimed it was designed to support. And if that’s the direction things are already
14:03
moving, the next question is obvious. What happens when the system stops
14:07
completely. Find out in “What If The US Economy CRASHES.” Or watch this instead.
