Credit to Serfs

By Ramesh Akkineni
from Whitney Tilson’s 2006 Wesco Annual Meeting Notes
Now you have the problems of the macro scene. Let’s take credit expansion. Consumer credit has expanded to levels that nobody’s ever seen before. All of these credit cards and all of these algorithms… people [meaning lenders] really want that particular customer that’s just crazy enough to overspend but not so crazy that he goes bankrupt. [Laughter] They have computer algorithms to identify these people – they seek them out with clever marketing techniques. I always say it’s like having serfs when you finally get them. They while away at their job and you’re the lord of the manor and at the end of the month they send you [the money they make]. They’ve gotten so rich that [the lenders] keep surfing for more serfs with ever more liberal credit, and so forth. That is the world of consumer credit.

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