Subprime lending shares booming amid government shutdown

It seems civil servants in charge of your tax dollars are not that great at managing their own books. This is evident in the barrage of reports about how these 800,000 federal workers are living hand to mouth and are on the brink of fiscal doom.

Who knows if this is true or not? Remember that guy in 2013 who was about file for bankruptcy because he missed a paycheck?

There is one booming business that is benefiting from the partial government shutdown: subprime lenders.

From Reuters:

Shares of pawn brokers, payday lenders and other subprime consumer finance companies have rallied and outperformed the broader market since Dec 22, when 800,000 federal workers were furloughed or left working without pay.

Pawn broker chains EZCorp and FirstCash have jumped over 18 percent since that date, with no resolution in sight over congressional Democrats refusal to approve Republican President Donald Trump’s demand for $5.7 billion in partial funding for a wall along the U.S.-Mexico border.

Companies that provide payday loans and other kinds of subprime consumer credit have also rallied. Enova International , Curo Group Holding and OneMain Holdings have each surged 23 percent.

Citigroup and other banks have helped with mortgage payments, overdraft fees and credit card costs to government workers, including employees from the Coast Guard, Transport Security Agency and other government workers struggling to make ends meet.

But with federal workers on Friday missing their second consecutive paychecks, some are likely turning to subprime consumer lenders.

These workers are all going to receive back pay, but it is befuddling to think that public servants who earn more than those in the private sector are living paycheck to paycheck.