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Andrew Ross Sorkin on meme stocks, bitcoin, SPACs, antitrust, and Elon



The following Is a partial transcript of Big Technology Podcast, edited for length and clarity. You can listen to the full episode on Apple Podcasts, Spotify, or your app of choice

Andrew Ross Sorkin is the co-anchor of Squawk Box on CNBC, founder and editor of Dealbook at the New York Times, and the author of “Too Big To Fail.” He joins Big Technology Podcast to discuss the wild state of the market, the rise of meme stocks, along with bitcoin, SPACs, Big Tech antitrust, Elon Musk, and when the party will come to an end. 

Alex Kantrowitz: Andrew, welcome to the show.

Andrew Ross Sorkin: Thank you for having me. I am a longtime fan and listener, first time on the show. 

What’s your sense of the market’s rationality right now, or lack thereof? 

Well, we have to break apart what we’re describing as the market for a second. There’s one part of the market that is this meme stock driven explosion, and that is something unto itself. Then there is the market excluding all of that. And then there is this thing we’ll call the “real economy” over here. They’re all potentially interrelated, or you’d like to think. 

The stock market unto itself — meme stock excluded for a second — there’s lots of excitement still about where we are, but you’re even starting to see what they call, “the great rotations,” or people moving out of technology and into travel, because they think everyone’s going to travel again and all sorts.

That seems at least rational. And we can debate about whether there’s going to be more infrastructure spending or what the Federal Reserve is going to do. But what’s really caught everybody’s excitement or the meme stocks, the AMC apes and the GameStop hysteria. And don’t forget Bed Bath & Beyond or some of the others that are completely and utterly divorced from reality, Alex.

It’s a bunch of people who have an idea, I don’t the idea is about fundamental investing, it’s about demonstrating that they can push up the price of a stock. I hate to use the word manipulation, and people will get very angry if you put it in this context. But I think there’s a group of people who would like to press the price of a stock up. And you’re seeing it in this very unique social media enabled, mobilized moment.

Some of those people are doing it because they actually believe in the stock. Most of them are doing it to prove something. Other people are doing it, hopefully just to make a lot of money because they think they can ride a wave. There’s a lot of elements to this.

There’s an argument that this is totally normal, that all stocks are traded on momentum and stories. And so what if a GameStop, or what if an AMC, is traded on a story? People are only getting mad when it’s the common person doing it versus traditional investors. What do you think about that? 

I don’t buy it. I just don’t buy it. First of all I would love the “little guy,” I even hate that phrase, to be wildly successful and to beat the man. I would love that. I’m not even sure that’s what’s even happening here. But there is, I think a distinction between what’s happening in this meme stock era and the frankly blatant manipulation that happens — to the extent that we’re going to call it manipulation — in the market via institutional investors. And the biggest distinction I’d make, is that one group, the professional investor, typically knows what they’re doing. They understand it, and they understand the risks of it. If you spend enough time on Reddit — and for better or worse, I do — there are a lot of people that don’t really understand what’s going on at all.

There’s a lot of misinformation. There’s a lot of people who don’t even believe information that’s factual in front of them. This financial moment’s almost become politicized in certain ways. And some of the things that we’ve seen in politics over the last four or five years, it’s come to the market. And so I worry about that and I worry about the people who have frankly, a lot to lose. And that’s why we’ve always, as in we, as an industry, the media, but hopefully the laws and regulations that are in place have always been about trying to protect the smaller investor. 

What’s so unique about this moment, is that a lot of those smaller investors are saying, no, no, no, those laws you say work in the media, they don’t protect us at all. In fact, you’re not protecting us, you’re protecting the man. You’re protecting the establishment. You’re protecting the big guy with all of those laws. And you’re preventing us from having the opportunity to make money. And to some degree they’re probably right. They’ve actually hit on something. Some of those rules and laws and maybe even the way we approach it, do prevent some of them from buying some of those lottery tickets and winning. 

But I think, or at least I want to think, unless my head is not screwed on straight and I’ve got this totally wrong, I think it’s also about protecting them on the downside. And it’s almost impossible to believe that the downside won’t come.

The other counterpoint would be that GameStop has actually stayed pretty high. I’ve been surprised at how high it stayed. Who knows if AMC is going to drop given the current levels? So maybe the joke really is on the short sellers…

Well look, maybe it is. Maybe it really is and you’re right. Look, there are people who believe that Ryan Cohen who’s now been installed as the chairman and the new team, most of whom come from Amazon are going to reinvent the company. And maybe this is a venture capital bet that these folks are going to somehow totally reinvent this thing in ways that we don’t even know. Whatever they would do to get to the price that we’re at now, it would almost have to be a completely different business. It would have to be transformed into something that looks almost nothing like what it is today and maybe that’s possible. Now, historically public market investors have not made those types of bets before. That’s the place where historically venture capital has made those kinds of bets or maybe private equity has made a turnaround bet.

Maybe the argument in this case is, look, those kinds of bets in these private areas where typically the public can’t participate, we want to participate. I get it, I get it. There’s an element of it, which I admire greatly, but there’s also a piece of it that I think is at minimum nerve wracking. 

One other thing, I think there’s a distinction between what you’re seeing GameStop. I don’t want to say I see it, but I understand it. AMC, for example, though, I think is a completely different-

How so? Because they’re not sticking it to the shorts it’s just all speculation?

Well, it may very well be sticking to the shorts. But you look at the secular trends in the theater business, in the film business, before we had the pandemic and then are we going to believe that somehow the secular trends are going to be even going the opposite direction after the pandemic? I don’t think anyone’s making that argument. Nobody’s making the argument that Adam Aron who’s the CEO of AMC is planning to somehow magically transform the company. He’s not saying he’s going to transform the company, right?

Adam Aron’s not claiming he’s going to do anything different. In fact, the only thing that Adam Aron is doing, is to some degree and I also admire this, though I think it creates all sorts of questions….

He’s winking at the investors and saying, keep on going….

Keep on going. And by the way, at the same time, I don’t want say he’s taking advantage of them, but if they’re taking advantage, he’s taking advantage by selling shares to them at prices that I think he knows full well are vastly overvalued. And so he’s taking that money, using it hopefully to pay down debt and maybe put the company in at least a better position to not fail, but is he putting it in a better position to have great shoot the moon success? I’m not sure that’s his plan.

So where does this go? Does every CEO, all of a sudden need to have a meme strategy where they do an AMA on Wall Street bets and try to corral all these retail investors?

I think there’s a whole world of CEOs who are saying, oh my God, could this happen to us? How’s this going to work? In some respects, there’s an argument to make, this can’t really happen to every company out there and especially massive large companies. It’d be very hard for a retail base of investors to move the stock of an Apple or a Walmart or an Amazon in this way. 

What made these things attractive was both the short interest, I don’t want to say the small amount of volume, but these were smaller companies. By the way, now they’re big, big, multi, tens of billions of dollar value companies. It’s possible at some level, this can happen. I don’t want to say that nobody’s susceptible, but I think there’s a range of company with a valuation and a perspective around these issues around what the short interest is like, for something this to happen and be attractive to this group.

Yes, but big stocks can also be a story company. I started to think about this and I don’t think it happens unless you start to have some of the stock market unhinged from the fundamentals to begin with. And that’s when I start to think about Tesla, which is a real story stock. I guess Elon can do it on a scale because he’s Elon.

But that’s the argument. I think a lot of people would say, look, look at Tesla, that was a story stock and people believed and look at where it is now. And so why can’t that be AMC? Why can’t you will the valuation — not just the valuation, but the success of a company into being, simply by getting behind it and getting behind its stock and effectively giving them the opportunity to raise so much money that they can do these things? That is possible. 

By the way, there’s an intersection here probably with crypto and bitcoin. That was a bit of a belief system. It is a belief system. And 11 years later, people still believe. So, yes, if people decide they’re going to believe in AMC for the next hundred years, and they decided they want to keep giving Adam Aron money, maybe this can end spectacularly.

Let’s think about what’s going to happen next. You’ve said that either this type of manipulation — or whatever you want to call it — is going to be regulated or they’re going to prove that the whole system is broken and cause some lasting changes. So what could that look like?

There’s two possibilities, probably relatively binary. One is that Gary Gensler at the SEC decides that he’s going to crack down, for lack of a better word or phrase, on this trading. Either he’s going to regulate what can be said on social media platforms about stocks, try to prosecute some of the people that have been involved in these things online. I don’t know if a good case or bad case, I don’t think by the way, it’d be a particularly popular case to be made. But could you subpoena some of these individuals’ emails, have them talking about how they don’t believe the stock is worth anything,  and that they’re trying to manipulate the price to push it higher. And they actually say that in email. And could you bring a case against them and make an example of them? Yes, you could.

And then how would that change the dynamic? Would it force Reddit and other social media sites to put in different procedures and things? Maybe in the same way that you’re seeing Facebook and others try to deal with misinformation or disinformation in the world of politics. That’s when it could get interesting on one side of things. 

The other side of things is if they really succeed, they could effectively break the markets as we know them. One of the things that’s so interesting is if you own the Russell 2000, which is an index, passive index, it’s actually doing quite well, almost spectacularly so. Why? Because AMC and GameStop are part of it. And so you could start to do things to the market that divorce it from reality. I don’t know where that ultimately goes.

But again, by the way, at some point everything’s not going to go to the sky, something will go wrong. And when things go wrong, lots of things typically go wrong. That’s when I think the divorcing of everything will come into play.

I think it will be also tough for the SEC to start cracking down on this trading in particular, even if there are people that are manipulating on the backend, because they will face a backlash.

There are two issues. One is Gary Gensler is a different person than Jay Clayton, who’s the former chair of the SEC. Gary’s just got into this role. I think he’s going to want to put his stamp on this agency and make a mark. I do. And so I think it’s almost impossible to believe that he would have done something already in any real way. I’d also remind your listeners, and it’s such a fabulous story, if you can go back and Google it and find it. Michael Lewis wrote a piece, probably 20 years ago, this is after the dot com bubble burst, about an 18 year old kid that the SEC had actually prosecuted. Or I should say sued, because it’s not a criminal case, for effectively manipulation using chart boards and the like to push stocks, and they won.

And so could he go after some individuals? I wouldn’t be surprised if he were and I wouldn’t be surprised if he even went after an Elon Musk. I wouldn’t be surprised if he tried to go after some of the higher profile people involved in SPACs, just to make a point.

The order of operations on that is going to be important. Because if you go only after the folks involved in this retail trade — and I know there’s lots of implications there — and you leave Elon and you leave the SPAC guys alone, you could have a problem on your hands.


Let’s talk a little bit about another speculative asset — although I’m going to get in trouble for saying that — bitcoin. When I hear you talk about bitcoin, you seem somewhat amused, and pretty skeptical. Where do you think the freight train is heading on that front?

On the price, I have no idea. I think there’s now a considerable group of people who believe in the idea of bitcoin. I’ve been fascinated by bitcoin, probably since about, I’m trying to think. I met Brian Armstrong, who I remember trying to convince me of bitcoin’s benefits. Had I listened to him, I’d probably be in a different profession right now, back then.

Did you buy?

I did not, I did not buy.

You like to ask guests, whether they own. Do you own bitcoin?

It’s a great question. I do not own bitcoin. And I will also say as a journalist, I was always skeptical of whether I should or could. I don’t own stocks as you probably know, because that’s a policy that we’ve long had and because of the information that oftentimes I’m privy to sometimes in the reporting process. I own mutual funds and things like that, but nothing beyond that. I always didn’t know, does bitcoin count as a currency? How would we think —

It’s so strange in terms of what it actually is.

It’s funny because my kids now, now that it’s become a mainstream thing, it might even be a bit of a currency. Maybe I’d feel more comfortable owning it. I don’t know. My kids, I have two 10 year old boys and a four year old. The 10 year olds are trying to design NFTs and to also buy NFTs, for like $4.

Not $69 million?

Right. Not Beeple… but they need Ethereum. So we need to get a wallet for them, so they have Ethereum. This is all of a sudden very interesting. Can you really own Ethereum? It’s getting complicated quickly.

I like how you asked Francis Suarez, the mayor of Miami, a former guest of this show, whether he owns. And he said, yes. I thought there were two really interesting things about his answer. First of all, he’s the bitcoin mayor and he bought in mid to high 30s. He’s probably underwater right now. And second, he flat out said, the reason why he bought was because he bought it as a hedge against inflation. What did you think when you heard that?

I thought that was the right thing to say, if you’re the mayor of Miami and you’re trying to become the mayor of the crypto capital — if it becomes the crypto capital — he said the words he was supposed to say. I imagine he bought it because he wanted to play with it. I think he imagined he bought it, so he could say that he had bought some and believed in it in the same way that he’s trying to do this for the city. 

I have been somewhat skeptical of the argument around inflation. I think inflation is real by the way, but around whether bitcoin becomes the standard? It may, it may not. To me the whole thing is so hard to figure out. And maybe that makes me too skeptical of it. I think it could have some success. I just don’t know if it’s really going to turn into a currency. I don’t know what happens when there is regulation.

For the first time, we just learned that there’s a couple of companies that are going to start working on 401(k) plans to allow you to put crypto into them. I think all of a sudden that’s going to force the issue for regulators to figure out what they’re going to do.

People are betting their retirement on this stuff…

And once you get there, okay, so now are you going to say there has to be a know your customer, what’s called the KYC policy around bitcoin, anti-money laundering, implementations in the same way that banks have? If you actually do that, then what does that do to bitcoin? You can’t have a private wallet. All of the benefits of bitcoin disappear very quickly. I think there’s that. I also wonder about the environmental piece of it. I know there’s lots of people who are now arguing that somehow it’s going to be an improvement for the environment over time.

The water is pretty muddy on that front.

Look, I think long term we will figure out how to mine bitcoin, and also just create electricity. Of course hopefully more cleanly. That will happen. But if you were going to create a new currency in this day and age today, you would think you would try to deal with how much electricity is used, whether it has KYC, know your customer information, except, but that’s the virtue of it, by the way. Some people say that’s the virtue. It takes a lot of electricity that makes it creates value, imbues it with value. And of course the fact that it’s anonymous also imbues it with value.

Talking about the inflation, I don’t agree with Francis Suarez that bitcoin a good hedge on inflation. But, from my perspective, it’s increased so much because money has become somewhat meaningless to lots of folks recently…

There’s a lot of money floating around. And the question is, when the music stops and the music will stop, is bitcoin somehow completely not correlated to everything else? I have a hard time believing that, but there’s clearly a lot of people who spent time in the month of June in Miami, who believe it.

I think the bitcoin Miami emails have finally tailed off in my inbox. I don’t know about yours.

I’m still getting some.

When does the music stop? Is it when the Fed raises the rate in some way, or how does this party come to an end, not just bitcoin but economy overall?

The only lesson I feel I learned writing “Too Big To Fail” and reporting around that crisis, and now really trying to understand financial crisis as a phenomenon is, every financial crisis is really only a function of one thing, it’s too much debt, it’s too much credit leverage in the system. 

You can have as many bad actors as you want on the stage doing as many bad things on the stage, as you could imagine. If you think that the SPAC people are being irresponsible and you think that the SEC is not minding the store, you can name whatever you think is bad. It doesn’t really matter unless there’s too much leverage in the system. And so the question is where that leverage is today. It’s not at the banks. And so the question is, is it somehow levered into crypto? Is this, quote unquote, shadow banking system, Is that where the leverage is?

Even the phrase “too big to fail,” back in 2008, we talked about it in the context of banks. Today, we talk about cities, municipalities, states, countries that are too big to fail. Think about the amount of debt that we took on even during the pandemic in the United States, let alone every other country in the world. That’s what I really worry about long term.

What do you think is going to be the implications of taking on all that debt? We did, what, $6 trillion in stimulus in the year?

The benefit of a government taking on that kind of debt on a company or a bank is, you can keep printing money. But as you keep printing money, you devalue your currency and you have inflation. That’s I think what ultimately happens, the question is if every other country is doing the same thing at the same time, you could argue, maybe it doesn’t matter. I think that’s the MMT theory of life. I wish I knew the answer.

To bring it full circle, it seems like it’s a great time to be in the money and in the right places but an awful time…

Goodness, if you can own assets, if you own property, if you own stocks, if you could just own anything right now, at least it appears that that is the winning ticket at the moment. If you’re renting it is probably…

Renting and a wage worker.

And a wage worker. It’s a hard place to be. It’s a very, very hard place to be. We’ve seen it in the movie and the divergence keeps getting worse.

I worry what’s going to happen to the country, because you will have a very distinct, we already had a distinct set of winners and losers, and now we’re going to have a much more distinct set of them.

I think it will then play into the politics

No doubt.


Let’s talk about something more uplifting, SPACs. I really had just one question written down about SPACs: Legit or scam? 

The answer is actually it’s not binary. I actually think SPACs will be around for a very, very long time. I think there’ll be a feature of the market. By the way, they were a feature of the market for years, they were just a dark corner and people did think they were somewhat shady. I think that this SPAC phenomenon we’re seeing is probably going to be long term, actually a good thing for SPACs. In so far as they’re going create more regulations and other policies and better practices around these things, so that they’re not effectively backdoor ways for companies to go public that shouldn’t be public. That’s the issue. Right now, it’s a backdoor. It’s oftentimes a backdoor way for a company that has no business being public, to be public without going through the rigorous process of an IPO.

That’s I think the issue pushed by, quote unquote, sponsors who really have no interest in actually hanging around the hoop at all and actually investing in the company but making a quick buck. That’s the problem. I think longer term, you’re going to find more SPACs with more reputable sponsors, and that’s not to say that the current sponsors aren’t reputable, there are some that are, and some that aren’t, that we’ll have more attractive pricing and more attractive transparency around what they’re doing. And then it will become just another way for companies to go public. But I don’t think we will look at it as askance we are now. And I think we’re looking askance today rightly.

Yup. As a kind of an inside baseball question, but did you read Charles Duhigg’s story on SPACs and Chamath?

On Chamath? I did, of course.

What did you think about it?

I worked with Charles for many, many years. He’s a great writer. I thought he did a great job with the piece. I think Chamath’s an interesting, complicated, brilliant guy, who I think skates close to the edge, no question. I think 20 years from now, he will get credit as the SPAC king. But the question is whether that will be good credit or bad credit. I’m not sure what the answer will be. 

I only say that because I think if you’re, as we were talking about before, if you’re a Gary Gensler and you’re trying to make your mark and you look at the SPAC market and you think that it is not being done above board, a lot of these SPACs are presented in the best light always.

I’m sure that if you subpoenaed the emails, you would find lots of these sponsors, maybe the Chamaths of the world, and people like Chamath who are emailing each other. And clearly they have projections that are not great and projections that are great. And if you go out and make only great projections, but you not only acknowledge other protections, is that a good case to break? Maybe it is. I don’t know, but I think that that’s the thing that you could see.

All these things that we’ve talked about meme stocks, bitcoin, SPACs, I like the way that they work in theory. They are a way for the everyday person to get in on, for instance, the value of the IPO or rising currency or momentum stock before the institutional investors get in there.

Look, I love the idea of democratizing finance. What I find so strange is the people who say they’re trying to democratize finance, seem to do such a lousy job of actually trying to protect the people that they say they’re democratizing it for. I would feel totally differently about SPACs if the SPAC sponsors were out there saying, look, we want to give you an early opportunity to get in now, but here are really all of the issues and problems and conflicts and everything else, that are involved in a very easy to digest way. Why don’t they do that? For obvious reasons they don’t do that.

Half of it is grift.

Right. But that’s the issue. I think that there’s a lot of these things, same thing with the meme stocks, I would love if the people who were really out there promoting this stuff on Reddit, didn’t just explain what they were doing, but said, here are the risks. I don’t know what’s going to happen here. This is a theory. You don’t see that. I think Robinhood, by the way, has done a tremendous job of creating a product that people want to use. But most of them, unfortunately, even though they in the terms of service, don’t understand that there’s this payment for order flow issue that effectively some of the money that they could be making effectively is getting paid out to other financial firms and that’s how Robinhood is getting paid. I guess journalists are supposed to be professional skeptics, but that’s where my skepticism lies.

And I think it’s fair skepticism. All this stuff is nice in theory. We probably need some rulemaking in order to make sure that people can really share in the wealth and don’t end up getting hammered by the downside.

Look, I hope everybody does really well. That would be a great outcome.

Big Tech antitrust is one of our favorite issues to discuss/debate, so let’s jump into that. First I want to hear your personal story. I saw you hint at it on Twitter and I want to hear the full deal. Your father was an antitrust litigator? 

That’s what he did. That’s what he did for a living.

You grew up talking about antitrust cases around the dinner table?

All day long. My father was an antitrust lawyer in New York city and that’s what we talked about. We talked about whether mergers should go through or not, how to define a market. We talked about dumping cases when foreign companies were arguably dumping products in the United States at lower prices. That’s an antitrust issue. I loved it, frankly. We had debates about Microsoft for years. Should the browser be connected? Should it not be connected? Is it-

Which side were you on?

I went back and forth. There were certain evidence that was presented, I was a believer at one point, I do remember thinking it was an ecosystem and actually that the ecosystem mattered. I remember going back and forth about that with him a lot. Anyway I love a great antitrust debate, so let’s go for it.

Okay. So Apple.


You don’t think Apple is a monopoly.

I don’t think Apple is a monopoly in the way it’s being argued in the construct of the Epic case clearly. And probably more broadly I don’t think it’s a monopoly either yet. Remember that there’s two pieces. One is, the other thing I remember learning as a child is, being a monopoly unto itself is actually not illegal.

It’s the maintenance of a monopoly.

It’s what you did to either become a monopoly or to, quote unquote, maintain the monopoly, as you just said. And so, in the context of the Epic case, for example….

Just for context, Epic is the maker Fortnite. Epic sued Apple, because Apple was charging this 30% tax on payments in its App Store. Epic didn’t like it, got kicked off the App Store, and sued Apple. 

To me the lesson I learned from my father many years ago is, when you think about any type of antitrust suit, you first have to think about the market. What is the market? In the context of Epic suing Apple, I’ve never thought that they had a great case. I thought that there were other companies that could probably bring a stronger case, because most of Epic’s market, if you will, doesn’t even exist on the phone, that’s not where the majority of the people that are even playing Fortnite. They’re playing it on console. They’re playing on computers. They are playing in other places. Arguing that Apple is somehow a monopoly, is doing some disservice to them. I think once you define the market and say that they’re not a monopoly in the context of Epic, everything else goes out the window.

Look, there are lots of things that came up during that trial, because I listened to it every day on YouTube. I was fascinated by it. There were some very unattractive facts that were brought forward for Apple’s purposes, not necessarily in relation to Epic, but about how they keep a walled garden and what they’re trying to do. All of that. I wouldn’t sit here to defend Apple in that regard. I would just say in the context of the Epic case, I think it’s a very tall hill to climb to win that case. I also think it’s very hard, even in a more broadly to claim that the App Store unto itself is monopolistic in so far as it’s very hard to say that Walmart is a monopoly.

If you have your own store, what you sell in it, you typically don’t have to open up your store to others. It’s a very unusual thing to ask for. I’ve always been surprised in a way by the resistance from, I understand why developers would like-

More money.

Lower fees, no question. But this isn’t a false inducement case. There are cases a company, a store might say, please make a product for us and we will give you a certain percentage of the sale, or we’ll take a certain percentage of the sale. They bring you in at 5% and then 12 months later, they jack the price on you, right? That would be a problem because you built a product for a specific thing and then they’ve changed the terms on you. In fact, at Apple, the terms have actually only gotten better, right? First of all, they’ve either been in 30% or in some cases they’ve since come down. It’s not like everybody who was developing for Apple didn’t know what the arrangement is. People forget that every developer is developing for Apple.

It’s a little bit if you were an auto maker and an auto supply maker, you said that we’re looking for steering wheels for this car and you will make the steering wheel for this car. And then the auto supply maker decides to make a steering wheel for this car and then decides they don’t like the deal.

Okay. It is a little different than that.

That’s kind of what’s happened here. I’m not so sure.

Because you’re talking about the way to get to people using phones, that’s become the internet in the large part.

That is actually to me the most interesting piece of this. At some point you can just make a public policy argument, which is a case that the government would have to bring, I think not an individual company. The government could bring. It really is a public policy issue, which is to say, at some point, do you decide that it’s somehow bad for the economy, for a company to be of a certain size and scale? I’ll give you a great, by the way example of this. After the Baby Bells, after the bells are broken up, this is in the, I believe the late 70s, early 80s, there was a fascinating case, where there were third party companies that may telephones, the physical telephones and they weren’t allowed to connect into the Baby Bells networks. It was called, it was an interchange business. Because Baby Bells said, you have to use our physical phones on the network.

And a lot of those third party companies sued and they lost individually, but then the government brought a case and they won. And so I think that that’s to me the larger piece of it. Again, there is a public policy question, and I don’t know the answer, but I also don’t know if you broke it up. I’m not sure what the solution would be, because I do think that the reason why you buy an iPhone, the reason I buy an iPhone is because I like it the way it is. I do actually. I don’t think I’d be happy if it was the wild west, otherwise I’d buy an Android.

That definitely has something to do with it. It’s also, they get you locked in on the ecosystem. If you started using an iPhone before Androids were good, you’re stuck there. Now, you’re going to break all your group messages if you go Android and it’ll appear as a snot green bubble.

I also think by the way, what people don’t appreciate is, what do you think the implication would be if they won? Let’s say there was now multiple App Stores in the iPhone. What happens? It just means that the hardware will get more expensive.

Okay. That’s a good point.

It’ll get passed on to you. That’s why I think there’s some interesting dynamics that are often not thought about thoroughly in the public policy.

Do you think could raise the iPhone price and still sell the same amount? It’s pretty high right now. Could they go to $1,500 or does that make switching become more appealing to people, given that Android’s really improved? There’s got to be a ceiling.

I’ve always thought there’d be a ceiling for them. This goes back to meme stocks a little bit. The world is a little bit divorced from what you might think is completely realistic.


Look, maybe for the highest end phone, I think there will come up on a top I would imagine, but I also think they could probably manage to create cheaper phones, but more middle tier phones and build the premium effectively into that.

Also the whole reason why they’re so adamant about this stuff, is because they realize people are going to hang onto their phones for longer. It used to be an upgrade every year, every other year. Now you can hold onto your phone for four or five years. They need that App Store revenue in order to be able to justify their $2 trillion valuation.

Right. By the way, you could also decide from a public policy perspective that it doesn’t matter that Apple has a $2 trillion valuation. That shouldn’t be part of the calculus. The question is if there was a lower price, where would the value go? That’s the other question, by the way, I think, which is to say, would that value really gets spread out? Would it just go to those other companies? Is that a better answer anyway? I don’t know the answer.

We’ve talked a little bit about Apple’s 30% App Store tax. Do you think Apple should be able to prohibit app developers from telling people they can go pay for services for less money on the web?

Now you’ve got me in a very tough one, because I’m a total free speech believer and you know I think people should be able to say whatever they want. But I also recognize that the business model comes undone effectively if everything goes off pieced, if you will. I don’t know. I don’t know.

There are five Big Tech bills in Congress. One of them explicitly prohibits companies from preventing app developers from telling their users they can get the services cheaper elsewhere, What do you make of that?

I think they will do something. I just don’t know how far it’ll go and how big of an impact it will have. Do you remember, and I got to go back and look, the result, there was a case against American Express because they had terms of service for merchants that were not allowed to say, you couldn’t offer a better price. If you accepted American Express, you could not offer a better price to MasterCard users or Visa users. And you can not advertise that extensively. The idea was there was a higher transaction fee with American Express. I believe and I got to go back and look at this, American Express, I thought originally lost the case and then maybe won afterwards on appeal. Unless my memory is not capturing that right. I have the computer in front of me. So maybe we’ll look while we’re talking. It’s fascinating.

We have cases against Facebook and Google from the FTC and DOJ, and then investigations going on with Apple and Amazon and those two regulatory agencies. What’s your gut? Do you think that these companies are going to be broken up? 

Well, I think it’ll be company by company. Look, I think it’d be very hard for Amazon, for example. I think some of the things that we’ve read over the years around what’s happened with some of the third party merchants and building product effectively to compete with them and using some of that data. I think there’s going to be rules, regulation, and enforcement around that that’s going to make that thing very difficult. [Do] I think that Amazon unto itself is going to get broken up? I’d be very hard pressed to see that really happen.

It’s tough to do also.

Very tough to do. [Do] I think Facebook will ultimately get broken up? No, I don’t. And part of that is because the other element of this, and this is the thing that I do believe, even though I know we think there’s no competition. if I had said Alex to you, if I had just looked at you and said, TikTok, three years ago, you would have looked at your watch. Right?

It’s true.

That’s what would have happened. And so if you go look at the top 20 largest companies in America, 30 years ago, and you look at the top 20 large companies in America today, they’re pretty much all different. They really are. And then of course, the question is 30 years from now, will they be again? And that is the fundamental question, but I am a believer in innovation. I am.

I think we all know that AMC and GameStop will be the top two companies in the economy.

Given how much money is going to be thrown at them. Tesla is going to be number three, is that what you’re saying?

Depending on if Elon is in jail or not.

Ooh, wow. The gloves just came off at the end of the podcast.

That’s right.

Do you really think he’s going to jail?

No, probably not, but you never know with that guy, he’s unpredictable.

I’m one of those believers and, I can’t claim to have made up this phrase, it might have been Jason Calacanis or someone, who said, betting against Elon is like betting against humanity. I kind of believe that. I don’t agree with everything that Elon does at all. And I think he’s done lots of things that I’ve just frankly disagreed with. I think I marvel, I do marvel at what he’s been able to do.

I give him credit, especially the stuff he’s done with Tesla and SpaceX. I’ve been fascinated with this whole space race that’s going on between him and Bezos. I think the fact that both of them are in it is going to make it even more exciting, because you never bet against a billionaire’s ego. They’re going to put everything they have into one upping the other.

But is all of their wealth going to be taxed, such that they won’t be able to do this?

What do you think is going to happen?

I don’t know if we’re going to get to a wealth tax, but I do think that there is a real question about coming up with a fair tax system. That’s the one thing that I’ve cared about for a very long time. I think it’s very important in a democracy that people feel that the system is fair. I think taxes are actually part of that democracy, and the fact that it isn’t fair, the fact that everybody knows it isn’t fair and that it’s been this unfair, I think unless it does get fixed in self, not just for the sense of fairness. So there’s the fairness issue and then there’s just the practical, we need revenue issue. But it does seem that when you look at, in this ProPublica piece, really I think demonstrated it. Some of the wealthiest people in the world have really managed to effectively never pay taxes.


And look, some of that’s because they’re giving it away and it’s a charitable contribution. And I appreciate that, but it also means effectively that everybody else, including us effectively subsidizing their philanthropy, right? They get to choose where they’re giving their money. You don’t. By the way, I think that actually oddly enough goes against people’s fundamental sense of fairness. I think that there has to be at some point, look, I’m a believer in increasing the step up basis at the end of life, I think a lifetime of not paying taxes is enough. Even if you lose the family farm, not a popular thing to say I know, but I think you have to pay it. I would deal with, I think some people Larry Ellison who live off of effectively interest, basically they take out loans against their stock and so that they never have to pay.

That was wild.

I think there should probably be a limit on the amount of interest deduction you can actually take. And I very unpopularly would probably tax great philanthropy, meaning most philanthropists, including Warren Buffet or Bill Gates effectively are transferring shares, typically founder shares into either their foundations or to their charity, which means that those shares, which have created enormous value and wealth, if you will, will never be taxed, ever, when they’re sold by the charity. And so my view is maybe the first $5 million you give away on an annual basis should be tax free. But after that there probably should be some rate. Maybe there’s a special philanthropy rate even, maybe that’s closer to the current capital gains rate, especially if capital gains goes to income tax. That’s a little bit of how I’m thinking about it.

I like that, because essentially, if you’re not taxing that money, it’s going to philanthropy. What the government is saying is, we think you billionaires are going to do a better job at providing services than we are.

I would also say, look, we can have lots of debates about Bill Gates, but what Bill Gates did even during Covid actually to me proved that you actually occasionally might want a billionaire out there working on some of these projects.

I agree.

They effectively, now, uniquely though, they’re almost like nation states because they’re competing with the government, but in a way that competition was probably helpful.

I think that Gates’s work on the vaccines in particular helped push everybody forward and I’m glad to be vaccinated. I’ll say that much. But it does strike me as unfair — talking about that ProPublica story — that all these billionaires are paying less tax than Big Technology, just seems crazy. I’m struggling to make it. There should be some more fairness on that front.

After this podcast you won’t be struggling to make it, I know that. You going to be on your like, on your series C, series D.

I can’t take any investment. I think taking investment in a new media company is absurd most of the time.

You’re just bootstrapping yourself. I like it.

Bootstrapped and ad supported…

You’re creating more value for you when you go public through a SPAC.

That’s right. We’ll have to give Chamath a call after this. 

Alex is the founder of Big Technology, an independent publication that covers the inner workings of Amazon, Apple, Facebook, Google, and Microsoft. His email newsletter goes out to thousands of Silicon Valley decision-makers each week. 

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Bad Credit

Inside the Highly Profitable and Secretive World of Payday Lenders



Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.

The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”

The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.

In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders

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Bad Credit

What’s Questionable Credit and Can I Get a Car Loan With It?



Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Bad Credit

Entrepreneur Tae Lee Finds Her Fortune



By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: To learn more about Tae Lee and Never Go Broke Inc., visit and or email; you also can follow her on Facebook ( and Instagram (@nevergobrokeinc).

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