Fear and Loathing in Consumer Debt

by Greg Silberman of Atlanta Capital Group, 2/26/18

My ancestors escaped the steppes of Russia in the early 1800s.

At first it was a trickle and then by late 1800’s it was a flood.

They essentially escaped the marauding Russian Pogroms with the clothes on their backs, a hope and a dream for a better life.

Some came to the USA,

Others to Western Europe.

Some chose to stay in their homes and have been lost to history.

And some, my lineage, steered course to Southern Africa.

Their rights to property and freedom, long challenged, had caused my ancestors to learn the importance of movable property and transportable skills.

The skillset that came on that ship from Lithuania to Zuid Afrika was that of Meubelar -- furniture maker.

Handed down from great great grandfather to great grandfather all the way down to my father. But alas, not to the sons. We preferred technology, trade and commerce.

However, I did grow up with an appreciation for furniture making.

The smell of Teak hardwood, the expensive kind imported from the Far East.

And fine upholstery from the English manufacturers such as Parker Knoll.

During my public auditing days I was exposed to many furniture and consumer goods franchises. I quickly came to learn that the money was not in the ‘goods’ themselves but in the financing.

For low creditworthy buyers, the company financing was usually the most expensive and only option available. Underwriting, loan loss reserves, collateral and egregious rates were terms I became familiar with.

Given that backdrop the news of the largest corporate fraud in South African history recently caught my attention.