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>the main reason for asking is that if large percentages of Amazon's growth can be attributed to a rise in consumer debt, then wouldn't Amazon be disproportiona
by aphextron 10y ago
>the main reason for asking is that if large percentages of Amazon's growth can be attributed to a rise in consumer debt, then wouldn't Amazon be disproportionally damaged by another recession and/or some sort of debt bubble burst?
It's not quite the same thing. The majority of the blow in 2008 was from subprime mortgage lending. High levels of consumer debt are not necessarily a bad thing in general. Particularly for Amazon, you're talking about short term revolving credit. They are not financing big ticket long term payment plans like a mortgage. Thus their exposure is minimal.
- sokoloff 10y agoThe concern is not that Amazon has direct credit counterparty risk, but rather that if a dramatic credit contraction happens that Amazon customers will see a sharp downtick in credit availability and thus spending power. Said differently: if many of your customers are using credit to fund their purchases and credit dries up, you can be screwed.