[Groty]

I spent a little time going through the 10Q. I agree with Scorpion Man. The credit trends are alarming. Finance receivables increased about 17% year over year but delinquencies increased almost 60%? That's fishy and may indicate a relaxing of underwriting discipline to grow the loan book. The other thing that suggests competitive pressures are increasing, possibly causing management to relax underwriting standards, is that dealer discounts declined several basis points year over year.

What's really spooky is the economy is still perking along at over 2% growth and unemployment is only 4.5%. It seems likely the economy will slow even more over the next few quarters. That should cause the unemployment rate to tick up (which is what the FED wants in order to contain inflation). If unemployment picks up, it's reasonable to expect the credit statistics to get even worse. If I were you, I'd try to get my hands on NICK's credit agreement to understand the covenants and how tight they are. At the end of September, they had a maximum of $13 million of unused capacity on the line (subject to a borrowing base), and you want to be comfortable they have access to it if the credit statistics continue to weaken.