I can't believe we're going to get subprime burrito crisis. www.ft.com/content/6c4b... - ThreadSky

usili.bsky.social • 12 days ago

I can't believe we're going to get subprime burrito crisis.

https://www.ft.com/content/6c4bf393-c80b-42b7-993a-35270143f688

Comments

glennmuir.bsky.social•11 days ago

The Big Shit, if you will.

ralfthewise.bsky.social•12 days ago

Pretty sure EVERY burrito loan is subprime.

themightytrex.bsky.social•11 days ago

overheard #nocontext

aldanferrox.bsky.social•12 days ago

This just proves that this idea is not only bad for the customers, but also bad for the company.

maxthyme.bsky.social•12 days ago

I hate so much that those words in that order make sense.

octopusmask.bsky.social•12 days ago

Is this going to be like the AMC movie club thing where it never made sense and a handful of early adopters make out like bandits because they got a lot of free stuff before it was all just dropped and written off?

ijspurcell.bsky.social•12 days ago

it wasn't AMC movie club, it was MoviePass, a company that extremely efficiently turned VC money into a barrage of free theater tickets for me, personally

RIP MoviePass, you died exactly how everyone told you you were going to

rachyrachface.bsky.social•12 days ago

The very best gift my husband has ever received was the 6-month subscription I got him for Christmas in 2017.

RIP to a real winner and loser.

dewddrop.bsky.social•12 days ago

MoviePass mentioned so I must chime in to say that the very last movie I saw on their dime was Uncle Drew, the movie starring Kyrie Irving in an old man suit. Shaq and Charles Barkley are also in it. Different times 🥲

octopusmask.bsky.social•12 days ago

Imagine the absurd shit they would be able to release if there was a huge audience going to see whatever was new just because it was free.

octopusmask.bsky.social•12 days ago

It was always a good idea. Just needed to figure out the revenue balance. Making movie theaters sell booze probably could have balanced it all out.

ijspurcell.bsky.social•12 days ago

i mean, it was a good idea from the perspective of "i like movies and i like paying $10 a month to see an infinite number of them" but yeah not so much for any of the rest of it. there's a reason chains went in the direction of their own subscriptions instead

theangelremiel.bsky.social•12 days ago

This seemed appropriate https://www.youtube.com/watch?v=YBO_7UezpbY

nat20.bsky.social•12 days ago

I saw a lot of cool stuff I wouldn’t have otherwise, thanks to MoviePass. I also got a lot of the fake “no connection” messages at the theater, when they were in the process of tanking.

kernighan.bsky.social•12 days ago

I worked for Klarna, the CEO is a Musk worshiper who literally thinks that ChatGPT is an oracle and bases his business decisions on what it tells him.

cv-danes.com•12 days ago

And here they are.

twicefire.bsky.social•11 days ago

I hate that I exist in a reality where that is a paragraph that exists outside of a silly scifi book

psvrh.bsky.social•12 days ago

I have an idea on how they can save money, then.

thejoshp.bsky.social•12 days ago

So weird to base a company's decisions on because AI is the largest "garbage-in, garbage-out" programming I have ever seen in my lifetime.

kernighan.bsky.social•12 days ago

Oh yeah, he was constantly telling SME's they were wrong about something because ChatGPT told him the were wrong. And they were correct of course. Klarna had massive brain drain after that became common.

subtlefire.bsky.social•12 days ago

I could be weird and delusional for half what they're paying him. I could even be *more* useless if they want!

nichsmith.bsky.social•12 days ago

Once again, I hate that I have to have a real job when people like this get paid millions

adrianwashere.bsky.social•12 days ago

Coming soon: Chipotle default swaps

evan-tuality.bsky.social•12 days ago

I’d like to see them repossess my burrito now. They can have it.

johnnypunchclock.bsky.social•12 days ago

People were buying big flatscreen
burritos they knew they couldn’t afford

mazerat.bsky.social•12 days ago

I would eat a burrito tranche, just saying.

mayorseidel.bsky.social•12 days ago

Hegel remarks somewhere

jhoana.bsky.social•12 days ago

comment of the day here 😄

worknowitzki.bsky.social•12 days ago

Wait so should I not respond to the text message recruiting efforts I have received from Klarna? Man it seemed so promising…

essaywells.bsky.social•12 days ago

According to, I think it's para 3 of the story, their business model is to charge late fees to people with no money. Klarna give loans to people with no money, who don't pay the loans because no money, and then they owe Klarna a fee, but they don't pay it, because no money.

Is it just me or

parentball.bsky.social•12 days ago

Klarna: “I’m a loan business.”

fritzby.bsky.social•12 days ago

They forgot that one of the key components of the payday loan business is that they are their own collection agencies

kozufox.bsky.social•12 days ago

You gotta have some goons with baseball bats on your payroll to run a successful loan shark business.

fritzby.bsky.social•12 days ago

The payday lenders just do a bunch of shady shit to rack up default judgements to garnish inflated principal amounts from people's wages, but that is where they get a big percentage of their money, yeah.

joofie57.bsky.social•12 days ago

Their business model is merchant fees and risk premium arbitrage more so than late fees.

ohdeerthermos.bsky.social•12 days ago

You can tell that the people who made this have zero idea about how hard it is to collect on debt. There's a reason no one gives out small dollar loans!

ohdeerthermos.bsky.social•12 days ago

Even the invocation that users might not have money is meaningless, it's still probably not worth it to go after the people who do!

johnsmillie42.bsky.social•12 days ago

Yeah, how little do you have to pay a debt collector to make a $9 burrito loan worth pursuing?

ohdeerthermos.bsky.social•12 days ago

And that's the cheaper option. If they want to try and collect themselves it's way more expensive.

aristofontes.bsky.social•12 days ago

Yeah, but they'll make it up on volume.

malaclypse.bsky.social•12 days ago

“We’ve leveraged our willingness to adopt an unjustifiably low allowance for bad debt.”

sammysmoot1212.bsky.social•12 days ago

"We lose on each transaction, but we'll make it up in volume."

johnmcphee60062.bsky.social•12 days ago

It's kick the can down the road until they can IPO and Sequoia and Softbank can liquidate.

lonjil.xyz•12 days ago

It seems to have worked pretty well here in Sweden.

axamaqueda.bsky.social•11 days ago

Sweden has a structured system operated by the state that simplifies debt collection. It is not as simple in other countries.

guwonder.bsky.social•11 days ago

Sweden has a centralized debt collection facility with a national bailiffs authority that literally raids homes to collect on unpaid debts. It has the power to track down a lot of stuff with a person’s government identification number in the entire country.

golikehellmachine.com•12 days ago

isn’t that just a seven layer?

onthedl.bsky.social•12 days ago

4 layers, actually. Saving your stomach the rush!

danhopewell.bsky.social•12 days ago

Beefy five-tranche collateralized burrito obligation

solive.bsky.social•12 days ago

Tomatos, zero!

Lettuce, zero!

Sour cream, zero!

And then that happens!

huge-jackedman.bsky.social•12 days ago

It's like we decided to do all the worst disasters of the last 100 years as farce

andrew3000.bsky.social•12 days ago

Repo man coming by with a bucket

speedmariachi.bsky.social•12 days ago

Rolling up with a porta potty on a little trailer like they have for road workers

withapeeaitch.bsky.social•12 days ago

Yet another EXCELLENT band name. The Subprime Burrito Crisis.

kokujinkun.bsky.social•12 days ago

Subprime Buritto Taxi

zestylime.bsky.social•12 days ago

Bowling for Soup has an album called "The Great Burrito Extortion Case," maybe they can do a follow up

tusionni.bsky.social•12 days ago

banger post oonf

frontopup.bsky.social•12 days ago

This is a crisis for the takeaway market. We might need to push for kebabulative easing

dsintermediatd.com•11 days ago

that’s ok, they can hedge by selling burrito repo contracts and price them based on fertilizer futures

menger-spongebob.bsky.social•12 days ago

i thought klara was mostly for clothes and other mid-range durable goods rather than burritoes?

probgobl.in•12 days ago

They expanded to fast food purchases a couple of years ago.

dragonfountainsale.bsky.social•12 days ago

I had one of those subprime burritos last week, man I was up all night. $40 diarrhea

houseofpurrm.bsky.social•12 days ago

I'm frankly shocked that a company pioneering leveraged sub prime food purchases could be losing money.

enceladusty.bsky.social•12 days ago

Consumers treating bankruptcy like Private Equity & POTUS treats bankruptcy.

cadencecivet.bsky.social•12 days ago

Not sure if it’s the AI investment on their part or just Subprime Burrito Taxi Loans

cultofsignal.bsky.social•12 days ago

Lost 99 Million in unpaid burrito loans (how?) but it's okay because we fired Deborah from customer service so that saves us 59k/yr

ilikesportsmostly.bsky.social•11 days ago

"Customer service costs are down 12% in 1st quarter" sounds like it follows the "reduced headcount laat two years.. " but i bet the actual accounting shows the decrease in customer service costs is a revenue problem, nit a cost problem, fuckin lol.

karlrolson.com•12 days ago

I saw this coming, but I'm not happy that I did: https://bsky.app/profile/karlrolson.com/post/3lkt6bo2hik2e

somedonuts.bsky.social•11 days ago

This is why Gen Z will never be able to afford homeownership.

timeisfood.bsky.social•12 days ago

i gotta take out a fucking loan to read this article. $70/mo? jesu christo.

usili.bsky.social•12 days ago

The kicker.

burstaholic.bsky.social•12 days ago

Replace the CEO and cut costs? Brilliant!

davidevanlovett.bsky.social•12 days ago

Hey it succeeds at cutting costs*! (*Profits are just inverted costs right?)

ericcarroll.bsky.social•12 days ago

snarkysteff.bsky.social•12 days ago

Super-easy to qualify people for loans they can’t repay when a machine just keeps saying yes.

This is the credit-giving equivalent of flinging spaghetti at the wall to see if it sticks. Eventually someone will repay, but most will struggle.