[quote=flu][quote=Allan from Fallbrook][quote=flu]
Unfortunately, I don’t think I have the smarts to pull this off at a large scale. So short of doing this for a few small potatoes, I can only live vicariously to folks with deeper pockets that do it at the commercial level. Back in 97, i attended a few classes about trading commercial paper…It seemed like it would be lucrative if you were plugged in right…Unfortunately, I was too chicken to invest into doing it.[/quote]

FLU: You can do it on a small scale. I know, because I have. During the last serious downturn in construction, an attorney buddy and I went into small-scale factoring (sub $100k in total invested dollars). He had a law school buddy who was working for a large commercial paper outfit in LA and drew up our contracts and taught us how to do UCC filings and encumbrances, as well as what our recourse was in case of a default.

We ran this on a part-time basis for about four years and made some decent money doing it. At the end, we were buying court judgments for less than a nickel on the dollar and making money there, too (nasty business in terms of collecting, though).

There is some really toxic paper out there right now that you can scoop up for pennies on the dollar from some fairly significant players (like Vedder Price), if you have the stones and the stomach to collect on it. Most of the big players in banking, law and finance are happy to get rid of the little stuff, since their overhead won’t allow them to make money collecting it.