borrowing more down here when market conditions are favorable sounds ok but if Fed has to surprise and hike rates suddenly and earlier than expected in 2008, then PRAA could be in difficult times for long term simply because it is a very very difficult collections environment judging by the tone of the CC
the avg collections per employee is down and per hour so these metrics could continue this summer and they are telling us "near term collections slowdown"... summertime it's harder to nail people down
I agree with buyfreecash. With the economy the way it is, I seriously doubt the rates will go up at least for the next two quarters, so the borrowed money will remain cheap this year. In other words, your worried about a meteor strike - something highly unlikely to happen.
As I heard the confrence call, it takes time to hunt down the deadbeats so the flood of new accounts will drag down profits short term, but will probably increase profits by years end. Even though the flood of layoffs will also drag down the profit per account, the bottom line should rise by years end.
50 Phillippinos on the phones - they should have imported 50 negritos with machetes. (heh heh)
The Fed isn't going to raise rates until economic growth resumes and is stable. The most they will do is sit on the sidelines. When growth resumes, people will be buying these stocks in the hopes that collections will improve dramatically and the portfolios will have increased value. When that happens, we will all be sellers at much higher valuations because all these investors will be looking in the rear view mirror saying, wow, that stock is really really cheap on trailing 12m...