According the Federal Reserve, credit card charge-offs in the first quarter of 2011 fell to about 7% for the industry as a whole. While this number is down from the 10.97% peak in the second quarter of 2010, we remain very confident in the opportunity going forward for many reasons:
- Inventory buildup – Charge-offs for 2009 were 81 billion. Charge-offs for 2010 were 76 billion. In 2010, banks only sold about 40 billion which means they are sitting on a lot of inventory which will eventually make its way into the system.
- 7% is still a lot – Even if we did average a 7% charge-off rate for 2011 that still represents about 40 billion (Moody’s estimate for 2011 charge-offs is not less than 60 billion).
- Coming Changes – The coming regulatory changes will make it difficult if not impossible for the major debt buyers to operate under the new rules. In contrast, our business model will thrive!
- Relationships Rule – Our key relationships enable us to be part of forward-flow deals with several banks. These deals are what provide inventory on a monthly basis. Forward flow arrangements are currently in the works with Bank of America, Wells Fargo, and others!
We provide the best investment alternative around.
Contact us today and find out how you can take advantage of a system that has previously been not been available to the average investor!
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