Daniel Gross at Slate.com on the new class of companies that have taken on the role of “repo men” in the new economy.

The investment thesis: With rates rising and consumers under economic stress, it follows that there’s likely to be more bad debt out there. And that means banks, credit card companies, utilities—all sorts of people who extend credit to customers—will find themselves with growing piles of uncollectible debt on their balance sheets. Consumer-oriented companies don’t like to be in the gritty business of collecting, because it’s cost-intensive and using hardball tactics can bring negative press or regulatory attention. Instead, they do to collections what corporate America does with every other unpleasant task: They outsource it, selling the bad debt for a tiny fraction of face value.

Given the state of the the American consumer these companies should have a tailwind for some time to come, especially with the new bankruptcy laws now in effect.

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