"One stock that is holding up well and is poised to do well during hard times is Portfolio Recovery Associates (NASDAQ: PRAA), which is America's most effcient debt recovery company," says Jim Powell in Global Changes & Opportunities Report.

"The company -- which has been on our buy list -- has become especially attractive for the economic conditions I expect to see over the next few months, and probably much longer.

"Portfolio Recovery -- which is America's most efficient debt recovery company -- buys packages of non-performing debts from major credit card companies, and typically pays only 2.6% of the total amount owed. With such a low initial cost, it doesn't take a large collection rate to turn a tidy proft.

"As more consumers default on the colossal debts they ran up during the housing boom, the company should see a great deal of new business.

Do any companies benefit from growing default rates? Yes, says Paul Tracy. "As the supply of bad consumer debt swells, those in the business of buying and collecting on those loans have a more plentiful (and cheaper) pool of debt at their disposal."

The editor of StreetAuthority Market Advisor states, "Portfolio Recovery Associates (NASDAQ: PRAA) is one of the most attractive players in this particular niche. I believe that the current credit environment is actually a major benefit for the firm."

He explains, "Recovery Associates' business model is simple. The company buys defaulted credit card, auto loan and other debts from lenders. Because this debt is in default, PRAA pays just a few pennies for each dollar of debt it purchases."

Tracy continues, "As long as PRAA can collect a few pennies more than it pays for the debt, the company makes a solid profit. And PRAA has been doing just that for years."

Most of the day, the Dow Jones industrial average was in a steady, but slow decline -- the kind of drop where traders figure it's going to be a negative day, but nothing to worry too much about.

But after the much-anticipated minutes of the Federal Reserve Board's Aug. 7 meeting went public around 2 P.M. and investors didn't see the signs they were hoping for that the central bank would be willing to cut interest rates, the selling picked up. The Dow closed down about 250 points. That's less than 2% -- hardly the stuff of panic -- but more indication that a lot of professional investors are counting on the Federal Reserve to lower interest rates, and do it soon.

A decline in consumer confidence reported earlier in the day didn't help. It's becoming increasingly clear that the real danger with the meltdown in the sub-prime mortgage market is not with the financial sector. Sure, hedge funds will shut down, big banks' earnings will suffer. But the really big worry now is that the U.S. consumer could roll over.

That's the view of Robert Loest, senior portfolio manager of Integrity Mutual Funds, who visited AOL's offices today. The housing market is not going to rebound quickly or easily -- especially with so many adjustable rate mortgages still due to reset to higher rates in 2008, he warns. And he suggests investors avoid all consumer plays; not just the luxury goods stocks, but even discounters, like Wal-Mart Stores (NYSE: WMT).

Loest further recommends picking up some counter-cyclical stocks -- like bankruptcy software maker Epiq Systems (NYSE: EPIQ) or collection agency Portfolio Recovery Associates (NYSE: PRAA), both of which he owns. "Those are the kind of stocks that should do well when the economy does poorly and could make a real difference to your portfolio," he says.

Back on March 13, 2007, I noted the "debt collector group" and give three picks to profit off of subprime woes and predatory lending. These picks have peformed well of late due to some positive news.

Portfolio Recovery Associates Inc. (NASDAQ: PRAA) just proved how being a debt collector can be beneficial. The company beat earnings Tuesday by posting $0.80 EPS versus $0.77 estimates out of First Call. It took this even further by announcing a 1 million share buyback and a $1.00 special dividend. If you look at what the company does, the "Recovery" says it all: provides outsourced receivables management and related services; purchases, collects, and manages portfolios of defaulted consumer receivables and accounts receivable; receivables are the unpaid obligations of individuals to banks, credit unions, consumer and auto finance companies, and retail merchants; provides various collection services, including collateral-location services for credit originators, fee-based collections, and audit and debt discovery/recovery services for government. On March 13 the stock was $43.53. It closed Tuesday at $48.80 in regular trading and went up to $50.02 in after hours. If the bill collectors can't make money off the people walking away from obligations without being flat broke, then who can?