MFA Musings: 8/13/18
I am looking out over the peacefully quiet horizon contemplating what to write about the economy in my Monday morning MFA musings. I feel that the economy is going well. Overheating? I think the answer is not yet. But, there are a few signals that are popping up on the horizon that are making me think more carefully on this topic. The concerns that have caught my attention today are:
- Credit card bills in default rose nearly 10% over the last year. A considerable increase, but the total default rate of 3.65% is still low. As a point of reference, the default rate reached 10% during the last recession. So, there is some room there.
- At the end of 2017 private equity firms had become a large lender, having lent over 500 billion dollars, up from $300 billion in outstanding loans in 2013. This non-traditional lending is growing quickly. There were 322 private equity funds launched from 2013 to 2017 to lend money.
- Rising default rates and the fast growth of non-regulated lenders. We need to keep an eye on credit and defaults, especially as interest rates rise and borrowing costs increase.
Are you prepared for increased demand from non-traditional lenders? Contact your advisor to discuss ways to grow in this competitive market. All of us at McQueen Financialare dedicated to your long-term success.
Have a great week.