What Florida has lots of

Judging from a quick scan of storefronts and occasional radio-listening, Florida has many more plastic surgeons than Minnesota.  Also, a lot more malpractice and injury lawyers.

I’ve already seen a bunch of commercials for getting advances on annuities and structured settlements.  That stuff has been around for decades.  Just now, though, I heard a radio commercial for something that’s new to me:  a service to get a cash advance in anticipation of a legal settlement when the case is still pending in court.  The ad was careful to mention that if my suit fails and I don’t get a settlement, then I don’t have to repay the loan.

So… it’s obvious where this is heading.  A structured settlement is essentially the same thing as a mortgage (but with lower investor risk since there’s no equivalent to pre-paying) so presumably there were a bunch of financial vehicles similar to mortgage-backed securities which were created to generate the cash that was fronted to those “I need cash now!” customers.  Since the real estate crash, all those bankers are kicking around looking for other places to use their skills, and they’ve created some kind of hedging model to predict the average settlement value of pending legal suits based on raw criteria.

All of the actors are in place, just like before: Instead of realtors we have lawyers, instead of Household Finance we have Peachtree, and instead of overly-optimistic homeowners we have whiplash sufferers and botox-mishap victims.  I predict that all of those bond-traders who hit the bricks a couple of years ago will be back behind desks by 2013.

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