by Structured Settlement Watchdog
Genex Capital Basic Economics
"Sellers of structured settlements have been asking why are discount rates for their cases so high when the Federally set interest rate is so low.
The answer to this is basic economics:
1. The Fed rate is low because there is reduced market activity and the Fed is trying to stimulate such activity.
2. Demand for money is high but lending supply is low (this is what they mean when they say money is tight).
3. While the Fed rate is low, try to get a mortgage or loan, or worse yet a credit card interest rate that is in the single digits".
Source: Genex Capital website, retrieved 6/26/2019
The St Louis Fed chart here show not much tightening for commercial or industrial loans for large and middle market firms. Is Genex Capital one of those, or is Genex Capital just small potatoes? JG Wentworth has a 4% cost of money. And RSL Funding claims that "you've likely been ripped off by JG Wentworth" in its latest marketing message, implying a low cost of money. What does that mean in the context of what Genex Capital has stated? Why are deals getting done in the 5-6% range, when Genex Capital appears to be trying to justify rates much higher?
Moving on to the Mortgage Rates Mosh Pit. The statement "While the Fed rate is low, try to get a mortgage or loan, or worse yet a credit card interest rate that is in the single digits" is a
figurative toad stool. Peter Warden