Monday, September 07, 2009

From the Department Of "You Just Can't Make This Shit Up": Up Next, The Life Insurance "Securitization" Bubble

Not content to have thrown the world's economy into the shitter betting on which/whether certain home-buyers would fail to meet their mortgages--and not incidentally rigging the bet in the process--now the Bankster/gamblers, the fucking high-hat tinpot hucksters and shysters and hypes are deciding on how to "securitize" life insurance policies.

No, really.
The geniuses on Wall Street have found another way to gamble and call it investing. Forget about mortgage-backed securities (wouldn’t that be nice?). Life insurance securitizations are the new hotness on Wall Street. And the fun part is, they make more money when you die faster.

Maybe death panels will make a comeback.

The New York Times explains how it works:
The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money. [Link]
Will someone please regulate these people before we have to go running to the Chinese for even more money to bail them—or what’s left of us—out?

Let’s just summarize this: Rich people have found a way to gamble on how long financially desperate people will live. We are living in a Philip K. Dick novel. —PS
From the Comments:
By Stephen Smoliar, September 7 at 10:54 am #

This seems like the inevitable next step after one of the more nefarious practices exposed by Michael Moore in CAPITALISM: A LOVE STORY. Here is how it was described in the BBC report from the Venice Film Festival: “Moore also uncovered a shocking practice of big companies taking out life insurance policies on their workers, with one company benefiting to the tune of $5m (£3m) when one employee died, while his family received nothing.” Now that corporations have found a new way to exploit the masses, the bankers want to get in on the game! (Emphasis supplied. W)
A new, more profitable use for Balckwarer/XE employees is on the horizon.

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