Wall Street Ghouls

Are you ready for the latest craze in the Wall Street Casino? As the NY Times is reporting Wall Street Pursues Profits in Bundles of Life Insurance.

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.

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.

Isn't it reassuring to know that our "best" and our "brightest" have calmed down after peering into the financial abyss a year ago. These people are truly national treasures considering the innovative ways they find to attract scarce capital for efficient allocation.

In the aftermath of the financial meltdown, exotic investments dreamed up by Wall Street got much of the blame. It was not just subprime mortgage securities but an array of products — credit-default swaps, structured investment vehicles, collateralized debt obligations — that proved far riskier than anticipated.

The debacle gave financial wizardry a bad name generally, but not on Wall Street. Even as Washington debates increased financial regulation, bankers are scurrying to concoct new products.

But of course, there is a bit more to it than saving reputations:

Undeterred, Wall Street is racing ahead for a simple reason: With $26 trillion of life insurance policies in force in the United States, the market could be huge.

How altruistic of them. Read the whole piece if you have the stomach for it.

However, if you are itching to run to your nearest casino to plop your chips down in this game, you should be aware that it is not a new idea! Indeed, the Germans have found that "Investing in Death" is more complicated and that Betting on US Life Expectancy Proves Risky.

When will this lunacy end?

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why don't they just pick the pockets of the dead?

Well, this is going to sound awful but the models for ascertaining death are way more stable than basing one on a CDS..

but they are just determined to do those inane derivatives..

when will they securitize the fleas on my dog, betting on the life expectancy of said flea vs. being decimated by a topical application which will kill them.

Have you see he new business to try to get someone to sell their annuity or structured settlement for next to nothing because they are desperate?

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More involved than it first appears

And that is how AIG is "repaying" $8.5 billion of some of those government loands -- by having done a securitization on life insurance policies, i.e., "death bonds" - and spewing forth securitization notes.

But the insurance industry - just like their fellow banksters - having been doing these securitizations for some time: with insurance-linked securities, catastrophe bonds, and let's not forget the first outfit to do a Collateralized Risk Obligation: Goldman Sachs.

Which takes us to that backdoor bailout of the insurance industry, the no-single-payer, no-public-option "health insurance reform." (Reform, another Orwellian word?)

So, during the Great Depression, FDR's answer was to stop the gamblers from their debt leveraging of the the markets.

Today, the Bush and Obama Administrations choose instead to allow ever more debt leveraging of the markets to an exponential level.

Debt peonage, thy name is the future.

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public turning on Obama/Democrats

When I went looking for the "best of the lot" for Sunday Morning Comics, I found a slew of really nasty images, youtubes and so on against Obama and this is the reason. The MSM sure doesn't report it but that's the real reason, this continuation of the corporate lobbyist agenda that the tide is turning against Obama/administration.

It's astounding how this is not reported. MSM always zeroes in on crazies, horse race, completely ignoring this lobbyist, bought and paid for legislation.

I also saw another beyond belief disturbing trend. I saw a host of extreme violence, under the category of "comedy" in youtubes. I've never seen so many as I did yesterday.

Every week I basically hunt high and low through hundreds of youtubes, online videos, sift through what I can find online in terms of talks/documentaries and so on to put up those two series FNV, SMC and I was really shocked.

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