Cashing In on Death
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The latest repulsive idea from the people who brought us the Great Recession.
Thought I’d take a short break from sports to say a few words about the latest Wall Street scheme revealed in today’s New York Times. Looking to replace those big profits investment bankers once pulled in by packaging sub-prime mortgages, the geniuses on the Street are now packaging life insurance policies, betting on big returns from people who die early.
An excerpt: Wall Street 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. If people live longer than expected, investors could get poor returns or even lose money.
Will we again have to bail out the too-big-to-fail investment banks when these investments go bad?
Or is this Wall Street’s way of telling us that health care reform is DOA?
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I sincerely hope those sick fools on Wall Street die off very soon.
Sadly, they are one who makes the rules — or buy the people who are supposed to make the rules — so I fear that we will all die off first before things change on Wall Street. Where are the regulators? Sadly, too, this is not CanWe Can Believe In.
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