"They plan to securitize these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell the bonds to investors.... bankers are scurrying to concoct new products....
subprime mortgage securities... an array of products - credit-default swaps, collateralized debt obligations....
This is HOW WE GOT INTO ALL THIS TROUBLE in the FIRST PLACE!
And they are LOOKING TO DO IT AGAIN?
INSANE!!!!
In addition to securitizing life settlements, for example, some banks are repackaging money-losing securities into higher-rated ones, called re-remics (re-securitization of real estate mortgage investment conduits)....
That is the SAME EXACT FRAUD that occurred in the mortgage!
Either way, Wall Street would pocket sizable fees.... "
I guess it TRULY is a SHELL GAME and they NEVER LEARNED because THEY ARE DOING IT AGAIN!!!!!!!!
And Obama wants to mandate money going to these crooks?
"With life settlements, Wall Street may be back to its old ways; Questions arise on exotic new investments" by Jenny Anderson, New York Times | September 6, 2009
NEW YORK - ....
But some are dismayed by Wall Street’s quick return to its old ways....
Indeed, what is good for Wall Street could be bad for insurers, and perhaps for customers, too....
But....
After the mortgage industry imploded last year, investment banks began searching for a new idea to make money. 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.
MAKING MONEY off DEATH, yup! That is WHAT BANKS DO!
Then they plan to securitize these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell the bonds to investors, like pension funds, who will get the payout when the policyholder dies. 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.
Either way, Wall Street would pocket sizable fees. But some warn that insurers might have to raise premiums in the short term if they end up paying out more claims than anticipated.
The idea is still in the planning stages. But already “our phones have been ringing off the hook with inquiries,’’ says Kathleen Tillwitz, a senior vice president at DBRS, which gives risk ratings to investments and is reviewing nine proposals for life-insurance securitizations from private investors and financial firms, including Credit Suisse.
After the financial meltdown, exotic investments got much of the blame. It was not just subprime mortgage securities but an array of products - credit-default swaps, collateralized debt obligations - that proved riskier than anticipated. But even as Washington debates increased financial regulation, bankers are scurrying to concoct new products.
In addition to securitizing life settlements, for example, some banks are repackaging money-losing securities into higher-rated ones, called re-remics (re-securitization of real estate mortgage investment conduits). Financial innovation can be good, of course, by lowering the cost of borrowing for everyone, giving consumers more investment choices, and by helping the economy to grow.
Is that a TOTAL PIECE of STINKING PROPAGANDA or what?
Yeah, the WALL STREET RIP OFF is GREAT FOR EVERYONE!
No wonder AmeriKan newspapers are hated and tanking now!
And the proponents of securitizing life settlements say it would benefit people who want to cash out policies.
I got a tax penalty.
Insurance companies, they note, offer only a “cash surrender value,’’ typically at a small fraction of the death benefit.
Hey, you can't take it with you anyway.
--more--"
