Profiting on death

[Hannah Bell]

Investment banks are planning ways to bet on the life and death of individuals with life insurance policies, as described in an article published in the New York Times on Sunday.

“The bankers plan to buy ‘life settlements...Then they plan to ‘securitize’ these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds,” to be sold to investors.
Investors will continue to pay out the premiums... and will collect the payout when the person dies. “The earlier the policyholder dies, the bigger the return.”

...The process of buying and selling the life insurance of other people already exists (Business Week ran a story in 2007 under the headline, “Death Bonds”), but “securitizing” these policies to make investment easy is still in its infancy. Yet the Times reports great interest in the possibility. “Our phones have been ringing off the hook,” one rating agent is quoted as saying...

The Times notes that the market could reach $500 billion, which “would help Wall Street offset the loss of revenue from the collapse of the United States residential mortgage securities market…”

http://www.wsws.org/articles/2009/sep2009/pers-s10.shtml


The article goes on to make the following points:

1. The "collateralized death market" may be rather profitable:

- poor economic conditions = lots of folks willing to sell off the policies cheap

- poor economic conditions = stagnating or reduced life expectancy

- cuts in social spending = stagnating or reduced life expectancy


2. The interest of "investors" in death bonds = sign of the essential parasitism of the investor class/ruling class.

"The present global economic crisis is intimately linked to the rise in power of a financial aristocracy that has accumulated its massive fortunes from processes ever more divorced from the production of real value."

Government policies of both Bush & Obama have strengthened the power of this class.



Investors are betting we'll be dying sooner than expected.

What does this tell you?

[Hannah Bell]

1. kick

[Trillo]

2. It tells me that we need some rather strong anti-death betting legislation

pronto.

One would hope that "life" of "life, liberty, and pursuit of happiness" would be a legal consideration, but we already know the latter two have been severely curtailed for most citizens, it is not surprising the entities that want to put bets, and therefore incentives, on our dying before a particular time, are going after the remaining one, "life".

It seems the commerce clause has grown past any reasonableness it may have had at some time way back when.