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mdovell
Joined: 22 Dec 2007
Posts: 461
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Posted: Mon Sep 07, 2009 2:11 am Post subject: First it was the housing market...now it's LIFE insurance!
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http://www.cnbc.com/id/32707038
to be honest in the past (mostly the 80's) there was viatical settlements but those were with those that were pretty much dying and had no real next of kin
but with this....
"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."
CDO's but not for houses..same concept...
"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."
This is what happened with viatical settlements. People were targeted that had AIDS. They were given cash up front for their life insurance policy. However when newer drugs came in life expectancy increased. Imagine getting calls from people asking if you are dead yet!
It's one thing to say a health insurance company treats you like crap. It's another when there's a group that actually will benefit when you die. if this gets even 5% as large as what happened with housing it's going to be a rough future. Imagine people expecting their parents might have set out some will when instead it's one of these things. They pass away and someone profits with little to nothing to be inherited...
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Nofsdad
Joined: 06 Jul 2003
Posts: 8380
Location: Central CA
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Posted: Mon Sep 07, 2009 6:21 am Post subject:
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There is nothing... NOTHING... that Wall Street won't exploit for dollars. Good pull Dovell, but are you surprised by any of this?
The health insurance companies do all they can to kill you off and the life insurance companies cash in when you die. Good God... only in America would we let the money changers get this much control over our lives and deaths.
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Calapso
Joined: 26 Aug 2008
Posts: 306
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Posted: Mon Sep 07, 2009 7:37 am Post subject:
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That is completely insane. And they can do it because of the genius of Phil Gramm. These types of investments fall under the guise of 'commodities', and slip under the radar of government and SEC regulation.
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mdovell
Joined: 22 Dec 2007
Posts: 461
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Posted: Mon Sep 07, 2009 1:46 pm Post subject:
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"Good pull Dovell, but are you surprised by any of this?"
a bit. viatical settlements in the past basically ment that some group would buy someones life insurance policy that was terminally ill. The person would get significant money up front so they could do what they want. Life insurance companies hated these things because it was out of their hands. The difference between this and this new one is it bends it to a point where the earlier someone dies the more money there is..and the fact that a viatical settlement the person knows they have a terminal condition...but this... Considering the housing market what if someone signs these things and doesn't know it...then what?
I have to wonder what the next step might be. Maybe bookies betting on the end results of sonograms if they come to term...
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bc5yr
Joined: 24 Feb 2005
Posts: 556
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Posted: Tue Sep 08, 2009 1:44 am Post subject:
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| Quote: |
| "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." |
Good god., how bad can it get? Do they send hit men out on you if you live longer than expected?
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Nofsdad
Joined: 06 Jul 2003
Posts: 8380
Location: Central CA
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Posted: Tue Sep 08, 2009 2:41 am Post subject:
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That's probably the next step. But for now, they just make sure you don't get any care for a life threatening condition and let you die off "naturally". As soon as the shareholders start moaning that their dividends aren't increasing fast enough, they'll probably adopt your plan.
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Calapso
Joined: 26 Aug 2008
Posts: 306
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Posted: Tue Sep 08, 2009 4:33 am Post subject:
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The more I think about this, the more I think this might just be the most disgusting, unethical, and most bastardgreedious (I know it's not a word but it felt right) money making Scheme I have ever heard of. This makes Madoff's rip-off's seem trivial. It makes the morons that send out the emails and sucker little old ladies into sending them thier life savings seem like child's play.
They have to fix the mess Gramm-Leach-Bliley and the Commodities Futures Modernization act. Those two bills are in the end going to allow Wall Street to take down our country.
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Nofsdad
Joined: 06 Jul 2003
Posts: 8380
Location: Central CA
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Posted: Tue Sep 08, 2009 4:31 pm Post subject:
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I agree 100% with one small caveat:
| Quote: |
| The more I think about this, the more I think this might just be the most disgusting, unethical, and most bastardgreedious (I know it's not a word but it felt right) money making Scheme I have ever heard of. |
To that I would add, "until the next one.".
Because you and I both know... while it may be the worst one to date... it definitely won't be the last one.
Any country that allows one percent of the population to turn the very lives of 99% of it's citizens into nothing but another commodity to be bought, traded and sold in the gigantic Ponzi scheme cum house of cards that Wall Street presides over can definitely expect it to get worse.
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Calapso
Joined: 26 Aug 2008
Posts: 306
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