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Death Merchants

One year down the road and Wall Street hasn’t learned a damn thing. President Obama said today, “Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them.” Yep, those are the guys that you are still trusting your hard-earned retirement money to. Robert Reich sees it this way, “Let’s be clear: The Street today is up to the same tricks it was playing before its near-death experience. Derivatives, derivatives of derivatives, fancy-dance trading schemes, high-risk bets.” “The only difference now is that the Street’s biggest banks know for sure they’ll be bailed out by the federal government…”

* until your insurance runs out

* until your insurance runs out

Now, the same folks who thought it was such a good idea to loan massive amounts of money to people who had no chance of ever paying it back and wound up destroying the entire economy have come up with a spiffy new idea to make money. The wizards of Wall Street are hoping to make a killing (pun intended) by betting that you will die an early, gruesome death. Here’s how it works; There are all these terminally ill people just laying around out there waiting to die. The insurance companies won’t sell them health insurance because, well, they’re dying, and “Hey, that’s too expensive” and the bills are piling up. So, the insurance companies will send ghouls out to scour hospitals, nursing homes and hospices to find folks who are dying from cancer, diabetes, strokes, liver failure, or whatever. Then the insurance vampires will sell them overpriced life insurance policies. Next, up steps your friendly neighborhood derivatives banker. He will buy the life insurance, at a hefty discount of course, in what is called a “life settlement“. The poor guy who is dying in excruciating pain and his family get a semi-good deal. They get a bundle of cash to pay some of the exorbitant hospital costs and the broker gets a big payoff when he kicks the bucket. Sounds good huh? Well, not quite. Wall Street likes to hedge it’s bets in a way that also increases profits. So, we’ll take a bunch of these “life settlement” policies and bundle them together to create “death bonds”. Now, we can sell these nifty “investment opportunities” to people who want to place a wager on how quickly other people will die. The sooner you die, the bigger the profit.

If you put off dying or, say we pass some kind of health care bill that extends our life expectancies, the Street might loose a few billion. But hey, the American people gladly bailed them out before. No reason to believe they won’t do it again, right?  Next up, I can see full-page adds in the Wall Street Journal extolling the benefits of including real “death panels” in any health care reform bill. The more people Wall Street can kill off early, the more money they can rake in. And hey, we don’t want them to go broke, look how much it cost us last time. Goldman Sachs is on track to hand out record bonuses of $11.4 billion to it executives. That works out to an average of around $770,000 per person, even the janitor. They need to get that money from somewhere. I’m sure some of the executives will think twice about taking that blood money if they know that it came from killing your Grandma though, don’t you think?

Yeah, I know, this all sounds like something out of a bad Quentin Tarantino movie, but it’s really for real. Just make sure you keep an eye on Granny’s pain medication when your friendly insurance man pops up at her bedside.

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2 Responses

  1. These articles are unfortunately an editor’s attempt to build a resume by spinning something that isn’t really a large issue.

    I oversaw a settlement of my father’s policy. It was a 10 million dollar whole life policy. He had contributed much more in premium payments than the cash value of the policy.

    My dad has lost over 45% of his overall net worth due to this recession and no longer could afford the premium payments. He needed money. He was going to let it lapse until I recommended he consider settling the policy.

    The settlement on this policy netted my father $2 million in cash. That is a deal every day of the week. We turned a policy that he was going to be pure profit for the insurance company into something that benefitted my father while he’s still alive.

    So this concept of “Death Merchants”? Stupid article, stupid name, stupid spin. Do your homework and figure it out before you publish this shit.

    • Oooh, I’ve been “Wilsoned”. Thanks Frank. I’m honored. “Stupid, stupid, stupid”. I’m glad you father was able to get some of the benefit of the policy. If I read this right he got 20% of the value and the company made 80%. You are right, it was a good deal for your father compared to letting it lapse. It was a better deal for whoever bought the policy. I don’t think the article dealt so much with something like the settlement of individual insurance policies, that happens every day, as with the insane ideas that folks on Wall Street have for turning people’s misfortune into investment opportunities. Turning dying people into securities assets is still a stupid idea. And, I agree that it’s not really a large issue, just a dumb one.

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