Wall Street Looking to Profit From Early Deaths

So you have seen the various depopulation theories, but wonder to yourself. How in the heck could the bankers turn mass death into a sweet profit opportunity?

Well wonder no more!

Wall Street Pursues Profit in Bundles of Life Insurance

The New York Times
After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think 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. 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 — though if people live longer than expected, investors could get poor returns or even lose money.

...

My take on this is a bit tongue in cheek, but the audacity of Wall Street just blows me away.

Makes me wonder if they think Government run health care is going to pass?

If they do, I can see how they could profit from this.

Sorry... I beat you to this one.

Excellent story - no?

www.abovetopsecret.com...

Be well.

Oh, good grief. This is rediculous. So they get a few million of these policies in place and then they release some sort of plague or environmental poisoning. The elite make money off of the working poor dying. That, I think, qualifies as evil. *shaked head*

I can imagine that the insurance companies themselves might be the largest investors in a bond of this sort. Minimizes their losses.

reply to post by RRconservative


There IS an aspect of contradiction there; I imagine that is because there is something we don't know about their actuarial tables....

Just a wild guess.

reply to post by rogerstigers


Well, after all, Insurance was the worlds first trillion dollar industry. They didn't get there by being anything other than cunning.

Originally posted by Maxmars
Sorry... I beat you to this one.

Excellent story - no?

www.abovetopsecret.com...

Be well.

My bad, missed your post

Originally posted by Maxmars
reply to post by RRconservative

 

There IS an aspect of contradiction there; I imagine that is because there is something we don't know about their actuarial tables....

Just a wild guess.

That was my thought too. Investors with inside information looking to get ahead of a trend...

Originally posted by candide

Originally posted by Maxmars
Sorry... I beat you to this one.

Excellent story - no?

www.abovetopsecret.com...

Be well.

My bad, missed your post

No biggie, no one had even noticed my thread...

As long as it get's discussed it works for me!

Does any of this some strikingly similar to the CDO's and CDS's that got us in all this economic trouble in the first place?

With this though, they will start sending out hitmen to take older people out to profit. You know Jane Doe down the street just had a really weird accident and her death was so unexpected, this is freaking nuts.

The worst thing about it all is the government isn't doing anything about it.

Originally posted by Hastobemoretolife
Does any of this some strikingly similar to the CDO's and CDS's that got us in all this economic trouble in the first place?

Not only that, they want to bundle and rate these just like other securities.

I wonder if the consumer will have any rights to know what groups they get slotted into?

reply to post by candide


Or what criterion is used to rate the financial vehicle, other than "because we said so.'

This whole gambling thing is out of hand with these damn middlemen.

Originally posted by Maxmars
reply to post by rogerstigers

 

Well, after all, Insurance was the worlds first trillion dollar industry. They didn't get there by being anything other than cunning.

It's not the insurance companies profiting. It's hedge funds and investment vehicles that would profit.

I have a bit of expertise in this area as a public accountant that audited a life settlements hedge fund operation. Here is how it works. It all depends on the type of insurance policy, you can only do this where the beneficiary is transferable. By the way, let me preface, these are very popular in Europe, as they provide a solid rate of return, usually in the 8-12 percent area.

They are just catching on in America. Hedge Funds have been the first movers here. They have connections to insurance agents. It goes like this. Mr. Smith, aged 65, retired executive from ACME company had term life insurance policy he's been paying for, where once he passes, his named beneficiary will receive, for example, $1,000,000.

With that in mind, and the greed of Wall St (investment banks, hedge funds, trust funds, etc, etc, etc. in this example I will refer to them as 'investors') obviously see something they can exploit. The 'investors' canvas agents and sell them on this idea of having their clients sell their policy to them. The investors/cohorts also advertise in certain media as well. What happens is this. Agent X now on board, will get a fee (usually around 1-4k, at least the ones I've seen, so its very nice for these insurance agents) if he can get his client Mr. Smith to sell his policy to the 'investor.' After hearing the pitch, Mr. Smith figures hey, I can cash in this policy on a present value basis and spend the money while I'm living! Fantastic!

Mr. Smith gets in touch with an 'investor' Triple Six Capital, and they agree to a payment, on a PV basis, along with actuarial tables on this gentleman and agree to a payment. Mind you, Mr. Smith undergoes a battery of tests including blood work up, for this, to accurately surmise when Mr. Smith will 'kick the bucket.' They 'see' Mr. Smith has 15 years left, based on his health, background, and physicals, and offer him for argument's sake, $200,000.

Now without delving into a lesson in the Time Value of Money, Rates of Return, etc, etc, Mr. Smith becomes profitable to the 'investor' if he kicks the bucket prior to the estimated 15 years. If he live past that, the 'investor' does not profit and technically loses money because they could of have invested that $200k into another opportunity that could have had a better rate of return.

But here is where I immediately had a big problem with this. You invest and profit on the hopes of someone dying before their time! Sick if you ask me. I even said it to the people I audited. I even joked to them if they had any mafia hitmen on the payroll. They laughed of course, but seriously, who is to say? Who is to say Mr. Smith is at his favorite cafe enjoying a nice cup of tea and crumpets, goes home and suddenly drops dead of a heart attack.

Who is to say that crumpet was not poisoned. We know there are substances that can induce heart attacks on healthy people. It happens a lot in the evil underworld. Of course his death will not look suspicious...Mr Smith is 71 years old. He is old, lived a long life,etc. What if Mr. Smith was going to live to 86!? If he didn't sell his policy, he could have lived another 17 years, but instead, he was assassinated, for a nice 22% profit for the 'investors' (argument's sake...I didn't calculate it, I am not busting out my HP business calc). Sick.

Now compound the persons who sell their policy by the hundreds, if not thousands. All neatly bundled in a fund to mimic a bond-like performance. It's gruesome and morbid.


[edit on 6-9-2009 by PenandSword]

[edit on 6-9-2009 by PenandSword]

PS, if you love your grandpa or grandma, or mom and dad, and they have a policy like this, and they are suddenly receiving calls from their insurance agent, step in and save them.

guys these are just viatical settlements, its been going on for a long time.. its not that big of a deal

Originally posted by PenandSword

Originally posted by Maxmars
reply to post by rogerstigers

 

Well, after all, Insurance was the worlds first trillion dollar industry. They didn't get there by being anything other than cunning.

It's not the insurance companies profiting. It's hedge funds and investment vehicles that would profit.

My contention is that there is no real difference between the financial and insurance industries. It's the same players with different hats.

All the rest are just gamblers, statisticians, and game theorists.

[edit on 7-9-2009 by Maxmars]

Some guy made a thread saying that americans were going to be given a million dollars, in a roundabout way thats nearly correct.
An american is worth a million dollars and you only get 40% like i said NEARLY right!!!

Originally posted by PenandSword
...
Now compound the persons who sell their policy by the hundreds, if not thousands. All neatly bundled in a fund to mimic a bond-like performance. It's gruesome and morbid.

I agree completely.

Everyone is entitled to profit from good ideas, but I feel things like this cross the line into immorality.