Accounting for death - Retail life insurance last financial innovation on Wall Street

Rentabilizand death - Retail life insurance last financial innovation on Wall Street
of Economic Trends Economic Trends
Tuesday, September 8, 2009 , 11:04 Economy | Finance & Banking

 Consider the mutually beneficial business . John is suffering from an incurable disease . Also, John has a life insurance policy of $ 1 million , money that will accrue after the unfortunate will be dying . What has captured John in this business? Nothing . The latest innovation on Wall Street is described in detail on the blog Economic Trends .

Well, here comes a gracious which aims to John next fair : in exchange for the right to collect the money corresponding insurance, gives a fraction before he died . In other words , John gets lifetime beneficiary of a portion of the amount due to him as a "reward " for his death.

If you live with the illusion that those who caused the current collapse withdrew quietly from the first line , you 're sadly mistaken . They never left the battlefield and I think I would not exaggerate if I say that , ultimately , the notion of " battlefield " in the current acceptance belongs altogether. There are people discreet , almost obscure , but have a destructive capacity fabulous . Their goal is to make balloons not for lard , but charging commission.

It is a new sample of inventiveness investment banks , a bubble in early stage , which may hear in the near future.

Devised scheme is as simple as it is brilliant . Perhaps you are familiar adage that "the only certainty is death ." From this axiom , smart guys of Wall Street are about to develop a new generation of weapons of mass destruction .

Strange business , but quite lucrative , if we consider that a John can lay claims to a maximum of 40 % of the sum insured . So in short invest now, waiting to die John and earning 2.5 times more than you put into the business . If unhappy dies quickly, you put a prodigious profit . A secure business , huh ?

Well, the guys on Wall Street do not get to work as amateurs . Just do not think that any shark hunt Goldman will be destroyed on the corner . The real profit comes from the schema after the principle of the toxic assets underlying mortgage .

So staged schema provides group rights in larger packages for diversification and risk mitigation ( sounds familiar? ) . After this , follow the derivation selling packages of products to achieve a satisfactory level of sophistication. If in terms of the growing mortgage market Wagering proved to be a mistake , I think it is no secret that death is a sure thing. So a strong enough argument to trash noble reisteriza world .

When I first heard of this "new concept " , I thought it's an experiment , and things are going to develop over time. But the scheme seems to be ready for a long time in laboratories.

Read the rest of this article and comment on economic trends .

P. S. The subject is treated in detail by the American press , New York Times delightedly stating : "Back to Business . Wall Street Pursues Profit in Bundles of Life Insurance" .

The mechanism is simple , explains prestigious newspaper : " As the policy owner dies quickly , the profit is higher - even if he lives longer than expected , investors could choose a small profit or could even lose money. "