How Do You Know When Things Are Better?

When corporations spend millions of dollars to tell you they are.

Who cares that you're 45 years old, living in the basement of your demented parents' foreclosed home in an abandoned subdivision threatened by a hurricane? Who cares that you eat oatmeal and stale crackers three times a day? Everybody still employed by GE had a smile on their face in that commercial where they told you everything is better now!!!! Lighten up!!!!! Get out there and buy something fun--like medicine for your bronchitis--with that unemployment check that never came! LOL!!!

Wipe that bloody drool off your chin, shattered human! Bank of America paid a lot of money to BBDO and the television networks so that they could tell you everything is okay. Who cares that they don't loan out money anymore, continue to speculate against you on the stock market, and now buy and sell securitized life insurance policies, gambling against their golf buddies in the health care industry.

Wait, what was that? Say that part again?

Wall Street investment banks are planning to buy and securitize life insurance policies of older Americans. A $1 million policy might be sold for $400,000, then bundled with other policies and sold to investors, the New York Times reports.

Duke law professor James Cox calls the development “bittersweet.”

“The sweet part is there are investors interested in exotic products created by underwriters who make large fees and rating agencies who then get paid to confer ratings," he told the Times. "The bitter part is it’s a return to the good old days."

The story says the plan could be good for Wall Street but bad for insurers, which set rates based on the assumption that policyholders will let their life insurance lapse before they die. If the policies are bought and securitized, insurers may lose money and pass on the loss in the form of increased premiums.

(courtesy ABA Journal)

Wait--what does that mean, exactly?

Well, [Wall Street's] new plan is to buy life insurance plans from elderly and sick people for cash. The example that the New York Times gives is someone selling a million dollar policy for a $400,000 payout, but the payout amount would all depend on the seller's life expectancy. These "life settlements" would then be bundled together to form bonds that can be sold to investors. The investors would start paying for the person's policy from then on. When the person dies, the investors collect on the policy.

Apparently, the faster the person dies, the more money the investors make. However, regardless of whether you die sooner or later, Wall Street firms will profit off of fees collected from creating the bonds and facilitating transactions. You could say that Wall Street is planning to "securitize" people's lives (or deaths, as it may be) into a kind of CDO (Collateralized Debt Obligation). And we all know how great that whole CDO adventure played out for Wall Street, right? What could be dangerous about creating a similar class of financial products with sick people's life expectancy as the focus?

(courtesy CBFE Economics)

Wow--things really are better! Now Wall Street is betting everything on the health care industry stealing so much of your parents' money that they have to sell their life insurance benefits right before they die.

It's like these guys are just begging to be called out on this, daring somebody to say something, to do something--like a serial killer leaving clues at the scene of the crime.


But the funniest part of all this hubbub (aside from all the other hilarious stuff I've thus far mentioned) is that these companies didn't think they could rely on you knowing that things are better because your life was actually better. I mean, are they going to start hanging out around my dinner table so I know when my food tastes good?

Just try to wipe this fucking beatific smile off my face, reality! I'm a paid actor in a television commercial and I am damn good at my job!

"CUT!"

And now, back to frowning reality...

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