Seriously creepy news from the world of finance

[hudebnik]

From this post (ETA: which links to this article), a nifty new financial derivative: trading other people's life insurance policies. Since the investor assumes responsibility for paying the premiums, the return on investment is greatly improved if the insured dies as soon as possible. Do you want a major corporation to have that kind of investment in your... umm... health?

Comments

[siderea]

(Pssst. That's a locked post.)

[hudebnik.livejournal.com]

Oops; thanks for pointing that out. Added a link.

[osewalrus.livejournal.com]

But what's great is that it creates "pools of insurance policies" that allow you to "collateralize debt/risk" so that you can capture all the value and minimize the risk. And we can even further minimize risk by taking derivatives on the CDOs.

Cool, huh? I wonder why no one tried this before . . . .

[hudebnik.livejournal.com]

Right, and bundling lots of these things together should reduce the risk almost to nothing, because everybody knows that two different people dying are statistically independent events...

And the bizarre part...

[hudebnik.livejournal.com]

The Times article raises all kinds of concerns about fraud, and investors losing money if (God forbid!) health insurance reform were enacted and successful, or a cure was discovered for one or two major diseases, but it doesn't have a problem with giving Rich and Powerful People a substantial financial interest in those things not happening.