Life Settlements To Help Jumpstart Economy

I was reading the NY Times on Sunday and stumbled across an article about Wall Street's new plan to sell life settlements as a bond. At first, I was mortified. Insurance long has been an alogrithm for years in all, but to be betting (I mean investing) on somebody's life or really against it. The best bonds to own will be those of the elderly and ill with the worst being the young and the healthy. This idea is from the same people who brought you the Gaussian Copula function (Google it) which ruined our bond markets and our economy, credit derivative swaps, "structured" investment vehicles, subprime mortgage loans, recently starting doing re-remics (bundling dirty assets into a new higher rated one) and now these "life settlements bonds".

After my sticker shock was over, I thought about it a little more. These "life settlements" will not only work they really help everybody as horrible as it is to be investing for/against somebody's life. These "life settlements" will create cash for those whose retirements got killed and are underneath their loan on their house . I know it sounds just like refinancing your home loan. Plus these new securities will be a boon for Wall Street and in some weird way will help do what Wall Street does best "create something out of nothing".

I expect it will take a few months or even years to work out the details but get ready to for every American to be traded on Wall Street just like a stock. As long as these practices are regulated I have no problem with these hitting the marketplace. We don't need another marker like what happened in the un-regulated CDS world last year. I don't know if I'd feel this way if I were in my 60's because it's their life settlements that will really be in play here. Best of luck to Wall Street and Barack in figuring this out. I think we as people deserve some details first and then some cash later too if we like what we see.