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.That is not all they are doing, of course. They are also putting a fresh coat of varnish over the toxic mortgage securities and selling them to the same suckers who got burned the last time around:
In addition to securitizing life settlements, for example, some banks are repackaging their money-losing securities into higher-rated ones, called re-remics (re-securitization of real estate mortgage investment conduits). Morgan Stanley says at least $30 billion in residential re-remics have been done this year.This is all going of, of course, because the Obama Administration and the Congress are too gutless to fix the problem by re-enacting the Depression-era financial reforms. The Obama Administration is peopled with moles from the financial sector (Treasury Secretary Timothy Geithner and Director of the White House's National Economic Council Lawrence Summers being two prime examples) and the Congress is pretty much bought and paid for by the banks.
There will be no real reform. After the Great Recession ends, in five years or twenty, there will be another financial melt-down. The taxpayers will have to bail those thieves out (who will by then have collected trillions on "bonuses"), yet again, and millions of workers will lose their jobs.
Nothing ever seems to change because the people who would most benefit from better regulation and controls on the financial sector (90+% of Americans), have no real voice in things. Congress looks to protect the rich and the powerful.
Ted Kennedy was right: What is it about working Americans that drives the politicians, especially the Republicans, crazy?
1 comment:
I simply don't understand it. Obama got himself elected, in the way that politicians do, and presumably the biggest donators to his campaign would be expecting his obedience, for their profits.
But he was elected into a rare situation, where it was pretty clear what he had to do to become one of the big-name presidents. Another face for Mt. Rushmore. Hell, he could have kicked Lincoln off the $5 bill, simply by giving us Medicare for all, and employing time-tested, Roosevelt techniques for getting us out of hock.
And, yes, it would have interfered with the flow of corporate cash. Yes, he would be going back on promises to fat corporations. (Not a law to break promises with them, you know?)
And what would the downside be? Crazy people spouting crazy lies about him in the news? He's already got that problem. Re-election fears? Look what happened to FDR.
It saddens me and drives me crazy that he had that opportunity and he's using it to be just another wishy-washy, one-term, faceless president with a comfy retirement ahead of him.
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