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Securitizing Life Insurance: Big Return for Asian Insurers as U.S. Insurers Lose Out

Would not even know where to start, but none of you seem to have clue about life insurance. It is far more complicated than a mortgage. The pyramid scheme line is an awful assessment. This is not social security. The insurance company wins; policy holders with similar risk lose as a whole, but the people who die early win, as a consolation of living longer and paying premiums which has to be enough to cover the people who died too soon these losers get the consolation prize of living longer. Now this is assuming a whole life policy and one risk pool. To try to simplify as people do is ridiculous. I agree with the surplus notes, captives, and other games played with FHLB's and FRB's insurance companies look more like a bank everyday. That being said, this is not a mortgage and these financial guys can't apply brownian motion with a random walk to this, the question they need to ask is are they ready to litigate the 50 states different regulatory rules with the insurance company when they decide they won't pay the death as the legal aspects of this are mind boggling. To address the idea of the sooner someone dies the sooner the people benefit, there will still be someone out there who wants him to live longer (ie the person being paid the premiums). When you have a life policy, someone always is interested n your death, just look across the table at your son in law at Thanksgiving this year, and ask yourself if you want him knowing how much he stands to get when you kick it.

Paul Krugman, Please Call Ben on This 'Printing Money' Thing

Not only are they sitting on cash, due to the new fed policy that was accelerated to start in Oct. 2008, they are receiving interest on these excess reserves. If the fed wants t increase lending to the public, why are they offering a risk free return (even more so than the treasury since they own the printing press) on reserves including those above regulatory requirements?


On Jun 01 02:18 AM milkchaser wrote:

> What is the purpose of printing the money if indeed the banks do
> not need the money and won't do anything with it? If it is useless
> and ineffective, as Krugman claims, then they could immediately stop
> and sop up the $$. But that's not what they're doing.
>
> And the banks are not giving the money back to the Fed as Krugman
> says. They are sitting on the cash, true, but it is still available
> for loan eventually. Then the floodgates open.

Paul Krugman, Please Call Ben on This 'Printing Money' Thing

A paper money backed by nothing and redeemable for nothing is for government power and economic planning, and nothing further. It also makes good for corrupt bankers. I know we all remember when you used to play monopoly and there was a designated banker. That banker always slipped a few extra dollars his own way while no one was looking. Well, with a monopoly money system (fiat) you get the same thing. The bankers can help themselves and those closest to them, while the added money and devaluation of currency is no different than taking money out of every citizens bank account.

The Systemic Failure of Academic Economics

Austrian economists have correctly explained the economic cycle and predicted the issues we now face. Ludwig von Mises, one of the great Austrian Economists, predicted the great depression in the 1920's. Only people with blinders who choose to believe that debt equals capital don't see the busts coming after the artificial booms are created. The federal reserve and manufactured interest rates will lead us to this same outcome time and time again until the currency is destroyed. Grow up, suck it up, let banks fail, abolish the fed, and stop pretending propping up prices will solve the problem to affordable housing, as if that even makes sense (lets make house more affordable by keeping the price higher, huh?).

Who Benefits from Seigniorage?

But where is the 6% generated? 6% on the amount of money they have, even just 3% is a large amount.


On Dec 28 06:06 PM William Hummel wrote:

> Banks are required to provide notes on demand to depositors. The
> banks acquire notes from the Fed in exchange for debits to their
> Fed deposits. The Fed, the banks, and the depositors all break even,
> simply swapping one form of money for another.
>
> Member banks must subscribe to stock in their regional Federal Reserve
> Bank in an amount equal to 3 percent of their capital and surplus.
> They receive a 6 percent annual dividend on their stock. However
> the stock does not carry with it the control and financial interest
> that is normal for the common stock of a for-profit organization.
> It offers no opportunity for capital gain and may not be sold or
> pledged as collateral for loans. The stock is merely a legal obligation
> that goes along with membership. For more detail visit wfhummel.net/fedovervi....
>
>
>
>

Who Benefits from Seigniorage?

Who benefits when the FED provides notes on demand to the banks (at no interest, actually paying interest to the banks currently from my understanding) who in turn DO NOT provide notes on demand to individuals/depositors... Is this a breakdown in how the FED was meant to work? Also, where does the money for the 6% dividend paid to FED Reserve Shareholders (Banks) get generated from, and how does it affect the balance sheet?

Three Signal Facts on the Fed's New Balance Sheet

Beyond the interest paid on reserves, the FED pays 6% to its shareholders (the banks).