Wall Street is back at it again and the same formula is being used, even as they search for new ones. Those exotic investment schemes that were dreamed up on the Street: the MBS subprime and Alt A mess, the Credit Default Swaps and Collateralized Debt Obligations, the countless options, futures and so many more junk derivatives that turned into so much toxic waste for the banks that they had to be bailed out is now back in full-force, as the big players return to the scene of the crime and offer more of this same stuff, like a derivative product they are calling “residential reremics” a product that Morgan Stanley has already sold $30 billion dollars worth of, so far in 2009. A reremic is simply and plainly a re-securitization of their money-losing securities repackaged and given a higher rating (easier to attract investors that way). They call it a re-securitization of real estate investment conduits, in other words they’re selling their toxic junk MBS subprime and Alt A garbage, slapping a higher rating on it and then peddling it on the Street; and it’s obviously working as $30 billion in sales would attest to.

And now, they are even considering securitizing death. Yup, you heard it here first, sports fans; Wall Street is going to securitize up bundles of life insurance policies, in the hundreds or thousands, that the owners sell for cash, usually by the ill and elderly, exactly as they did with the Mortgage Backed Securities and all the derivatives junk that turned toxic, and will sell them as bonds on the Street. The investors who buy them will get their payoffs when (drum-roll here) you guessed it, the holders of the insurance policy dies; hence my macabre statement that they are securitizing death and they are gambling on it to sell big. They call these bonds “life settlements” and they claim that it will actually help people who want to cash out their life insurance policies while they are still alive. Hmmm. Isn’t a life insurance policy bought so that when you die your family or beneficiaries collect on the policy? I thought so but maybe I was wrong, because maybe it’s an investment policy now.

Geez, I’ve heard of husbands and wives committing murder to collect on a life insurance policy and I’ve heard of people going AWOL and pretending to be dead in collusion with a beneficiary to collect but what’s going to happen when the guy holding the million dollar policy that he bought for 300K wants to collect his difference but the holder of the policy lives on … and on … and on … man, only on Wall Street could they dream something like this up … oh well … just sayin’ …