Leave it to good ole American ingenuity and the unrelenting greed of Wall St scammers to come up with a new scheme to pick Pension Funds clean to the bone - Life Insurance-Backed Securities! I guess Wall St wasn't satisfied with it's ill-gotten gains having sold reams of MBS's and nearly taking down the entire financial system in the process.

At the end of the day you can and will (whether you like it or not) bet your pension these bundled life insurance contracts are as fraudulent as the derivative MBSs and all the crap that Wall St peddles to the world. China won't buy any more of this worthless garbage so guess who'll be stuck with the bill when this latest piece of financial genius implodes down the road? Again the regulators are turning a blind eye to blatant fraud and could care less about the long-term implications of issuing these new derivatives. You know it and so do I. Wall St will keep issuing this garbage until their credibility is completely and utterly destroyed and/or the banks are forced to shut their doors.

Someone on another forum summed this latest scheme:

But what happens to the bagholders pension funds after the insurers become insolvent and can't payout on the policies?

http://www.nytimes.com/2009/09/06/business/06insurance.html?_r=2&hp=&pagewanted=all

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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..............

........Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them