(Update below) 

Ever heard this one: "They can't stoop any lower"? Did you believe it? If you answered, "Bullshit. There's always a level they can sink to that's lower than the one they're on if there's a profit to be made", give yourself an A.

Wall Street's newest Big Idea, the one they've been looking for to replace the last Big Idea - you know, subprime "bubble" mortgages, the one that worked out so great for banking executives even if the rest of the economy imploded because of it - is to buy up your life insurance policy for a lump sum and bet you die earlier than you were supposed to.

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.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

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

The chutzpah is staggering. The insensitivity and carrion-feeding is par for the course.

“We’re hoping to get a herd stampeding after the first offering,” said one investment banker not authorized to speak to the news media.

In the aftermath of the financial meltdown, exotic investments dreamed up by Wall Street got much of the blame. It was not just subprime mortgage securities but an array of products — credit-default swaps, structured investment vehicles, collateralized debt obligations — that proved far riskier than anticipated.

The debacle gave financial wizardry a bad name generally, but not on Wall Street. Even as Washington debates increased financial regulation, bankers are scurrying to concoct new products.

Having created a society where this sort of thing is becoming a daily occurence and poverty is growing by leaps and bounds, hold out the promise to people who are strapped (because of the bankers' previous unethical machinations) of a tidy sum in their hands at 40 cents on the $, and then pray for the suckers to die.

They must be awful sure there's no possibility of a single-payer system anytime in the near future because we'd live longer with regular health catre and that would kill this whole plan as dead as they want us to be.

Even vultures have more honor than that. But then, that's what capitalists do - prey on the weak - and they've made a lot of people too weak to withstand them.

Charity is one child in a national surge of homeless schoolchildren that is driven by relentless unemployment and foreclosures. The rise, to more than one million students without stable housing by last spring, has tested budget-battered school districts as they try to carry out their responsibilities — and the federal mandate — to salvage education for children whose lives are filled with insecurity and turmoil.

The instability can be ruinous to schooling, educators say, adding multiple moves and lost class time to the inherent distress of homelessness. And so in accord with federal law, the Buncombe County district, where Charity attends, provides special bus service to shelters, motels, doubled-up houses, trailer parks and RV campgrounds to help children stay in their familiar schools as the families move about.

Buy her life insurance policy and then make sure the healthcare system is so skewed to the rich that she dies of a treatable disease.

BushAmerica lives on.

UPDATE: (5.10pm) Digby on the same subject:

I don't know why anyone is worrying about risk. These entities are all "too big to fail" so the taxpayers will bear the risk, while the players will reap gargantuan, unrestricted bonuses as long as the party continues. And if their "too big to fail" corporation gets sued after the whole thing falls apart, the taxpayers will even pay their legal fees. It's an awesome scam.

If this is what constitutes free markets, no wonder all the rich people love them.

Just call Wall Street by its right name: Scams-R-Us.