Wall Street Hits Bottom, Keeps Digging

We've seen some very bad insurance ideas before, but this one is the Mother of All Stupidity:

"Wall Street is developing a product that packages life-insurance policies into investable bonds, and the plan already is generating controversy"

"Already generating controversy."

No dunh!

Here's the thinking: let's take a concept that's already been outlawed (STOLI), couple it with a questionable insurance practice (viaticals), package it as an "investment," and then sell the product to investors.

What could possibly go wrong?

And why, one may reasonably ask, is this even being considered?

Simple:

"Wall Street has been searching for a product to replace the once-lucrative mortgage business."

Yeah, 'cause that worked out so well for the economy (not to mention banks, mortgagees and the tax-payer). With FHA loan defaults hitting 14%, we should definitely be looking to prostitute life insurance policies to shore up Wall Street's precarious position. Frankly, I presumed this whole idea was a very clever ruse by The Onion to tweak two industries at once.

I wish.

[Hat Tip: Lucianne.com]