Things gradually may be getting back to normal in the global stock markets, at least compared to events last year, when Lehman Brothers tanked and AIG and others were in crisis mode after their subprime mortgage investments collapsed.

But based on recent news, it hasn’t taken long for Wall Street’s collective memory bank to crash. Case in point: A September New York Times report on how the same Wall Street geniuses responsible for the subprime meltdown are now planning to bundle life insurance policies the way they packaged bad mortgages.

It works like this: Bankers buy up the life settlement insurance policies that the sick and old sell for cash before the policy matures (popularized in the 1980s as “viaticals”), then “securitize” them by packaging hundreds or thousands together into bonds. Then they sell these bonds to investors, who are paid when people with the insurance die.

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