After the implosion and dismantling of the entire residential mortgage-backed machinery on Wall Street, we've often wondered: What's next? The New York Times suggests it might be securitized life settlements. The idea of buying up life settlements as an investment is not new, but now firms like Credit Suisse and perhaps others are aiming to buy up these contracts en masse and securitize them, to sell to investors.

Elderly people get to cash out of these life insurance contracts. Investors keep paying premiums, and pocket the payout when the insured dies. One downside is that insurance companies will likely be on the hook for more payouts, given than investors will keep alive some policies that otherwise would have lapsed. That might pressure them to raise premiums.

We'll see how emotionally the world reacts to this. The article can be seen a trial balloon of sorts. Big banks are wondering if it will fly in this environment. 

For more:
- here's the article