The Ultimate Systematic Risk
April 8th, 2009
I said this months ago (U.S. to Offer Aid to Life Issurers), the government has to bailout these insurers because they are ones that own the most financial services paper. This is no different than what happened in 1929-30, everyone owned each others paper. Once the average policy holder realizes this, they may seek to redeem the cash value of the policy. This ten causes a solvency problem for the insurers.
As a bond trader this is positive, and an Austrian…
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