Have you heard about the latest financial "Innovation"?
They are called, "Catastrophe Bonds," and the banksters are aggressively lobbying regulators to allow ordinary folk (by which I mean, "Rubes.") to get in on the casino:
Asset managers specialising in catastrophe bonds are fighting a threat to curb retail access to the fast‑growing market, as surging sales of the bonds give small investors a way to bet on the likelihood of big natural disasters.
Twelve Capital, Fermat Capital and Plenum Investments are among the investment managers that had urged Europe’s financial markets watchdog, the European Securities and Markets Authority, to support keeping “cat” bonds in funds available to the broader public.
Sounds to me like, "Asset managers specialising in catastrophe bonds," are looking for a new way to f%$# retail investors.
It's kind of their whole business model.
………
Insurers, governments and other issuers use catastrophe bonds to cut their exposure to the most extreme risks they face, such as a large hurricane or wildfire. As insurance companies’ liabilities have increased because of inflation and climate change, they have increasingly paid capital markets investors — along with traditional reinsurers such as Munich Re and Swiss Re — to shoulder some of the risk.
In exchange, bondholders have been rewarded in recent years with higher returns than other fixed-income investments such as government bonds. But they are on the hook for claims after a large disaster.
Cat bonds have made their way into the hands of ordinary investors through funds marketed under Europe’s UCITS [The Undertakings for Collective Investment in Transferable Securities Directive] label. As of June, UCITS cat bond funds managed about $17bn in assets. That value has more than tripled since June 2020, when the funds held about $5bn, Plenum data shows.
> In a June report, Esma advised the commission to exclude cat bonds — as well as other alternative investments such as cryptocurrencies and real estate investment trusts, or REITs — from UCITS-labelled funds, with an allowance for indirect exposure to the excluded assets, up to a 10 per cent cap.
Esma raised concerns that demand for cat bonds could dry up after a big catastrophe or during a period of heightened risk, such as hurricane season. The regulator also said cat bonds were “structured in a way which is closer to insurance products than a traditional transferable security.”
This sounds a lot to me like money market funds before 2008, when they, "Broke the buck," (?They got government bailouts)
A money market fund is different from a money market account, with the former being a mutual fund which promises the ability to get out what you put in, while the latter is a federally insured tyupe of bank account.
"Financializing extremely risky operations makes them better and safer," said no one EVER!"
Keep this away from ordinary people.
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