Death Bonds-2

"In a little-known practice, investors can recruit a terminally ill person and together they can scoop up these bonds on the open market for a discount. when the ailing bondholder dies, the surviving co-owner can then redeem them at face value and potentially turn a quick profit. ... But the market's turmoil has made this arrangement more attractive for professional investors, since some bonds are traded at a steep discount. Legal and financial experts say there is nothing to prevent investors from buying the bonds with a dying relative or even a stranger who is terminally ill. ... One investor who scored big on the money-back guarantee is Joseph A. Caramadre, an estate-planning lawyer in Cranston, RI. From 2006 to 2009, Mr. Caramadre recruited several dozen terminally ill people to serve as joint brokerage-account holders. He then brouight survivor's-option bonds trading below face value for each account, according to Mr. Caramadre's lawyer and federal court records filed in Providence, RI, over how to pay out proceeds from the investments. ... While issuers didn't intend for them to be used to make a quick buck, [Edward Best] said, 'there are people out there who will figure out how to game almost anything in the world'," Mark Maremont and Aparajita Saha-Bubna at the WSJ, 10 March 2010, link:

http://online.wsj.com/article/SB10001424052748704784904575112081251438468.html.

What's the problem here? Should only banksters be permitted to game the system? There would be no problem if the Vampire Squid were syndicating these bonds and reaping a nice fee for doing so.