Could the Next Big Investment Craze Be Hedging Marriages?

[BlueStateSaint]

AYFKM?  Then again, half of all marriages in the US end in divorce, so . . . from a business standpoint, it might work.

Could the Next Big Investment Craze Be Hedging Marriages?



By Bruce Watson

Posted 5:20AM 04/17/12 Posted under: Insurance, Lifestyle

It's a tough time to be an investor -- the stock market is moving in fits and starts, gold is sliding back down from its once-dizzying heights, and ridiculously low federal lending rates mean that banks aren't really all that interested in borrowing your money. But if you're looking for a promising gamble that could pay off big, there's a new investment opportunity on the horizon: hedging marriages.
 
Betting on marriages may now be possible, thanks to Wedding Gift Refund, a new service for wedding guests. Recognizing that many couples move quickly from the the altar to the divorce court, the company gives guests a chance to ensure that the money spent on today's gift won't transfer into disappointment after tomorrow's divorce. After buying a gift, guests simply register on the company's website, pay 8% of the gift's purchase price, and upload a copy of the receipt. If the marriage dissolves within three years, Wedding Gift Refund will reimburse the full price of the present.
 
On the surface, this doesn't seem like a great investment opportunity: After all, even if a couple gets divorced, the 8% cost of a gift insurance policy means that -- at best -- you would only receive 92% of your initial investment. But what if you could insure presents that you didn't buy?
 
This idea isn't as farfetched as it sounds -- in fact, it has a firm backing in recent history. Credit default swaps, the financial instruments that threatened to destroy the global economy a few years ago, were little more than insurance policies taken out on risky loans. Originally, these were designed to ensure that lenders would not lose their money when loans failed, but several investors, including Jeff Greene and Michael Burry, discovered that it was possible to take out insurance policies on loans that they didn't actually hold. Thus, when the loans failed, they didn't lose any money on the actual loan, but profited mightily from the insurance policies.
 
The trick, then, lies in taking out insurance policies on gifts that one doesn't actually buy. On the Wedding Gift Refund site, this wouldn't be too hard: The website allows customers to insure multiple gifts, as long as they can produce receipts. In fact, their only restriction seems to be that presents have to cost between $50 and $500.

The rest of this article is at:  http://www.dailyfinance.com/2012/04/17/betting-against-marriage-wedding-present-hedge-divorce/

Not really sure what to say, other than . . . So this is what we're coming to.

[JohnnyReb]

Sounds like a better deal than buying Carbon Credits.

[CG6468]

Only 50% end in divorce? I thought it was higher than that. There is no knowledge of the meaning of the word "commitment" any more.

[thundley4]

Only 50% end in divorce? I thought it was higher than that. There is no knowledge of the meaning of the word "commitment" any more.

I'm wondering where they even come up with 50% .  Unless they go back to the beginning of the US, and include all marriages and divorces since then, their number is BS.  They look at it this way, I think.  There are 150,000 marriages in one year, and 75,000 divorces each year, so that gives them their 50%.  Who knows, it may be higher or it may be lower.

[DefiantSix]

Only 50% end in divorce? I thought it was higher than that. There is no knowledge of the meaning of the word "commitment" any more.

The 50% figure, while technically accurate, is misleading.  I saw a study some time ago which confirmed that it was true that 50% of marriages end in divorce, but it also clarified that that 50% of marriages were being engaged in and broken up by the same 15% - 20% of the population.  In other words, it isn't half the population which has no concept of the terms love, honor, cherish & etc; it's the same few dim bulbs who get it wrong time after time after time.

[obumazombie]

Only 50% end in divorce? I thought it was higher than that. There is no knowledge of the meaning of the word "commitment" any more.

I might agree with you if I was more committed to your cause.

[Ralph Wiggum]

The entire premise is flawed.  And I say this as one who is divorced.

Sounds to me like another capitalist trying to make money.

[rich_t]

Sounds to me like another capitalist trying to make money.

Is that a bad thing?