Big and Efficient or Big and Dumb?

I am helping the huge AXA Insurance Company save money and they don’t even know about it. I expect that hundreds and perhaps tens of thousands of other folks are secretly saving them money also. I’ve had the check since mid May so the AXA Accounting Department is probably upset that the company books won’t reconcile. You know how annoying it is when you’re trying to reconcile your checking account and some dodo hasn’t cashed the check you sent him four months ago.

Really, I’m not cashing the check they sent just to be annoying. The reason is, well, to be completely honest during this political season, the amount of the AXA check is just not a large enough payoff to cause me to cooperate. And to be completely truthful the check is made out to my wife. It has to do with the whole life insurance policy she took out in 1961 with the Equitable Mutual Insurance Company. Years ago the Wall Street barons figured out a way to de-mutualize mutual companies by a smoke and mirrors technique to privatize mutual companies. In the process they take control of their retained earnings of the company and give themselves big bonuses for being so clever in taking money from the mutual owners.

Nowadays, the Wall Street sharks don’t bother much with privatizing mutual companies because they have made a lot more money in the last ten years or so with a brand new lucrative gimmick – derivatives. There are several different types of derivatives which I would identify and explain if only I knew what they really are and how each of them works. Best I can tell derivatives are bets on the direction that something will move. One of the derivatives is called a credit default swap that savvy derivative pros refer to as CDSs.

The sharks were making piles of money recently betting that banking institutions would continue to get further and further into hot water because of the unwinding of the subprime mortgage mess. It seems to me that its sort of like betting that all the people in a boat made of ice will perish when the boat melts in the middle of the ocean. To make it more certain the sharks are the ones who sold the boat and the cruise tickets.

Back to my original point, the check that I haven’t cashed. The check amount is, as it is printed on the check, is $$$$$$$$$$.02

Yes, you read it right. The check is for two cents. AXA could be a government of its own as the reason for the check is stated as, ‘TAX REDUCTION FROM 15% TO 14.91689%” and yes it is printed in all capital letters. Why the rate change? I have no idea. It has something to do with Equitable converting from an American Mutual Company into a privatized French stockholder Company.

Anyway, that’s my two-cents worth and I’m sticking to it! AXA will have to sue me to get that check cashed.