In what universe is a bond selling at 1.55 "100% insured"
Yeah, well, some people prefer semantics over math. An investor in this bond will lose 35% of their initial investment in the event of a pirate default. I say that makes it 65% insured, but the "face value" is initially insured. Yuck. The term "face value" makes me sick.
No offense, but this is how things are done in the real world. The difference is, that in the real world the insurance company leaves "face value" out of the contract.
That's right, for every $100 you pay for car insurance, only $70-80 of it will ever actually see a repair shop. The rest is
eaten by the insurance company. I know you might not like it, but that's the reality of it.
Yes, plenty of people think this way. But in the real world, of those extra $20-30, some go to profit and some go to the unlikely, high-damage cases. I pay my insurance $100, and some of that goes to help out the poor guy who got his car totaled. However, if it's not my fault in an accident, I can get the whole car back. If you want to make the analogy, this bond has a 35% deductible. That's ridiculous. Not to reveal personal information, but I don't have a deductible. Just weekly payments. GIPPT works that way; no deductible, just a reduced rate.
Now, find me a few real-world companies who claim "100% insured" and see what their terms say.
Seems like we would be paying an "excess" up front rather than after the accident happens
